Application
This unit describes the skills and knowledge required to identify financial requirements of a business, including profit targets, cash flow projections and strategies to garner financial support.
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 plan finances | 1.1 Identify costs associated with production and delivery of business products and/or services 1.2 Set profit targets according to business venture requirements and workplace procedures 1.3 Calculate prices based on costs and profit targets, as a charge-out rate for labour or unit price for products and/or services 1.4 Calculate break 1.5 Evaluate and select pricing strategies in relation to market conditions to meet profit targets and according to workplace procedures 1.6 Prepare projected profit statement to supplement business plan |
2. Develop a financial plan | 2.1 Identify working capital requirements necessary to attain profit projections 2.2 Identify non 2.3 Prepare cash flow projections to enable business operation according to business plan and legal requirements 2.4 Identify capital investment requirements accurately for each operational period 2.5 Select budget targets to enable ongoing monitoring of financial performance |
3. Plan to acquire finance | 3.1 Identify start 3.2 Identify sources of finance for required liquidity according to business goals and objectives and workplace procedures 3.3 Research and assess cost of securing finance on optimal terms 3.4 Develop strategies to obtain finance as required to ensure financial viability of business venture |
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:
develop at least one financial plan that addresses financial requirements of a business or new business venture, including cash flow projections and a projected profit statement.
In the course of the above, the candidate must demonstrate that the plan:
reflects legal requirements applicable to business
includes strategies to monitor financial performance of business.
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:
legislative and regulatory requirements relating to business described in performance evidence
process for conducting break
workplace procedures for:
costing for the business, including margin or mark
setting profit targets
identifying sources and investigating costs of securing appropriate financial assistance
methods and relative costs of obtaining finance
principles and procedures for preparing:
balance sheets
cash flow forecasts
profit and loss statements
financial plans
purpose of financial reports
accounting terminology required when planning finances for new business ventures
methods for analysing working capital cycles.
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:
software for financial calculations
legislation and regulations relating to business described in performance evidence
workplace documentation and resources relevant to performance evidence.
Assessors of this unit must satisfy the requirements for assessors in applicable vocational education and training legislation, frameworks and/or standards.
Foundation Skills
Reading | Identifies, analyses and evaluates complex information from a range of sources |
Writing | Prepares written plans and workplace documentation that communicate information clearly and effectively |
Numeracy | Analyses numerical information to determine costs, prices, profit and losses, and other financial data |
Self-management | Identifies implications of legal and regulatory responsibilities for own work Takes a range of constraints into account and adjusts, if necessary |
Sectors
Business Competence – Entrepreneurship and Small Business