BSBESB401 Student Workbook PDF

Student Workbook BSBESB401 Research and develop business plan TAFE NSW would like to pay our respect and acknowledge Aboriginal and Torres Strait Islander Peoples as the Traditional Custodians of the Land, Rivers and Sea. We acknowledge and pay our respect to Elders, past, present and emerging of all Nations. Version: 20211111 For queries contact: Technology and Business Services SkillsPoint © TAFE NSW 2021 RTO Provider Number 90003 | CRICOS Provider Code: 00591E This resource can be found in the TAFE NSW Learning Bank. The content in this document is copyright © TAFE NSW 2021 and should not be reproduced without the permission of TAFE NSW. Information contained in this document is correct at time of printing: 25 July 2022. For current information please refer to our website or your teacher as appropriate. Document name: BSBESB401_TL_SW Page 2 of 115 © TAFE NSW 2021 Contents Getting started................................................................................................................. 6 What will I learn by completing this workbook?................................................................... 7 Icon Legend............................................................................................................................ 8 Topic 1: Prepare to develop a business plan....................................................................... 9 Overview.............................................................................................................................. 10 Understanding the purpose of business plans.................................................................... 11 The importance of business plans.................................................................................. 11 Identifying business goals and objectives....................................................................... 12 Documenting business goals and objectives.................................................................. 13 Business planning............................................................................................................ 15 The content of your business plan.................................................................................. 16 The main components of the business plan........................................................................ 21 Identifying essential components of the business plan................................................. 22 Reviewing essential elements of the business plan....................................................... 22 Research market needs and estimate market size.............................................................. 24 Customer base................................................................................................................ 25 Target market.................................................................................................................. 25 Activity 1: Preparing to develop a business plan............................................................ 28 Activity 2: Market size and potential.............................................................................. 29 Topic 2: Draft a business plan........................................................................................... 31 Overview.............................................................................................................................. 32 The process to develop your plan....................................................................................... 33 A formal business plan.................................................................................................... 34 Research the legal and compliance requirements for your business............................. 35 Where are you at the moment....................................................................................... 35 Where do you want to be?............................................................................................. 36 How are you going to get there?.................................................................................... 36 Additional resources....................................................................................................... 37 Identifying the business elements.................................................................................. 37 Legal and compliance requirements............................................................................... 38 Choosing your business structure................................................................................... 38 Additional resources....................................................................................................... 41 Business Regulations....................................................................................................... 42 Additional resources....................................................................................................... 44 Key compliance issues for business................................................................................ 46 Additional resources....................................................................................................... 48 Document name: BSBESB401_TL_SW Page 3 of 115 © TAFE NSW 2021 Work health and safety (WHS) compliance.................................................................... 48 Activity 3: Legal and compliance requirements.............................................................. 54 Assess product mix, volumes, and pricing opportunities.................................................... 56 Product Mix..................................................................................................................... 57 Product volumes............................................................................................................. 57 Product pricing opportunities......................................................................................... 57 Applied example assessing of product mix, volumes and pricing.................................. 58 Additional resources....................................................................................................... 60 Marketing strategies and methods...................................................................................... 61 Marketing activities......................................................................................................... 62 Additional resources....................................................................................................... 64 Activity 4: Draft a business plan...................................................................................... 66 How did you go?............................................................................................................. 68 Topic 3: Create a business plan......................................................................................... 69 Overview.............................................................................................................................. 70 Finances............................................................................................................................... 71 Require financing............................................................................................................ 72 Cost of finance................................................................................................................ 73 Start-up expenses........................................................................................................... 73 Working capital............................................................................................................... 73 Sources of finance........................................................................................................... 74 Activity 5: Sourcing finance for your business................................................................ 76 Liquidity........................................................................................................................... 77 Recovering costs............................................................................................................. 78 Analyse the draft plans................................................................................................... 80 Identify business risks..................................................................................................... 82 Essential services and how to use them effectively....................................................... 83 Production and operational planning............................................................................. 88 Activity 6: Production and operation planning............................................................... 90 How did you go?............................................................................................................. 91 Topic 4: Finalise business plan and plan for risk................................................................ 92 Overview.............................................................................................................................. 93 Identifying the interests and objectives of relevant people........................................... 94 Confirming the support of relevant people.................................................................... 95 Principles of risk management....................................................................................... 