Modification History
Not applicable.
Unit Descriptor
Unit descriptor |
This unit describes the performance outcomes, skills and knowledge required to investigate the financial capacity to enter into a micro business, to determine the projected cash flow, to source finances and to monitor the profitability of the business. Specific legal requirements apply to the management of a micro business. |
Application of the Unit
Application of the unit |
This work will be undertaken by individuals who are establishing or operating a micro business providing for self employment. |
Licensing/Regulatory Information
Not applicable.
Pre-Requisites
Prerequisite units |
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Employability Skills Information
Employability skills |
This unit contains employability skills. |
Elements and Performance Criteria Pre-Content
Elements describe the essential outcomes of a unit of competency. |
Performance criteria describe the performance needed to demonstrate achievement of the element. Where bold italicised text is used, further information is detailed in the required skills and knowledge section and the range statement. Assessment of performance is to be consistent with the evidence guide. |
Elements and Performance Criteria
ELEMENT |
PERFORMANCE CRITERIA |
1. Ascertain own financial position and the ability to provide capital/equity for the business |
1.1. Realistically detail personal , family or community financial situation in terms of funds available and commitments already incurred 1.2. Determine equity finance and assets available for micro business from personal, family or community sources |
2. Determine projected cash flow for the business |
2.1. Determine the level of forecast business activity over a year and the business mix 2.2. Estimate establishment costs for the business and repayment schedule for borrowings 2.3. Calculate the monthly variable and fixed costs needed to conduct business activity over a year 2.4. Estimate personal drawings needed to be taken from the business 2.5. Estimate the monthly income generated by the business for a year based on price per unit item or hourly charge rate for labour 2.6. Develop a cash flow budget for the first year of business operation 2.7. Seek professional advice to estimate goods and services tax and operating finance required for the business |
3. Source the required funds to establish the business |
3.1. Estimate required funding to establish and run the business based on expected sales and activity levels, available finances and commitments 3.2. Investigate methods of accessing alternative sources of finance 3.3. Identify strategies for meeting financial obligations 3.4. Implement plans to access available funds as required |
4. Monitor profitability of the business |
4.1. Maintain and review monthly expenditure and income records 4.2. Compare equity at beginning and end of a year to estimate business performance 4.3. Assess the financial viability of the business after a year of operation 4.4. Seek professional advice on depreciation, insurance and tax implications of the business |
Required Skills and Knowledge
REQUIRED SKILLS AND KNOWLEDGE |
This section describes the skills and knowledge required for this unit. |
Required skills |
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Required knowledge |
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Evidence Guide
EVIDENCE GUIDE |
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The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package. |
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Overview of assessment |
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Critical aspects for assessment and evidence required to demonstrate competency in this unit |
Evidence of the following is essential:
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Context of and specific resources for assessment |
Assessment must ensure:
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Method of assessment |
A range of assessment methods should be used to assess practical skills and knowledge. The following examples are appropriate for this unit:
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Guidance information for assessment |
Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended, for example:
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Range Statement
RANGE STATEMENT |
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The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included. |
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Personal , family or community financial situation may include: |
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Establishment costs may include: |
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Professional advice may include: |
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Sources of finance may include: |
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Financial viability may include: |
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Unit Sector(s)
Unit sector |
Competency field
Competency field |
Management and Leadership - Small and Micro Business |
Co-requisite units
Co-requisite units |
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