Is your
business in disaray?
Yes!!!!!!!
Then you
need to plan. Remember "f you fail to plan then you
plan to fail"
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Watch Videos |
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Case Study Video |
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This chapter outlines building a basic operating plan to help
set up and begin running your business. It includes information
on staffing, systems and processes, equipment, facilities and
general risk management. |
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People |
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Systems and
Processes |
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Equipment |
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Facilities |
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People |
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There are many points that require consideration when employing
people to assist with the operation of your business. These
relate to the hiring of staff, your legal obligations to
employees, staff management and the termination of employment. |
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When hiring new
staff, you will need to consider: |
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- Hidden costs of employment
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- Employee roles and responsibilities
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- Employee skills, attributes and experience
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- Recruitment costs, time and resources
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You will also need
to make yourself aware of your legal obligations as an
employer including: |
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- Occupational Health and Safety regulations
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- Workers Compensation cover
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- Equal Employment Opportunity and anti-discrimination legislation
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- Wages and leave entitlements
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- Taxation obligations and records/reporting
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It is also important to be able to manage and retain your
employees. In order to effectively do this you should consider: |
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Employee
induction, training and development |
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Policies and procedures to reduce and deal with complaints, disputes and employee
relations |
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Reviews, feedback and incentives in regards to employee
performance |
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At some stage you may be faced with ending a staff member's
employment. Therefore it is important to have thought about the
following: |
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Policies and
procedures for ending employment through either resignation,
redundancy or dismissal |
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Employer obligations to employees who have resigned, been made
redundant or dismissed |
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Effectively managing the people within your business is
fundamental to its success. It is important to be able
to find, recruit, develop and retain good employees. By
doing so, you can ensure that your employees understand
the objectives of the business and work towards business
development and customer satisfaction. |
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Build your marketing plan |
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Operating Plan |
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Q1.How many employees will you have? Give answer |
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Q2.What are their job descriptions? Give answer |
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Q3.What are your projections in regards to
staff turnover? Give answer |
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Q4.What are your plans in regards to
training and development of your employees? Give answer |
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Q5.What are some of the potential risks that
may arise in relation to staff? Give answer |
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Q6.What measures will you implement to
reduce the impact of these risks? Give answer |
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Q7.Are you aware of your obligations to your
employees in terms of entitlements? Give answer |
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Systems and Processes |
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Planning and designing systems and processes for business
operations involves the arrangement of management and staff,
their roles and functions and business administration
requirements. It also takes into account business facilities and
equipment, inventory management as well as policies and
procedures for other business functions. |
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To plan business systems effectively you can utilise the
following planning process: |
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Analyse the Business Situation: this involves taking into
consideration the current business environment and the costs and
benefits of implementing a new system. |
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Establish the System Purpose and Goals: define the purpose of
the new system and what you expect to achieve from it. This
could be for example, to improve staff productivity when making
a sale. |
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Assign Responsibility and Milestones: assign responsibility for
implementing the strategy to individual employees, with a
timeline to achieve the identified goals. |
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Communicate the Strategy and Plan to Employees: ensure that
employees understand what is required of them and the direction
that they follow. |
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Acknowledge Achievement of Goals: when
goals and objectives are met, offer some form of reward
as an incentive to encourage and thank people for their
efforts. |
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Build your marketing plan |
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Operating Plan |
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Q1.What systems or processes will you
implement in relation to the management of your staff? Give answer |
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Q2.What system will you have in place to
recognise and reward employees for achieving business goals and
objectives? Give answer |
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Q3.What systems and procedures will you have
in place to ensure quality control? Give answer |
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Equipment |
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To ensure a smooth and effective business operations startup, it
is important to have the right equipment in place at the outset.