95 Managing risk.................................................................................................................. 96 Risk management strategies................................................................................................ 99 Insurance....................................................................................................................... 100 Diversification............................................................................................................... 100 Document name: BSBESB401_TL_SW Page 4 of 115 © TAFE NSW 2021 Activity 7: Risk strategy................................................................................................. 101 Succession planning...................................................................................................... 101 Business plan risk controls............................................................................................ 101 Common business risk strategies.................................................................................. 102 Key business responsibilities......................................................................................... 102 Contingency planning................................................................................................... 103 Develop the plan........................................................................................................... 104 Activity 8: Minimising risks........................................................................................... 107 The successful business..................................................................................................... 109 How did you go?........................................................................................................... 110 Answers and feedback for practice activities.................................................................. 111 Image Attributions......................................................................................................... 114 Glossary (continued):..................................................................................................... 115 Document name: BSBESB401_TL_SW Page 5 of 115 © TAFE NSW 2021 Getting started Document name: BSBESB401_TL_SW Page 6 of 115 © TAFE NSW 2021 What will I learn by completing this workbook? This workbook covers the unit of competency BSBESB401 Research and develop a business plan. Successfully completing this unit will give you the skills and knowledge to develop a business plan for achieving the objectives and goals of the business. In this workbook, you will learn how to: prepare and develop a business plan, draft and create a business plan for your business venture(s), finalise business planning and plan for risks. Each topic includes opportunities to check your progress and understanding as well as activities that will prepare you to complete the formal assessments. There are four topics to complete within this workbook. They are: 1. Prepare to develop a business plan. 2. Draft a business plan. 3. Create a business plan. 4. Finalise a business plan and plan for risk(s). Alright, let’s get started! Document name: BSBESB401_TL_SW Page 7 of 115 © TAFE NSW 2021 Icon Legend Icon Description Practice activity Learning activities help you to gain a clear understanding of the content in this resource. It is important for you to complete these activities, as they will enhance your learning. The activities will prepare you for assessments. Self-check An activity that allows you to check your learning progress. The self-check activity gives you the opportunity to identify areas of learning where you could improve. If you identify these, you could review the relevant content or activities. Resources (required and suggested) Additional resources throughout this workbook, such as chapters from textbooks, online articles, videos, diagrams, and infographics. These are supplementary resources, which will enhance your learning experience and may help you complete the unit. Video Videos will give you a deeper insight into the content covered in this workbook. If you are working from a printed version, you will need to look these up using the URL (link to the video online) provided. Document name: BSBESB401_TL_SW Page 8 of 115 © TAFE NSW 2021 Topic 1: Prepare to develop a business plan Document name: BSBESB401_TL_SW Page 9 of 115 © TAFE NSW 2021 Overview When you decide to start a business, you may find that you ask yourself some questions such as: Why do you want to be in business? What is your vision? Who are your customers, and how will you reach them? Is your business feasible? Do you understand your competition? How much capital do you need to start your business? What are the threats to your industry? How do you want your business to look in five years? All these questions can be answered by writing a business plan. A good business plan is like a map guiding you to find the best path to achieving your business goals. Setting business goals helps you to use your time and resources more effectively. Your business plan sets out your goals and how you will achieve them. In this topic, you will learn about: identifying the purpose of the business and the main components of the business plan, using goals and objectives that can measure business success, conducting research on market needs and estimating market size. The activities throughout this resource will assist you in your learning. These activities do not form a part of your final assessment; however, they will contribute to your understanding of the topic area. Answers and feedback for the practice activities are provided at the end of this document. Document name: BSBESB401_TL_SW Page 10 of 115 © TAFE NSW 2021 Understanding the purpose of business plans Figure 1 – Person using a tablet by Bongkarn Thanyakij under Pexel licence. Video Review the video What is a Business Plan? (LinkedIn Learning, 0:59 min) to understand what business plans are all about. Long URL: https://www.linkedin.com/learning/creating-a-business-plan-2/what-is-a-business- plan?autoplay=true&resume=false&u=57684225 This video will open in a new tab within your browser. You can access the full video by logging in with your TAFE NSW username and password. You can access a transcript of the video on the transcript tab within LinkedIn Learning. When you're finished, simply close the tab, and return to your course. The importance of business plans Regardless of their size, financial status, goals and overall mission, all businesses should have a comprehensive business plan which acts as a blueprint for future growth and success. When plans are well thought out, and put together clearly and logically, they can help guide all members of the workplace, and focus effort, time, and resources into achieving common goals. Document name: BSBESB401_TL_SW Page 11 of 115 © TAFE NSW 2021 As the owner, manager, or decision-maker in your business, you must understand the importance of having a detailed business plan in place, and how it can be an essential tool in maximising your business's potential in a fast and competitive marketplace. Here are some of the key reasons why your business can benefit from having a business plan, you might like to add more reasons by considering the specific benefits to your organisation. Business plans can be useful to: define your business or business venture, establish your organisation's mission and vision (long-term), analyse the marketplace and identify threats and opportunities within it, understand the products and services that you offer, understand your current financial situation and main sources of income and costs, identify Strengths, Weaknesses, Opportunities and Threats (SWOT analysis), devise budgets and allocate funding, create marketing and operational strategies, assign roles and responsibilities to employees, create timelines, establish goals, objectives, and milestones. Identifying business goals and objectives It is important to set clear goals and objectives for your business, to motivate and direct employees to improve your business, its reputation, and its financial standing. All goals must be easily measurable which can be achieved by setting and tracking a range of Key Performance Indicators (KPIs). Any KPIs set must be measured using consistent methods and result in quantifiable data, which can be measured at various points over a set timeframe. All objectives should follow the SMART principle. Figure 2 – © TAFE NSW 2020 Include short-term, medium-term, and long-term goals in your business plan. Long-term goals must be based on where you want to take your business months and years in the future, while short-term and medium-term goals will contribute to achieving the business's long-term goals. Document name: BSBESB401_TL_SW Page 12 of 115 © TAFE NSW 2021 Short-term goals should act as milestones on the way to achieving your long-term goals. Examples of short-term or medium-term business goals include: increasing sales of specific products or services, gaining a certain number of followers on social media platforms, increasing staff numbers by a specific percentage, adding new product lines, expanding the areas where you do business, both online and in physical stores. Documenting business goals and objectives Goals and objectives must be laid out clearly in your business plan, including accompanying information such as KPI measurement methods, timeframes, and strategies for achieving goals. A goal is an achievable outcome that is typically broad and long-term. A business might use goals to inform yearly strategies that each department will execute. On