- BSBSMB402A - Plan small business finances
Assessor Resource
BSBSMB402A
Plan small business finances
Assessment tool
Version 1.0
Issue Date: April 2024
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.
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.
You may want to include more information here about the target group and the purpose of the assessments (eg formative, summative, recognition)
Employability Skills
This unit contains employability skills.
Evidence Required
List the assessment methods to be used and the context and resources required for assessment. Copy and paste the relevant sections from the evidence guide below and then re-write these in plain English.
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. | |
Overview of assessment | |
Critical aspects for assessment and evidence required to demonstrate competency in this unit | Evidence of the following is essential: development of a financial plan which identifies the financial requirements of the business, including profit targets, cash flow projections and strategies for the acquisition of finance knowledge of financial decision making relevant to the business. |
Context of and specific resources for assessment | Assessment must ensure: access to relevant documentation candidate's individual circumstances and work in the context of establishing or running a small business, are the basis for assessment. |
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: portfolio of evidence including financial plan and records review of projected profit statement prepared to supplement the business plan review of cash flow projections oral or written questioning to asses knowledge of principles for preparation of cash flow forecasts. |
Guidance information for assessment | Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended, for example: BSBSMB401A Establish legal and risk management requirements of small business BSBSMB404A Undertake small business planning BSBSMB405A Monitor and manage small business operations BSBSMB406A Manage small business finances. |
Submission Requirements
List each assessment task's title, type (eg project, observation/demonstration, essay, assingnment, checklist) and due date here
Assessment task 1: [title] Due date:
(add new lines for each of the assessment tasks)
Assessment Tasks
Copy and paste from the following data to produce each assessment task. Write these in plain English and spell out how, when and where the task is to be carried out, under what conditions, and what resources are needed. Include guidelines about how well the candidate has to perform a task for it to be judged satisfactory.
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Required skills |
analytical skills to interpret financial data communication skills to secure finance literacy skills to develop a financial plan and to interpret legal requirements and financial reports numeracy skills to calculate costs, prices, profit and other financial information research skills to identify costs and sources of finance. |
Required knowledge |
break-even analysis costing for the business, including margin/mark-up, hourly charge out rates and unit costs financial decision making relevant to the business methods and relative costs of obtaining finance principles for preparation of balance sheets principles for preparation of cash flow forecasts principles for preparation of profit and loss statements purpose of financial reports relevant accounting terminology working capital cycles. |
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. | |
Costs may include: | direct/indirect costs fixed, variable, semi-variable costs overheads and employee costs |
Pricing strategies may include: | competitor analysis cost/volume/profit analysis cost factors cost plus pricing demand-based pricing discounting market conditions penetration pricing perceived value product mix skimming |
Financial plan may include: | analysis of sales by product/service, identifying where they were sold and to whom cash flow estimates for each forward period current financial state of the enterprise (or owner/operator) estimates of profit and loss projections for each forward period financial performance to date (if applicable) likely return on investment monthly, quarterly or annual returns non-recurrent assets calculations profit, turnover, capital and equity targets projected profit targets, pricing strategies, margins projections of likely financial results (budgeting) projections, which may vary depending on the importance of such information and the stage in the life of the business resources required to implement the proposed marketing and production strategies (staff, materials, plant and equipment) review of financial inputs required (sources and forms of finance) risks and measures to manage or minimise risks working, fixed, debt and equity capital working in conjunction with external consultants e.g. investment analysts, accountants, financiers |
Profit targets/goals may include: | break-even point cost of goods/services sold gross profit/net profit desired actual/notional salary for owners/managers desired return on investment sales turnover/gross fees or income |
Cash flow projections may include: | anticipated payments anticipated receipts customer credit policy/debt recovery taxation provisions |
Legal requirements may include: | contractual arrangements (partnership agreements, trust deeds) corporations law industrial law (for payroll records) taxation law |
Sources of finance may include: | personal, financial institutions, trade/industry sources government sources, for example commonwealth and state/territory governments which provide various forms of technical and financial assistance including direct cash grants, loans, subsidies, tax concessions, and professional and technical advice |
Financial backers may include: | financiers/banks/lending institutions leasing and hire purchase financiers providers of venture capital shareholders/partners/owners/family/friends |
Copy and paste from the following performance criteria to create an observation checklist for each task. When you have finished writing your assessment tool every one of these must have been addressed, preferably several times in a variety of contexts. To ensure this occurs download the assessment matrix for the unit; enter each assessment task as a column header and place check marks against each performance criteria that task addresses.
Observation Checklist
| Tasks to be observed according to workplace/college/TAFE policy and procedures, relevant legislation and Codes of Practice | Yes | No | Comments/feedback |
|---|---|---|---|
| Identify and document costs associated with the production and delivery of the business' products/services | |||
| Calculate prices based on costs and profit margin, as an hourly charge out rate for labour or unit price for products | |||
| Calculate break-even sales point to establish business viability and profit margins | |||
| Identify appropriate pricing strategies in relation to market conditions to meet business profit targets | |||
| Prepare projected profit statement to supplement the business plan | |||
| Set profit targets/goals to reflect owner's desired returns | |||
| Identify working capital requirements necessary to attain profit projections | |||
| Identify non-current asset requirements and consider alternative asset management strategies | |||
| Prepare cash flow projections to enable business operation in accordance with business plan and legal requirements | |||
| Identify capital investment requirements accurately for each operational period | |||
| Select budget targets to enable ongoing monitoring of financial performance | |||
| Identify start-up and ongoing financial requirements according to financial plan/budget | |||
| Identify sources of finance, including potential financial backers, to provide required liquidity for the business to complement business goals and objectives | |||
| Investigate cost of securing finance on optimal terms | |||
| Identify strategies to obtain finance as required to ensure financial viability of the business |
Forms
Assessment Cover Sheet
BSBSMB402A - Plan small business finances
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Assessment Record Sheet
BSBSMB402A - Plan small business finances
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Assessment task 1: [title] Result: Competent Not yet competent
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Feedback to student:
Overall assessment result: Competent Not yet competent
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