University : Orange International College UniLearnO is not sponsored or endorsed by this college or university.
Subject Code : BSBSMB406
Country : Australia
Assignment Task

Instructions 
• Any templates needed to complete these Assessment tasks, are attached to the Assessment Workbook and must be completed in conjunction with the Assessment task. 
• You are able to provide supplementary evidence of the tasks performed on previous occasions, if determined suitable by your Trainer and Assessor. Please ensure that you discuss this with your Trainer if you are unsure. 
• If the conditions of these Assessment tasks cannot be replicated in a real-life work task on the day of assessment, your Trainer may conduct all or part thereof in a simulated work practical task, in line with the assessment process for this task. 
Assessment Workbook BSBSMB406 Manage small business finances V1 Business Services Training Package 
Assessment Overview In order to be assessed as Competent in the unit that makes up this Workbook you need to provide evidence which demonstrates you can perform the required competencies to the required standard. Competency depends on consistently demonstrating the skills and knowledge to enable you to complete workplace tasks confidently in a variety of situations. 
The content of this final assessment is designed to consolidate your learning to provide evidence that you are indeed competent. More specifically, summative assessments are designed to evaluate Learner learning at the end of an instructional unit and compared to a benchmark. The Assessor will base the final outcome of each unit and deem the assessment competent for every satisfactory task. 
You must complete this assessment individually. If any answers are incorrect, your Trainer/Assessor will work with you to identify gaps in your knowledge and understanding. You will be instructed to revise learning activities for specific sections, before arrangements can be made for a reattempt at assessment. 
Assessment Workbook BSBSMB406 Manage small business finances V1 Business Services Training Package  
Assessment Task 1 – Written/Verbal Questions Instructions 
• You are required to provide detailed answers, to the questions in the space provided. One-word responses will not be accepted as a suffice answer. 
• Written questions may be a combination of multiple choice, short answer or true or false questions. 
• The Trainer and Assessor will conduct reasonable adjustment should this be identified, and documented. 
• Your answers to these questions are used to determine an assessment judgement, part thereof the overall assessment judgment includes this task. 
• All questions if necessary will require a verbal interview from the Trainer to verify the responses. 
• If any supplementary documents are required to be submitted they must be marked with the Learner Name, date completed, and submitted alongside this Assessment Task. 
Refer to the Learner Activity Workbook to help you answer the questions in this task. 
In this task, there are a total of 28 questions. You must satisfactorily complete all 28 questions. 
The questions within this section address the following unit: BSBSMB406 Manage small business finances 
Assessment Workbook BSBSMB406 Manage small business finances V1 Business Services Training Package 
1.1 What is the purpose of identifying financial information requirements to operate and extend the business according to the business plan? 
Verbally interviewed 
The purpose of identifying financial information requirements is to profitably operate the business in accordance with the business plan. 
Identifying financial information will give a clear and accurate visual of how the business is currently performing, so to have a means of monitoring its progress and identifying opportunities for growth. 
The accuracy of decisions in the business environment is dependent on the availability of accurate data on a timely basis. The financial information is found in financial statements prepared by businesses for different classes of stakeholders. These statements include the statement of financial position also referred to as the balance sheet, comprehensive income statement also referred to as the profit and loss account, and cash flow statement. 
Part 1: Business Plan 
Executive Summary Introduction The Simulation is a small construction company that has successfully operated in Victoria for the past ten years working on both small and large-scale construction, repair, and alteration projects focusing on residential contracting. With the business boom that is occurring in our local area and the desire to improve overall profit margins, the company is planning to shift its target market from residential clients to the larger commercial customers. This business plan will lay out our goals and tasks to make this transition successful and create enough market share to succeed in this highly competitive market. 
The Company The Simulation began in 1985 when Mr. Robert Fosse decided to start his own business. In 1993 the company was merged with another small-scale local company; West General Contractors and the company began to bid successfully for larger scale projects. 
As part of its growth and altered focus, The Simulation is planning on changing its charter from a limited liability company to a publicly listed company. This will allow greater access to investment funds to fuel its growth. 
Services The Simulation offers comprehensive services designed allow the company to do whatever it takes to finish a project. Some of these services include; design work, remodelling and alterations, permitting, site preparation, carpentry, cement foundations, painting, and plumbing and utilities installation. In addition, skills The Simulation lacks can be subcontracted. 
The Market The market is booming at this moment, overall business growth during the past seven years has averaged approximately 9.5% and is expected to continue for at least the next four years. This makes for a very attractive market for The Simulation. 
We will be concentrating on the customers that will provide us with the greatest margin, in other words those clients desiring office building construction. This is the fastest growing segment of commercial clients requiring our services. The other categories that we will serve include the restaurant segment, the special facilities segment, and all other potential commercial clients. 
Financial Considerations The Simulation has only a small amount of debt and intends to stay that way. We expect to see increased profits from our market shift efforts by the end of Year 2. Over the next three years we expect lower profits as we make inroads into this tough market. We estimate that we will be able to reduce marginal costs and increase overall profitability by Year 3 or Year 4 as we grow and take advantages of economies of scale. 