the other hand, an objective defines the specific, measurable actions each team employee must take to achieve the overall goal. To sum it up, the main difference between a goal and an objective is that goals provide direction, whereas objectives measure how you should follow that direction. Examples of business goal could be: to grow your brand awareness across Australia, to double our business revenue in 12 months, to increase your customer retention by 40 per cent. Document name: BSBESB401_TL_SW Page 13 of 115 © TAFE NSW 2021 Once you have set your business goals, you can then proceed to define your objectives as the measurable actions you can take to achieve your overall goals. Typically, you'd use the S.M.A.R.T. criteria to define and measure specific objectives. Table 1 – A simple criterion for goal setting is the SMART principle SMART Principle Description Specific State clearly what you want to achieve. Measurable Set tangible measures so you can measure your results. Achievable Set objectives that are within your capacity and budget. Relevant Set objectives that will help you improve aspects of your business. Time-bound Set objectives you can achieve within the time you need them. An example of objectives to achieve overall the goal of “Grow your brand awareness across Australia” could be as follows: To demonstrate my success at increasing brand awareness in the market, the objectives for the video marketing campaign will be a) 10% of all form submissions come from regional locations, and b) an increase in engagement from Facebook fans of multi-cultural backgrounds by 5%. Video Review the video Why you need a business plan? (LinkedIn Learning, 1:36 min) to understand why a business plan is so important for your business. Long URL: https://www.linkedin.com/learning- login/share?account=57684225&forceAccount=false&redirect=https%3A%2F%2Fwww.linkedin. com%2Flearning%2Fcreating-a-business-plan-2%2Fwhy-you-need-a-business- plan%3Ftrk%3Dshare_video_url%26shareId%3D7aXI6JhXRtquqz%252FgJTNVnQ%253D%253D This video will open in a new tab within your browser. You can access the full video by logging in with your TAFE NSW username and password. You can access a transcript of the video on the transcript tab within LinkedIn Learning. When you're finished, simply close the tab, and return to your course. Document name: BSBESB401_TL_SW Page 14 of 115 © TAFE NSW 2021 Business planning There are different types of business planning that many industries use and include in their operational and strategic plans, some of these planning tools will now be discussed. Feasibility study A feasibility study is a process that tests the viability of a business and can serve as a basis for creating a business plan. The study aims to determine whether the proposed business idea is technically and financially viable. It may include a cost-benefit analysis, risk assessment and solutions, operational control and efficiency, and timeline and resource estimations. A feasibility study tells you whether the business idea will work. A business plan tells you how it will work. Strategic Planning Strategic planning is the process of documenting and establishing the direction of a business. It assesses where the business currently is and where it plans to go. It includes the mission, vision and values of the organisation. It outlines the long-term goals of an organisation and the plans needed to reach those goals through a series of achievable actions. A strategic plan is a long- term plan and is created by top management. Operational planning An operational plan details the actions an organisation needs to carry out to achieve short-term targets and objectives. Operational planning includes: the strategies and tasks that need to be undertaken, a responsible person for each of the strategies and tasks, the timeline to complete tasks, the financial resources required. It is usually created by low-level management and includes specific plans for day-to-day activities and processes. Financial planning Financial planning is the process of establishing the objectives, policies, procedures, and budgets relating to the financial activities of an organisation. A financial plan can help with: ensuring adequate funds are available, Document name: BSBESB401_TL_SW Page 15 of 115 © TAFE NSW 2021 ensuring there is a reasonable balance between inflow and outflow of funds, developing a growth and expansion plan to help the long-term survival and success of the business, reducing uncertainties with regards to changing market trends. Marketing planning A marketing plan is a comprehensive document that outlines a business's overall marketing effort. It outlines how an organisation will implement its marketing strategy and the use of a combination of resources to achieve the business objectives. It includes doing market research and conducting a SWOT analysis. Marketing planning helps you promote products and services in your business that meet the needs of your target market. The content of your business plan Your business plan should include detailed information on all the categories listed above, including any areas that are specific to your business, geographical area, or industry. Format your business plan content so that it is clear and easy-to-understand, using appropriate language and highlighting any key information. The following categories outline what sort of information needs to be included in your business plan and why each is important. Each category will also be covered in more detail later in this unit. Business profile Start by including a range of basic information about your business to define it clearly. The business profile gives the reader adequate information about the business to be considered when reading your business plan. Basic business information may include: the number of employees you have, mission and vision statements, information on the types of products you sell, which demographics make up your customer base and target markets, basic financial information, the proposed size and scale of the business, how long your business has been operating for. Document name: BSBESB401_TL_SW Page 16 of 115 © TAFE NSW 2021 Marketing plan Your business will need to be put in context by laying out the details of the industry you operate in, including the opportunities and threats within it. Your business status and future goals will only make sense when they are related to your competitors and various marketplace variables, such as the rising and falling prices of materials and services. A market analysis must include information on your main competition. Your competitors are fighting to win the same customer that you are trying to sell to, whether they have a store physically close to yours, or if they are online competitors who sell the same products and services as your business. Successful businesses, large or small, offer something that their competitors do not, such as friendly service, cheaper prices or strong after-sales service. Keeping a close eye on your competition will help you react to their activity and dominate your market. A marketing plan should include: environmental trends, industry conditions, products and services of the business, competitors, target customers, marketing strategies, marketing controls. Rarely is there a single heroic marketing strategy or tactic that renders your business initiative successful. It’s more about the whole strategy comprising of a combination of tactics and methods. Products and services of the business Include information in your business plan about key products and services that you offer. Highlight the key items that bring in the most revenue and contribute to the financial health of your business. Depending on your product mix, you can also include detailed marketing plans in your business plan. For example, you may develop a priority list of products and services that need to be heavily marketed because of their large mark-up and profit-making potential. Document name: BSBESB401_TL_SW Page 17 of 115 © TAFE NSW 2021 You will need to identify: all the products and services you offer, the buying and selling prices of all products and materials, the target markets for products, key products that need to be advertised as a priority, the cost of marketing your products. Purchasing plan The purchasing plan is very specific to the type of business and its needs. The purchasing component looks at: suppliers, purchasing policies, purchasing controls. Personnel plan The organisational structure often informs the personnel plan for a business (Pugh, 1985). Personnel plans define an organisation’s structure or hierarchy of roles within the business, determines how activities such as task allocation, coordination, and supervision are directed toward achieving organisational goals. ccess Document name: BSBESB401_TL_SW Page 18 of 115 © TAFE NSW 2021 Include information about key personnel, including managers and supervisors, and the layout of the employee hierarchy. It is likely that your business will have a flatter hierarchy, with fewer levels between low-skill workers and management. Each employee may have a larger number of roles and responsibilities if this is the case. The personnel plan looks at the people within the business. The personnel component looks at: management details, business structure, staffing strategies, professional advisors, personnel controls. When completing your personnel plan, think about: the number of employees you have, all internal and external workers and their duties, the roles and responsibilities of each worker, the lines of communication between employees and