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Follow the links below to find material targeted to the unit's elements, performance criteria, required skills and knowledge

Elements and Performance Criteria

1. Ascertain own financial position and ability to provide capital/equity for the business
   • Realistically detail personal, family or community financial situation showing funds available and commitments already incurred
   • Determine equity finance and assets available for micro business from personal, family or community sources
2. Determine projected cash flow for the business
   • Determine level of forecast business activity over a year and the business mix
   • Estimate establishment costs for the business and repayment schedule for borrowings
   • Calculate monthly variable and fixed costs needed to conduct business activity over a year
   • Estimate personal drawings needed from the business
   • Estimate monthly income generated by the business for a year, based on price per unit item or hourly charge rate for labour
   • Develop a cash flow budget for the first year of business operation
   • Seek professional advice to estimate goods and services tax and operating finance required for the business
3. Source required funds to establish the business
   • Estimate required funding to establish and run the business based on expected sales and activity levels, available finances and commitments
   • Investigate methods of accessing alternative sources of finance
   • Identify strategies for meeting financial obligations
   • Implement plans to access available funds as required
4. Monitor business profitability
   • Maintain and review monthly expenditure and income records
   • Compare equity at beginning and end of a year to estimate business performance
   • Assess financial viability of the business after a year of operation
   • Seek professional advice on depreciation, insurance and tax implications of the business
5. Ascertain own financial position and ability to provide capital or equity for the business
   • Realistically detail personal, family or community financial situation showing funds available and commitments already incurred
   • Determine equity finance and assets available for micro business from personal, family or community sources

Performance Evidence

Evidence of the ability to:

conduct an investigation of own financial position, commitments and needs

determine projected cash flow for the business

estimate the funding needed to establish and operate the business

assess the financial viability of the business.

Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.

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Knowledge Evidence

To complete the unit requirements safely and effectively, the individual must:

identify sources of specialist financial advice for micro business operators

describe appropriate accounting software for use in the business

locate the Australia Taxation office (ATO) website and summarise data for operating a micro business

explain key financial terminology relevant to micro business

describe the relationship between finances and business sales and marketing strategies

describe methods of costing or pricing and preparation of financial forecasts

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