This includes not only production equipment but administration
and communication equipment. After determining the equipment you
require, you will also need to finance the costs. |
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The equipment you require for your business to become fully
operational is dependant on your particular situation. |
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Some small business owners will find that they require very
little in terms of equipment or use equipment that need only be
purchased once at the initial start up stage. Other
organisations will need more substantial equipment, such as in a
production company, with higher initial costs as well as ongoing
maintenance and upgrading expenses. |
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There are a number of methods that you can use to
finance the initial acquisition of equipment. Depending
on your circumstances, you may seek finance from friends
or relatives, your own personal savings or loans from
financial institutions. It may also be possible to
secure credit from your suppliers or lease equipment on
a periodic basis. |
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Build your marketing plan |
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Operating Plan |
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Q1.List and describe any vehicle, plant, and
equipment requirements of your business. Give answer |
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Watch Video |
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Listen to Audio |
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Choosing business premises requires
careful planning and consideration. An inappropriate or poor
location can be damaging to your business, particularly where
the business relies on ease of access or exposure to consumers. |
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In order to make an informed decision when selecting a facility
from which to conduct business, you should keep in mind the
needs of your employees, customers and general operations. |
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Facility Requirements |
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Does your business have any special needs such as low noise
levels, space for equipment, storage, parking, etc? |
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What type of space do you require in order to effectively
interact with your customers? |
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Is there any competition or other businesses in the area that
could cause problems or difficulties with your operations? |
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Are the premises large enough for what the business needs both
now and into the future? |
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Costs |
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- How much can the business afford to spend?
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- Will the location cost customers any money (parking, etc.)?
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- How will the cost of the facility impact business profitability
and product pricing?
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- Does the facility require any costly alterations?
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Convenience |
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- Can customers find, travel to and access the business easily?
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- Is their enough exposure to attract customers (traffic,
pedestrians, etc)?
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- Do your clients have any special needs (disabilities, etc)?
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- How secure and safe is the area?
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There are a number of different types of facilities available
for businesses to operate from, with each suiting different
circumstances. |
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A
commercial lease provides you with the right to occupy the
premises for a fee, however you will need to consider the terms
of the lease agreement before entering into it. |
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It may also be possible in some cases to work from home
which is convenient but can come with distractions. A
business may also choose to purchase a building outright
if the plan is to conduct operations from the location
for an extended period of time. |
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Build your marketing plan |
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Operating Plan |
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Q1.What type of facilities does your
business require? Give answer |
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Q2.Will you require any special alterations
to suit your business needs? Give answer |
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Managing Risks |
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Listen to Audio |
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Risk management involves identifying unfavourable events that
could negatively affect your business if they happen to occur
and developing strategies to overcome them. |
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Risk events that could potentially occur range from minor to
serious and likely to unlikely. This range includes: |
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- Key business staff leaving
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- Key suppliers relocating or closing down, or a change in their
credit policies
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- A breakdown in occupational health and safety
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There are four key strategies that you can implement to cope
with business risk: |
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- Risk Prevention: guards are put in place to stop or deter the
risk from ever happening. This may include putting guards on
production equipment to prevent common workplace accidents or
security locks and alarms on your business premises.
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- Risk Avoidance: this involves developing strategies or not
undertaking activities so that the business would not have to
face the risk. An example is not entering into a contract to
avoid facing a particular liability.
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- Risk Retention: this is when you accept that a risk event may
occur and taking no action to prevent, avoid or stop it from
happening. You plan to deal with the problem when it actually
occurs.
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- Risk Transfer: in some cases you can transfer the risk of an
event happening onto others, usually in the form of a contract.
Examples include taking out insurance and selling your
outstanding debtor accounts to a debt collection agency.
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Conducting a risk analysis can also be a good risk reduction
technique. This involves identifying a risk, determining its
probability of occurring and developing strategies to overcome
the risk, if any. There are a number of available worksheets and
explanations available online to assist you in performing a risk
analysis and development of a risk management plan. |
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For more information on risk management, visit: |
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Smallbiz.nsw.gov.au -
for an online booklet on risk management |
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Build your marketing plan |
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Operating Plan |
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Q1.What are some of the potential risk
factors that could adverse effects on the operation of your
business? Give answer |
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Q2.How will you prevent or minimise the
effects of these risks? Give answer |