management, employees with skills, knowledge, and experience, and how they are utilised. Financial plan The financial plan is one of the most important components of the business plan. This should include detailed information about your current financial situation, past financial performance, your main sources of income, your main costs, and budgets for various strategic activities. It should also include a detailed and accurate projection of financial performance. This can be based on past financial performance and planned activities over a certain time and may include graphs and charts for clarity. The financial plan looks at the financial requirements within the business. The financial component looks at: personal financial position, establishment costs, borrowing requirements, financial forecasts, financial records, business insurances, financial controls. Document name: BSBESB401_TL_SW Page 19 of 115 © TAFE NSW 2021 The financial plan could include detailed information, such as: past and current financial statistics, including: o expenditure, o balance, o profit/loss, o the trend of interest rates, o stock turnover, o return on investment. debtor’s collection periods creditor payment periods, types and amount of finance available, financial projections, including: o expected financial viability, o cash flow forecast, o expected levels of inflation and taxation. information on resources required and availability, information on sources of funding. Operational review The operational review is a review schedule to cover each of the elements you identify in the marketing plan, purchasing plan, personnel plan, and financial plan. The operational review becomes a checklist of how these controls will be reviewed, the frequency and by whom. Document name: BSBESB401_TL_SW Page 20 of 115 © TAFE NSW 2021 The main components of the business plan Figure 5 – White and black smartphone on white paper by Olya Kobruseva under Pexels licence. Video Review the video Define the problem you solve (LinkedIn Learning, 2:18 min) to understand all about defining the purpose of your business by describing the problem you’ll be solving. Long URL: https://www.linkedin.com/learning- login/share?account=57684225&forceAccount=false&redirect=https%3A%2F%2Fwww.linkedin. com%2Flearning%2Fcreating-a-business-plan-2%2Fdefine-the-problem-you- solve%3Ftrk%3Dshare_video_url%26shareId%3Dwn6UBxk9TT2E%252BUYjbKCU1g%253D%253 D This video will open in a new tab within your browser. You can access the full video by logging in with your TAFE NSW username and password. You can access a transcript of the video on the transcript tab within LinkedIn Learning. When you're finished, simply close the tab, and return to your course. Document name: BSBESB401_TL_SW Page 21 of 115 © TAFE NSW 2021 Identifying essential components of the business plan It is important to recognise that some parts of your business plan will be more important, than other parts. Identifying the parts of your business plan that drive at the heart of what you are trying to achieve, such as making your business more commercially successful and profitable, will help you focus your efforts on the parts of the plan that are likely to make the most difference. You will need to thoroughly analyse your business plan to highlight the essential areas – the parts of the plan that are most important to your business in the current business climate. If you have a strong knowledge of your business, what you want to achieve, and the key threats that your business faces, you should be able to prioritise areas of the business plan accurately. For example, you may identify that the most important categories in your business plan concern: financial planning and projections, identification of sources of revenue and cost, product knowledge and marketing strategies, employee roles and responsibilities, market analysis and competitors, mission and vision statements, operational plans for specific business activities and strategies, communication lines through the organisational hierarchy. Reviewing essential elements of the business plan Once you have identified the most important parts of your business plan, you need to review them to make sure your plan covers them in enough detail, and to make sure that enough research has gone into planning in these areas. All information included must be accurate and up-to-date while being free from exaggeration or irrelevant data. For example, if you identify that market analysis is one of the most important areas of your business plan, you will need to review competitor analyses, trade prices and customer spending habits in detail to make sure you have accurate and up-to-date information in these areas. Document name: BSBESB401_TL_SW Page 22 of 115 © TAFE NSW 2021 The essential elements of the business plan are that it is: specific – all information should be specific and include specific examples up to date – you should aim to carry out new research regularly free from exaggeration – it can be easy to inflate financial information and figures to improve the standing of your business in the business plan, but this will not help your business in reality unambiguous – all language should be clear and easy-to-understand time-bound – for example, timeframe information is necessary for goals, objectives, and financial information accompanied by relevant financial information – for example, budgetary information must be extensive accompanied by SMART goals, objectives, and strategies Document name: BSBESB401_TL_SW Page 23 of 115 © TAFE NSW 2021 Research market needs and estimate market size Figure 3 – Person making notes in notepad by Ketut Subiyanto under Pexels licence. Video Review the video Size the Market (LinkedIn Learning, 1:55 min) to begin learning about how to understand the market for your business. Long URL: https://www.linkedin.com/learning- login/share?account=57684225&forceAccount=false&redirect=https%3A%2F%2Fwww.linkedin. com%2Flearning%2Fcreating-a-business-plan-2%2Fsize-the- market%3Ftrk%3Dshare_video_url%26shareId%3D9akUWLkiRjqUFgAVZQHteg%253D%253D This video will open in a new tab within your browser. You can access the full video by logging in with your TAFE NSW username and password. You can access a transcript of the video on the transcript tab within LinkedIn Learning. When you're finished, simply close the tab, and return to your course. Document name: BSBESB401_TL_SW Page 24 of 115 © TAFE NSW 2021 Customer base You will need to know what sort of people make up your target markets and customer base, to understand the needs and desires of your customers. This is essential when creating a business plan, as the content of your plan should be shaped by customer behaviour. A customer base is simply defined as your most loyal and engaged customers. Knowing your current customer base will enable you to begin establishing what your business plan needs to look like. Your current customer base is your business–it is what has made the business successful – so acknowledging who these customers are and what sort of products and services they want and expect is vitally important. For example, you may identify your customer base as being urban or regional, might be ages between 18 to 34, or a certain income bracket. This is the group that's most likely to purchase the product your business has to offer. Having this information and making educated generalisations about who currently buys your products and services is essential in ensuring you retain this group of people to keep them coming back to do business with you. Your current customer base is made up of people who have bought your business's services and products before, or those that have expressed an interest in doing so. You will have to analyse marketing data, finding names, email addresses, and other contact details, to find out who makes up your customer base. Target market The target market for your products and services is different from your customer base. The target market is made up of the broad groups of people you are aiming your products and services at – those who are most likely to buy your products and services. You need to identify who the target market is for each of your business's products and services, as this will significantly influence business planning. Consider all the products and services that your business offers and then establish what type of person would hold a natural interest, or be naturally attracted to, buying those products and services. When working out exactly who your target market is, think about a range of demographic variables. For example, you may consider age, gender, and background to be variables which make it more or less likely that a specific person will be interested in your business's products and services. To find out market needs, you should consider: the hobbies and interests of your customers, common problems and difficulties faced by your customers, fashions and trends within customer groups, Document name: BSBESB401_TL_SW Page 25 of 115 © TAFE NSW 2021 products and services not offered by rivals (there must be some desire for these products and services), dream products and services that your customers may be interested in, the financial status of customers, spending habits of customers. Market size and potential As outlined above, your customer base will give you a good indication of the number of people who currently use your business regularly, or that have done so in the past. This will give you some idea of how many customers are available to you for marketing purposes, however, it will also be important to accurately estimate market size to