Application
This unit describes the skills and knowledge required to estimate start-up costs, financial viability and projected cash flow and budget for a new business venture. It involves assessing the need to access required finances based on calculations and estimates undertaken.
The unit applies to those establishing a business providing self-employment, as well as those establishing a new venture as part of a larger organisation.
No licensing, legislative or certification requirements apply to this unit at the time of publication.
Elements and Performance Criteria
1. Prepare to organise finances for new business venture | 1.1 Establish current financial situation, showing funds available and commitments already incurred 1.2 Identify equity finance and assets from available sources 1.3 Identify business mix and forecast expected business activity over a year |
2. Determine required finances for new business venture | 2.1 Estimate start-up costs for business venture according to established business activities 2.2 Estimate income and expenses for first year of operation 2.3 Project cash flow for first year of operation 2.4 Seek specialist financial advice as required according to workplace procedures 2.5 Record cash flow and budget and required finances |
3. Plan to access finances for new business venture | 3.1 Investigate and source suitable types of finances 3.2 Establish methods of accessing finances and servicing any repayment schedule 3.3 Complete required documentation |
Evidence of Performance
The candidate must demonstrate the ability to complete the tasks outlined in the elements, performance criteria and foundation skills of this unit, including evidence of the ability to:
organise finances for at least one new business venture.
In the course of the above, the candidate must:
investigate financial position, commitments and needs
determine projected cash flow and budget for business venture
estimate finances needed to establish and operate the business venture.
Evidence of Knowledge
The candidate must be able to demonstrate knowledge to complete the tasks outlined in the elements, performance criteria and foundation skills of this unit, including knowledge of:
sources of specialist financial advice relating to new business ventures, including Australian Taxation office (ATO)
accounting software for use in the business venture described in performance evidence
key financial terminology relevant to new business ventures
relationship between finances and sales and marketing strategies
workplace procedures for:
costing or pricing and preparing financial forecasts
estimating start-up costs, including cost of expenses and assets
seeking specialist financial advice
income and costs to be considered when estimating operating budget, including:
monthly variable and fixed costs required for business activity
drawings needed for business venture to be financially viable
monthly income generated by business venture based on price per unit item or hourly charge rate for labour
goods and services tax
operating finance required for business.
Assessment Conditions
Skills in this unit must be demonstrated in a workplace or simulated environment where the conditions are typical of those in a working environment in this industry.
This includes access to:
business technology, including internet access
finance documentation and resources relating to business described in performance evidence
sources of specialist advice.
Assessors of this unit must satisfy the requirements for assessors in applicable vocational education and training legislation, frameworks and/or standards.
Foundation Skills
Reading | Gathers, interprets and analyses a variety of textual information from a range of sources and identifies relevant and key information |
Writing | Uses information and industry-related terminology to complete required workplace documentation |
Oral Communication | Uses listening and questioning techniques to seek information and confirm understanding |
Numeracy | Analyses numerical information to complete required calculations and estimates |
Initiative and enterprise | Seeks input and expert advice when decisions involve unfamiliar issues Determines priorities and sequences steps involved in clearly defined familiar tasks, and identifies and assembles resources required |
Technology | Uses main features and functions of digital tools to complete work tasks and access information |
Sectors
Business Competence – Entrepreneurship and Small Business