2. Company Summary The Simulation began in 1985 when Mr. Robert Fosse decided to start his own business. In 1993 the company was merged with another small scale local company; West General Contractors and the company began to bid successfully for larger scale projects. 
In 20XX the company's management came to the conclusion that the firm had grown sufficiently to alter its primary target market segment from the residential construction segment to the higher margin office and commercial construction segment. The company plans to implement this change by the middle of Year 1. 
As part of its growth and altered focus, The Simulation is planning on changing its charter from a limited liability company to a publicly listed company, allowing greater access to investment funds to fuel its growth. 
2.1 Company History The Simulation began in Victoria in 1985 when Mr. Robert Fosse, who had worked in the residential construction business for ten years thought about starting his own business. For the next eight years the company grew slowly, working mostly on small scale residential projects while gaining a reputation for quality services and reliability. In 1993 the company was merged with another small- scale local company, West General Contractors and the company began to bid successfully for larger projects. The company maintains a General Contractor's license in Victoria. 
In 20XX the company's management came to the conclusion that the firm had grown sufficiently to alter its primary target market from the residential construction segment to the higher margin office and commercial construction segment. The company plans to implement this change by the middle of Year
4.2 Target Market Segment Strategy Since office building construction has the highest average profit margin, we will focus most of our marketing and servicing toward these customers. Usually these clients require the largest projects in scope, land use, and cost. In addition, they tend to be the most sensitive to completion times. Therefore, we plan to accommodate these clients through a well-established and expeditious permitting program, strict cost accounting and supply management, and intensive and comprehensive project management capitalizing on The Simulation experience in the field. 
4.3 Service Business Analysis The market is booming at this moment, with overall business growth for the past seven years averaging approximately 9.5%. This growth level is expected to continue for at least the next four years. One of the prime reasons for this growth is the favourable policies introduced by the government to attract foreign investment. Melbourne is ideally situated to take advantage of these new conditions and is experiencing a boom to prove it. This makes for a very attractive market for The Simulation. 
The commercial construction industry is highly fragmented across the nation. More than 86% of all construction companies in Australia consist of small ‘mom and pop’ style companies employing less than ten individuals. Contrasted to this are the large companies that engage in ‘heavy’ construction such as roads, shopping malls, etc. who often have a nationwide scope and employ several thousands of workers. This creates a highly competitive market with low profit margins. Companies wanting to create a defensible position in this market need some form of competitive edge, such as brand name, low cost advantages, or size. 
Assessment Workbook BSBSMB406 Manage small business finances V1 Business Services Training Package 
Page 51 of 99 
4.3.1 Competition and Buying Patterns Currently we have three major competitors within Melbourne and surrounding suburbs. These are TNT General Contractors, Victoria Specialty Construction, and Polanski Construction. Each of these companies targets the same clients as The Simulation and each has a fine reputation for customer satisfaction. However, the market in Victoria is growing so fast that the demand is currently greater than supply. This is an excellent opportunity to gain market share and a defensible position in the industry. 
One of the greatest limiting factors in this industry is its strong seasonality. During the winter months, contracts and production drop off sharply, increasing the company's short-term risk of cash flow shortfall. 
Assessment Workbook BSBSMB406 Manage small business finances V1 Business Services Training Package 
Page 52 of 99 
5. Strategy and Implementation Summary The Simulation plans to market itself through a variety of methods. Our plan will use referral systems, radio and published ads, leveraging of our pre-existing contacts with the local real estate companies, and industry contacts. 
The Simulation has been able to gain a very advantageous supplier contract that will allow The Simulation to obtain its materials at a significant discount. This will allow the company to underbid its rivals and achieve a low-cost leadership role. 
5.1 Competitive Edge In the construction industry the primary ways to compete are through low cost or better project management. One of the most important processes for winning a contract is the bid process. The Simulation has a unique competitive edge over most of its competitors. Mr. David West, The Simulation's General Projects Manager, is the nephew of Charles Nunn, who owns one of the major construction material suppliers in the region. Through this relationship, The Simulation has been able to gain a very advantageous supplier contract allowing The Simulation to obtain its materials at a significant discount. With this edge the company can underbid its rivals and achieve a low-cost leadership role. 
5.2 Marketing Strategy The Simulation plans to market itself through a variety of methods. First, the company will use a referral system with local businesses. We will also air radio spots and publish ads in a variety of commercial construction trade magazines. In addition we will leverage our pre-existing contacts with the local real estate companies. Finally, as a member of the local construction association, we will be updated on new projects let out for bid. 
5.3 Sales Strategy The most critical part of sales is not the marketing, but the bidding process, in which companies offer their designs, services, material quality, project timeline estimates, and costs. The company that offers the best combination of these variables is the most likely to get the contract. Therefore, very detailed project planning, including supply agreements, labour needs, subcontractors, presentation, and other factors, is crucial for The Simulation in winning contracts. We will be designing a standardised method for doing this with all our contracts, with an emphasis on quality, timeliness, and low cost to outbid our competitors. 
Assessment Workbook BSBSMB406 Manage small business finances V1 Business Services Training Package 
Page 53 of 99 
5.4 Sales Forecast Sales forecasts are based on conservative estimates. We expect sales in Year 1 to be lower than previously planned as we adjust to a new client base. After that, we expect sales growth to be much higher as we gain market share. 

 

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