understand the true potential of your business. Research To work out a roughly accurate figure about the numbers of people who may be interested in your business's products and services, you will need to use a variety of research tactics. To start, make some generalisations to define your typical customer. Then, analyse established competitors who offer the same products and services as you, to determine the size of their customer base and their financial status. Another way of determining market size is to carry out social media research to gauge how much interest there is in your products and services. You could carry out subject research on platforms such as Facebook and Twitter to find out how many people are talking about your products, or to identify how many follow pages, groups or events which are linked to what you offer. Services such as Google Trends can be used to get an idea of the level of interest there is surrounding the products you sell or the services you offer. There will always be an upper limit to the interest you can generate and therefore on the sales you can make. Remember, it is important to be realistic when estimating the size of your market and the potential of your business – exaggerating business potential won't necessarily lead to real-world sales. Document name: BSBESB401_TL_SW Page 26 of 115 © TAFE NSW 2021 Market size and potential will usually be dictated by: the types of products and services that you offer. If you offer a niche service, market size will generally be a lot smaller, the number of direct and indirect competitors you have, their current customer base, financial standing and methods of operation, the placement of your store, the financial health of your business, the online presence of your business, the economic climate - local, national, and global. Video Here is an example of a Value Proposition Canvas (YouTube, 3:12 min) that will help you understand what value propositions are about. Long URL: https://youtu.be/ReM1uqmVfP0. Always use reputable advisors to help you develop your marketing strategy, some reputable marketing advisors you might consider are: Document name: BSBESB401_TL_SW Page 27 of 115 © TAFE NSW 2021 Table 2 – Marketing advisors Common government advisors Common private advisors Business.gov.au Professional mentor https://business.gov.au/ Business colleague, partner, or associates The Australian Bureau of Statistics (research) Professional advisors, such as business https://www.abs.gov.au/ solicitors Professional market researchers Practice activity Activity 1: Preparing to develop a business plan Read the following questions then write true or false in the space provided. Questions True or False 1. A business plan acts as a blueprint for future growth and success. 2. The S in the SMART principle stands for simple 3. The financial plan should include detailed information about your current financial situation, past financial performance, your main sources of income, your main costs, and budgets for various strategic activities. 4. The operational review becomes a checklist of how controls identified at planning stage will be reviewed, how often and by whom. Document name: BSBESB401_TL_SW Page 28 of 115 © TAFE NSW 2021 Practice activity Activity 2: Market size and potential 1. Define the following terms: Customer Base: Target Market: 2. Explain how the research on your customer base and target market will be useful when identifying your market size. Document name: BSBESB401_TL_SW Page 29 of 115 © TAFE NSW 2021 3. Create a list of key terms and their definition as you learn them throughout this course. If you need more space, an additional table is included at the end of this workbook so you can keep recording key terms and what they mean as you work through this unit. Key terms Definitions Document name: BSBESB401_TL_SW Page 30 of 115 © TAFE NSW 2021 Topic 2: Draft a business plan Document name: BSBESB401_TL_SW Page 31 of 115 © TAFE NSW 2021 Overview Your business plan explains your objectives and the actions you need to take to make your business successful. Each component will help you focus your ideas and identify your priorities to give you direction. In this topic you will learn about: researching the legal and compliance requirements to meet the business goals and objectives, assessing the product mix, volumes, and pricing relevant to the target market and in line with business goals, planning marketing activities relevant to the product mix, developing a draft plan according to business goals and market needs. The activities throughout this resource will assist you in your learning. These activities do not form a part of your final assessment however they will contribute to your understanding of the topic area. Answers and feedback for the practice activities are provided at the end of this document. Document name: BSBESB401_TL_SW Page 32 of 115 © TAFE NSW 2021 The process to develop your plan Figure 4 – Woman working at home and making video call on laptop by Ketut Subiyanto under Pexels licence. Business goals set the direction for your business and are the foundation for your business strategies. Business goals are the medium- to long-term goals you seek to achieve in the next few years – usually ranging between five and ten years. The objectives are the shorter- term targets that will build and lead to the achievement of your goals. Both should be consistent with your business mission. Business objectives can be categorised as: operational, financial, personal. Once the longer-term objectives have been set, you then break down each of the objectives into short-term steppingstones – usually yearly goals – that are progressive achievements towards your longer-term objectives. Time and effort are required to develop a quality business plan. Document name: BSBESB401_TL_SW Page 33 of 115 © TAFE NSW 2021 The process to develop a business plan includes three key areas: research, identify business elements, seek advice. A formal business plan There are several reasons for developing a formal business plan. Business plans are essential when you are: starting up a new business, repositioning your business, buying an existing business, buying into a franchise, expanding or upsizing your business, consolidating or downsizing your business. A new business idea, regardless of the context that it is being applied to, needs to be clearly defined before it is brought to life. The owner/s must be focused and agree on the goals and objectives of the business. Anyone who invests money into a new or existing business should have a clear understanding of the business intentions and the return that is expected. Proper business planning helps all of this to happen. The written business plan formalises the mission, goals, strategies, and policies of the business through: focusing the owner’s efforts on planned business activities, providing employees with a better understanding of the business in which they work, informing finance providers about the business and its likely future success, informing potential investors about the business, they are considering investing in. Document name: BSBESB401_TL_SW Page 34 of 115 © TAFE NSW 2021 Your business plan will indicate: where you want to go, how you intend to get there, what you will need to get there, how you will know when you get there. It will help you to: think out exactly what you are going to do, build your business according to researched steps and tasks, assess your business’s performance over a period of time, provide a basis for applying for financial assistance, interest investors in your business; showing evidence of research and planning. Research the legal and compliance requirements for your business To begin your process to develop your business and business plan, you will need to make decisions on: business structure, business type, plan of action, how will you do it? how will you finance your business? who will you do business with? research helps you develop your answers and identify goals and targets, ensure your research is up-to-date and accurate, ensure your research is from a reliable source. Where are you at the moment To know where you are going, you need to know where you are at the moment. Analysing the current situation of the business is referred to as situational analysis. This involves determining the current business environment, the resources available, any potential opportunities or threats for the business, and any advantages or disadvantages the business may have at present. Document name: BSBESB401_TL_SW Page 35 of 115 © TAFE NSW 2021 Where do you want to be? Once you have completed the situational analysis of the business and determined the current situation, it's time to contemplate where either you would like or where the business needs to be in the future. This involves working out the vision, mission, and goals for the business. The mission statement for a business usually outlines the nature and purpose of the business. It's the "We are here to do this" statement. It answers the ‘Why’ question for your business’ existence. The vision is the broadest possible goal of the business. For example, "To be the leading Pet Grooming Business in the state with large branches in every major city of the country by 2030". Once you have worked out the vision and mission for the business, then you can work out the business goals. These are the outcomes you would like to see the business achieve. How are you going to get there? You've worked out where you're going. Now you'll need to work out a road map of how to get there. In other words, you need to devise strategies to achieve