Modification History
Not applicable.
Unit Descriptor
Unit descriptor |
This unit describes the performance outcomes, skills and knowledge required to develop a financial plan to support business viability. Specific legal requirements apply to the management of a small business. |
Application of the Unit
Application of the unit |
This work is undertaken by individuals who operate a small business. The unit is suitable for existing micro and small businesses or a department in a larger organisation. |
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. Identify costs, calculate prices and prepare profit statement |
1.1. Identify and document costs associated with the production and delivery of the business' products/services 1.2. Calculate prices based on costs and profit margin, as an hourly charge out rate for labour or unit price for products 1.3. Calculate break-even sales point to establish business viability and profit margins 1.4. Identify appropriate pricing strategies in relation to market conditions to meet business profit targets 1.5. Prepare projected profit statement to supplement the business plan |
2. Develop a FINANCIAL PLAN |
2.1. Set profit targets /goals to reflect owner's desired returns 2.2. Identify working capital requirements necessary to attain profit projections 2.3. Identify non-current asset requirements and consider alternative asset management strategies 2.4. Prepare cash flow projections to enable business operation in accordance with business plan and legal requirements 2.5. Identify capital investment requirements accurately for each operational period 2.6. Select budget targets to enable ongoing monitoring of financial performance |
3. Acquire finance |
3.1. Identify start-up and ongoing financial requirements according to financial plan/budget 3.2. Identify sources of finance , including potential financial backers , to provide required liquidity for the business to complement business goals and objectives 3.3. Investigate cost of securing finance on optimal terms 3.4. Identify strategies to obtain finance as required to ensure financial viability 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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Costs may include: |
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Pricing strategies may include: |
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Financial plan may include: |
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Profit targets /goals may include: |
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Cash flow projections may include: |
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Legal requirements may include: |
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Sources of finance may include: |
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Financial backers 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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