the business' goals, vision, and mission. Working out these strategies is essential, and again is best done by involving as many of the interested parties as possible. Document name: BSBESB401_TL_SW Page 36 of 115 © TAFE NSW 2021 Resources Additional resources For further information visit www.business.gov.au to review key business information, including: How to develop a business plan, finance information, and legal obligations. This website has great information on starting a business. You can also access valuable information from other sources, including: Attending business events on how to run a business. Business workshops or seminars. Take on a mentor or business coach. You may also receive resources from industry associations, when attending meetings, and/or working in the industry. Online learning platforms, such as: o LinkedIn Learning (https://www.linkedin.com/learning/) o SKILLSHARE (www.skillshare.com) o Udemy (www.udemy.com) Identifying the business elements Many businesses become distracted by the ‘flavour of the month’. Identifying your core market or activity at the start, in the planning stages of your core market, will help you focus on what you do better than anyone else. This will make it far easier to convince prospective customers that you stand out in your market, providing that your research confirms that there are enough prospective customers in the market that need your idea and can be informed of your existence. Decide: what does the business do? what are its main business activities? What is the unique value proposition of your business? What is your competitive advantage that make you products or services more desirable to customers than that of any other rival? Document name: BSBESB401_TL_SW Page 37 of 115 © TAFE NSW 2021 The largest part of the process for developing a business plan is to identify all of your business elements, including: legal and compliance requirements, market potential and strategies, source of finance, operations plan and objectives, staffing requirements, risks. Legal and compliance requirements Your business will need to follow all rules and standards imposed by federal and state or territory laws, as well as industry regulated rules and standards. To meet best business practices, and to avoid the legal repercussions of operating outside of the rules, any strategies you include in your business plan should adhere to relevant Australian legislation and applicable international conventions. Choosing your business structure The ownership structure describes the legal structure of your business. It should be a detailed explanation of the reason for selecting the business structure giving both the advantages and disadvantages of the selected structure. The most common business structures are: Sole trader, Partnership, Company. Sole trader A sole trader is the simplest form of business structure. It is also relatively easy and inexpensive to start and maintain. Many sole traders choose to trade under their own name, for example, J. Doe, while others opt to register a business name. More information on registering your business name can be found on the Business.gov.au website. Long URL: https://business.gov.au/Registrations/Register-your-business-name Document name: BSBESB401_TL_SW Page 38 of 115 © TAFE NSW 2021 As a sole trader, the owner will retain complete control of the business. There is no division between business assets or personal assets, which includes the share of any assets jointly owned with another person, such as a house or car. The liability of the sole trader is unlimited, which means that personal assets can be used to pay business debts. Sole traders are taxed as individuals and pay income tax at personal tax rates. This means the business income is declared on the sole trader's personal tax return along with any other assessable income, such as your salary or wages, interest, or dividends. Partnership A partnership involves two or more people, but no more than 20 (with some exceptions), going into businesses together to make a profit. In most cases, a partnership will need to register a business name with the Australian Securities and Investments Commission (ASIC) unless it uses the surnames of all the partners involved. A partnership is a relationship, not a separate legal entity. Each partner jointly owns and shares all the business assets and liabilities. Each partner must know his or her rights, responsibilities, and obligations. It is advisable to seek the help of a qualified professional to prepare a written partnership agreement. The agreement should state each partner's role and level of authority, their expected financial contribution and a clear procedure for dispute resolution and dissolving the partnership. This is important because personal liability is unlimited for every partner in the business. If the business fails and a partner cannot afford to pay their share of any debts incurred, other partners will be held liable for the shortfall. Partners are also jointly responsible for any debts other partners may incur, with or without the knowledge of other partners. Where there is no agreement in place, each partner is deemed to own equal shares of each asset as prescribed by the Partnership Act 1892 (NSW). Document name: BSBESB401_TL_SW Page 39 of 115 © TAFE NSW 2021 Company A company is a separate legal entity capable of holding assets in its own name and conducting business. A company can also sue and be sued. Shareholders own the company while directors run the company. In many cases, company directors are also shareholders, along with company employees. To become a company, an entity must: be incorporated under the Corporations Act 2001 (Cth); and be registered with the Australian Securities and Investment Commission (ASIC). Australian Company Number (ACN) Unlike business names, once registered, a company name can trade throughout Australia. Every Australian company receives a unique nine-digit Australian Company Number (ACN) that must appear on the company seal (if it has one) and every public document issued, signed or published. Tax requirements for a company The tax requirements for a company are quite different from the other business structures. It has its own tax income liability, which is completely separate to individual income tax. A company pays income tax at a flat rate of 30% on taxable income. Company liability A company's assets belong to the company and the company is liable for debts incurred which makes this type of business structure appealing to high-risk business ventures. Generally, the owner's assets cannot be accessed to pay for any company debts or liabilities. However, there are some exceptions. Financial institutions may require a personal guarantee against loans or overdrafts. A personal liability may arise if debts are caused recklessly, negligently or fraudulently. A company can sue and be sued, but the company director can also be held personally responsible for offences if they are found to have been negligent in performing their duties. Document name: BSBESB401_TL_SW Page 40 of 115 © TAFE NSW 2021 Proprietary and public companies Companies may be formed as: private, also known as proprietary; or public companies, that are listed on the stock exchange. Table 3 – Types of companies and their description Type of company Description Proprietary A proprietary company has no more than 50 non-employee company shareholders and is generally not permitted to offer shares or securities to the public. It must have at least one shareholder and one director, and at least one director must ordinarily reside in Australia. Public company A public company may have more than 50 non-employee shareholders, can offer shares and securities to the public, and may seek listing on the Australian Stock Exchange. Resources Additional resources Visit the website Choosing your business structure for further information from the Australian Tax Office (ATO), on choosing your business structure. Long URL: https://www.ato.gov.au/business/starting-your-own-business/before-you-get- started/choosing-your-business-structure/ Visit the website Help me decide for further assistance from business.gov.au on deciding your business structure. Long URL: https://share.tafensw.edu.au/share/items/b128f2d8-8d8a-44b2-a9f2- 8f7b901c4378/0/?attachment.uuid=330f1e91-c1eb-446f-ae25-d4813edd9e94 Document name: BSBESB401_TL_SW Page 41 of 115 © TAFE NSW 2021 Business Regulations All business owners in Australia must register before commencing any business activities. As well as registering a business name, there are a variety of taxes that can affect your business that may require registration. These may include: an Australian Business Number (ABN) an Australian Company Number (ACN), if the business is a company Goods and Services Tax (GST) Tax File Number (TFN) Pay as you go (PAYG) withholding tax. There are other registrations, such as registering for a domain name or registering a trademark, that may apply to the business. If operating as a company, a different registration process applies than if the business were a sole trader, partnership, or trust. Licenses When operating a business, you will need certain licences to make sure the business complies with legal obligations. The Australian Business Licence and Information Service (ABLIS) can help take the guesswork out the licences, permits and registrations needed to run the business. You can research ABLIS to find the requirements relating to government licences, permits, approvals, registrations, codes of practice, and standards and guidelines to meet your compliance responsibilities. The licence or permit that could be required may depend on the product or service being sold. You must find out whether there is a licensing requirement for the business, or there may be fines or other difficulties incurred. Businesses selling products for consumption, such as food, may require a Food Business Licence. However, there may be other licenses that are not obvious, and it is beneficial to do some research into this area. As licenses and permits can vary from state to territory, find out this information from the local, state or territory, or federal government to ensure that the right thing is being done. Document name: BSBESB401_TL_SW Page 42 of 115 © TAFE NSW 2021 Legislation compliance Your business plan must include information on your business practices, policies and procedures which follow: Business requirements. Tax requirements. Insurance requirements. WHS requirements. Employee requirements. Industry compliance Your business plan must include information on your business practices, policies and procedures which follow: Current certifications. Association affiliation. Up to date First Aid certifications. Industry codes of practice. Industry codes of practice Industry codes of practice provide a benchmark within a specific industry as to the standard that is expected and are enforceable rules that aim to give the consumer confidence in the industry. Industry codes of practice are not limited to ideals and behaviours to promote a safe work environment but can also be used when developing the procedures within the business as a minimum standard on how all staff and owners conduct the activities of the business. Document name: BSBESB401_TL_SW Page 43 of 115 © TAFE NSW 2021 Resources Additional resources Review the information on the Australian Business Licence and Information Service for further information on licenses, as well as industry-specific information. Long URL: https://ablis.business.gov.au/ Figure 5 – Left: Image of Australian Government Guided search. Right: Image of process steps to research information on business licence from www.ablis.buisness.gov.au This search assistant takes you through a series of questions and provides a list and links to requirements and registrations to relate to your business type and location that you will be operating from. There is a series of questions in part 3 of how you or intend to operate your business and the results of the information will be determined by your responses to these questions. Learn more about codes of practice from the Department of Primary Industries. Long URL: https://www.dpi.nsw.gov.au/ Document name: BSBESB401_TL_SW Page 44 of 115 © TAFE NSW 2021 Privacy Act A new set of privacy principles was introduced in March 2014. The principles cover how a business handles personal information, including the: handling and processing of personal information use of personal information for direct marketing purposes disclosure of personal information. To understand the Privacy Act 1988 (Cth) obligations that your business must comply with, you also need to be aware of the businesses obligations under the Australian Privacy Principles (APPs) which you can learn more about from the Office of the Australian Information Commissioner. Long URL: https://www.oaic.gov.au/privacy/the-privacy-act) Independent contractors Independent contractors are self-employed and provide a service to a business. Often negotiating their own payments and working arrangements, they can work for a range of clients at any given time. Before entering into a contract, it will be necessary to determine whether someone is classified as an independent contractor. Their status will affect their rights and obligations. Someone can be an employee for some work and an independent contractor for other work. Remember that it is illegal to fire, or threaten to fire, an employee if they do not agree to become a contractor. To comply with legal obligations, it is important to know whether the person is being hired as an independent contractor or an employee. Unfair dismissal When it comes to unfair dismissal, most businesses will fall under the Business Fair Dismissal Code. When planning to terminate an employee, it is important to follow the rules outlined in the code. Long URL: https://www.fwc.gov.au/about-us/legislation-regulations/small-business-fair- dismissal-code Document name: BSBESB401_TL_SW Page 45 of 115 © TAFE NSW 2021 Key compliance issues for business There are many key legal and ethical issues that you need to be aware of when creating a business plan for your business. As well as adhering to general laws which affect all businesses, you will need to conduct in-depth research to establish specific legal issues that will impact your business (depending on the industry you are in), your main business activities and the business strategies that you plan to implement. As a business owner, being legally compliant requires an awareness of rules and regulations. It is advisable to consult a legal professional to help with risk management, contingency planning and legal requirements that the business must comply with, such as WHS legislation, licences and registrations, and contracts and leases. Legal advice may help you in areas such as contracts, employment, Fair Trading, leases, insurance, credit and debt recovery, finance and tax. The following list points to general areas of law and legislation which the majority of businesses will need to be aware of–however, this is not an exhaustive list. Be aware that states and territories may also have specific legislation which governs what you can and can't do as a business. You may have to research and adhere to Australian law regarding: Accounting and recording Contract law o Copyright Act 1968 (Cth) Long URL: https://www.legislation.gov.au/Details/C2017C00180 Employment issues o Age Discrimination Act 2004 (Cth) (Long URL: https://www.legislation.gov.au/Details/C2020C00283 o Human Rights and Equal Opportunity Commission Act 1986 (Cth) Long URL: https://acfid.asn.au/sites/site.acfid/files/resource_document/Human-Rights- and-Equal-Opportunity-Commission-Act-1986.pdf o Disability Discrimination Act 1992 (Cth) Long URL: https://www.legislation.gov.au/Details/C2016C00763 o Equal Employment Opportunity Act 1984 (Cth) Long URL: https://www.legislation.gov.au/Details/C2016C00775 o Industrial Relations Act 1996 (NSW) Document name: BSBESB401_TL_SW Page 46 of 115 © TAFE NSW 2021 Long URL: https://legislation.nsw.gov.au/view/html/inforce/current/act- 1996-017 o Racial Discrimination Act 1975 (Cth) Long URL: https://www.legislation.gov.au/Details/C2016C00089 o Sex Discrimination Act 1984 (Cth) Long URL: https://www.legislation.gov.au/Details/C2014C00002 Fair trading o Competition and Consumer Act 2010 (Cth) Long URL: https://www.legislation.gov.au/Details/C2018C00437 o The Australian Consumer Law Long URL: https://www.accc.gov.au Insurance o Private Health Insurance Act 2007 (Cth) Long URL: https://www.health.gov.au/health-topics/private-health- insurance/about-private-health-insurance/private-health-insurance-laws Health and safety o Work Health and Safety Act 2011 (NSW) Long URL: https://legislation.nsw.gov.au/view/html/inforce/current/act- 2011-010 Liability o Civil Liability Act 2003 (QLD) Long URL: https://www.legislation.qld.gov.au/view/pdf/inforce/current/act- 2003-016 o Personal Injuries Proceedings Act 2002 (QLD) Long URL: https://www.legislation.qld.gov.au/view/pdf/inforce/current/act- 2002-024 Privacy issues o Privacy Act 1988 (Cth) Long URL: https://www.legislation.gov.au/Details/C2021C00139 o Privacy Regulation 2013 Long URL: https://www.oaic.gov.au/privacy/the-privacy-act/privacy- regulations Document name: BSBESB401_TL_SW Page 47 of 115 © TAFE NSW 2021 Obtaining a business solicitor for your business would be advantageous to understand the relevant business requirements, although management should have a thorough understanding of all the government legislation relevant to the business operation and the specific industry. Different industries may have legislation that they must follow. You can visit sites to gain relevant information for your business operation. Resources Additional resources Visit the Industrial Relations Commission website to view the Acts and Regulations to gain relevant information on legislation they may be relevant for your business. Long URL: https://www.irc.nsw.gov.au/ Visit the Federal Register of Legislation website for further information on legislation that may be relevant for your business. Long URL: https://www.legislation.gov.au/ Visit Legal essentials for business website to understand the laws that might apply to your new business. Long URL: https://business.gov.au/planning/new-businesses/legal-essentials-for- business Work health and safety (WHS) compliance Whatever industry you are in, the Workplace Health and Safety (WHS) legislation (previously Occupational Health and Safety) will contain some of the key rules and standards you need to address, administer and manage to keep people safe in your workplace and fulfil your duty of care requirements. Workplace Health and Safety legislation has been developed jointly by the government, employers and unions. The intent is to enable employers and employees to deal with workplace health and safety through consultation and cooperation. The legislation covers all workplaces, together with any place where employees or self-employed people work. All parties involved in a workplace have responsibilities for work, health and safety. Some businesses may not be aware of Workplace Health and Safety legislation or are under the assumption that having purchased Workers' Compensation insurance, they have met their responsibilities. This is NOT the case. Document name: BSBESB401_TL_SW Page 48 of 115 © TAFE NSW 2021 In New South Wales, WHS legislation includes the: Work Health and Safety Act 2011 (NSW) Long URL: https://legislation.nsw.gov.au/view/html/inforce/current/act-2011-010 Work Health and Safety Regulation 2017 Long URL: https://legislation.nsw.gov.au/view/html/inforce/current/sl-2017-0404 The National Work Health and Safety Commission (Safe Work Australia) (Long URL: https://www.safeworkaustralia.gov.au/about-us) has developed a code of practice to: provide practical guidance to employers in meeting certain standards, facilities, and amenities in the workplace prohibit certain activities in the workplace maintain the workplace in a safe and healthy condition. Document name: BSBESB401_TL_SW Page 49 of 115 © TAFE NSW 2021 Each state and territory have a WHS office, which can be contacted for further information and advice. The WHS legislation lists various safety standards to keep employees and visitors safe when attending your worksite. WHS legislation stipulates that employers must provide their staff with the following. Table 4 – WHS requirements for employers. Requirement Example Safe premises Think about the work car park and how pedestrians and cars use it–is it safe? Safe machinery and materials Has electrical equipment been tested and approved for use? Safe systems of work Is there a limit to how many employees can be in workspaces at any one time? Information, instruction, Are all employees given proper training in safety training, and supervision procedures in your business? A suitable working Are temperatures in the workplace safe for employees? environment and facilities Aims of the WHS legislation The aims of the WHS legislation include: promoting worker's health and safety, protecting workers from hazards, ensuring safe, hygienic working conditions, reducing, eliminating, and controlling hazards, promoting education and awareness of workplace health and safety, providing for the formulation of policies. Document name: BSBESB401_TL_SW Page 50 of 115 © TAFE NSW 2021 WHS regulations WHS regulations are concerned with the following aspects of the workplace: the overall working environment, personal protective clothing and equipment, sickness and accident reporting procedures, atmospheric and respiratory protection, noise control and hearing protection, prevention of falls, electricity, scaffolding, gantries, hoardings, and barricades, working in confined spaces, safety requirements concerning work processes, registration of plant items, identification of hazards and assessing risks, hazardous substances, storage and use of flammable materials, requirements concerning the use of certain hazardous substances, such as carcinogenic substances, lead, asbestos, and styrene. Duty of care Duty of care refers to the responsibilities of employers, employees and others who control workplaces. The duty of care extends as far as is 'reasonably practicable'. This means reasonable measures must be taken, bearing in mind factors such as: the severity of the hazard, the likelihood of the hazard occurring, how much is known about the hazard, and how to control or remove it, the availability, suitability, and cost of safeguards. Document name: BSBESB401_TL_SW Page 51 of 115 © TAFE NSW 2021 WHS responsibilities Workplace health and safety is everyone's responsibility. Some specific responsibilities can be broken down as follows. Table 5 – Roles and responsibilities Roles Responsibilities Employers Consult safety and health representatives and other employees on Workplace Health and Safety matters. Provide adequate protective clothing and equipment where hazards cannot be avoided. Ensure safe use of equipment and substances and disposal of substances in the workplace. Ensure individuals not directly employed, such as contractors, members of the public and clients, are not exposed to hazards in the workplace or harmed by the work. Warning signs are advised. Notify of workplace injuries. Employees Take reasonable care. Cooperate with employers. Follow instructions and the training provided. Do not interfere. Those who Ensure the workplace is safe and anyone can safely enter or leave. control workplaces Manufacturers, Ensure any article designed, manufactured and marketed is used importers, correctly and staff are not exposed to hazards. suppliers, Test equipment for hazards and provide information about safe designers use. Ensure people are not exposed to hazards. Document name: BSBESB401_TL_SW Page 52 of 115 © TAFE NSW 2021 WHS program A workplace health and safety program would include the following actions and associated tasks. Table 6 – WHS programs actions and associated tasks. Actions Tasks Owner or Acknowledge the importance of workplace health and safety. management Hold meetings with employees to communicate policy and any commitment and changes in policy. employee involvement Set the example by following all safety requirements. Assign responsibility for each aspect of the program developed. Worksite analysis Assess the workplace for any existing or potential hazards. Establish a system for monitoring the effectiveness of hazard control or prevention. Provide procedures for employees to notify of any hazards. Seek expert help in the initial stages of the workplace analysis as necessary. Hazard prevention Set up safe work procedures based on an analysis of hazards in and control the workplace. Provide personal protective clothing and equipment as appropriate. Provide for regular equipment maintenance Plan for emergencies including fire and natural disasters. Establish an emergency medical procedure for handling injuries. Document name: BSBESB401_TL_SW Page 53 of 115 © TAFE NSW 2021 Practice activity Activity 3: Legal and compliance requirements Respond to the following questions by selecting the correct answers. 1. What are the aims of the WHS legislation? # Choices Answer/s A. Reduce, eliminate, and control hazards. ☐ B. Ensure safe, hygienic working conditions. ☐ C. Promote workers’ health and safety. ☐ D. Protect workers from hazards. ☐ E. Provide for the formulation of policies. ☐ F. Promote education and awareness of work health and safety practices ☐ at work. Document name: BSBESB401_TL_SW Page 54 of 115 © TAFE NSW 2021 2. Match the correct number in Column A to the correct letter from Column B in the Answer column. Column A Answer Column B Sole Trader A. It is a type of business structure that is a separate legal entity from its owners. The owners are known as members or shareholders Partnership B. It is an individual running a business. It is the simplest and cheapest business structure. Company C. It is a business structure made up of 2 or more people who distribute income or losses between themselves. 4. Research the legislation and explain what is meant by the term 'person conducting a business or undertaking.' 5. What is the government website where a business owner can keep up to date with the legal requirements regarding licences? Document name: BSBESB401_TL_SW Page 55 of 115 © TAFE NSW 2021 Assess product mix, volumes, and pricing opportunities Figure 6 – People looking at a laptop by Cottonbro under Pexels licence. Video Review the video Articulate your value proposition (LinkedIn Learning, 2:54 min) to begin learning about how to understand the market for your business. Long URL: https://www.linkedin.com/learning- login/share?account=57684225&forceAccount=false&redirect=https%3A%2F%2Fwww.linke din.com%2Flearning%2Fcreating-a-business-plan-2%2Farticulate-your-value- proposition%3Ftrk%3Dshare_video_url%26shareId%3DQVpB4TOOTCykZ9k%252F9VdxQg%2 53D%253D This video will open in a new tab within your browser. You can access the full video by logging in with your TAFE NSW username and password. You can access a transcript of the video on the transcript tab within LinkedIn Learning. When you're finished, simply close the tab, and return to your course. Document name: BSBESB401_TL_SW Page 56 of 115 © TAFE NSW 2021 Product Mix The product mix is the total range of products on offer by a business that is intended to convince customers from its intended target market of being able to satisfy their needs and wants competitively. the product mix is derived from the business’ goals and resources, the Product Mix can be made up of Product as well as Services, the mix is arranged into orderly categories known as product lines. Product volumes Product volumes are the intended sales forecasts of the business that are influenced by 1. Market size of the target market. 2. Capacity of the business to deliver the products from its product mix. 3. Demand for each product from various product lines in the product mix. 4. Profitable worthwhileness or feasibility of each product. Product pricing opportunities Based on the goals and resources of the business and the size and makeup of the target market, these are the opportunities available to the business to price its products from the product mix to maximise the number of units sold and/or profit from each product sold. pricing opportunities are realised by the business’ using a pricing strategy that is aligned to its product mix and volumes. The pricing opportunities available to the business are also affected by its budget, resources and goals. Document name: BSBESB401_TL_SW Page 57 of 115 © TAFE NSW 2021 Applied example assessing of product mix, volumes and pricing Table 7 – Example of assessing of product mix, volumes and pricing. Products * Services * Hybrid ^

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