Ethiopian TVET-System

Technical & Vocational Education and Training

(TVET) Agency

TEACHING TRAINING
LEARNING MATERIAL
 Basic Account Works Level-II
 Learning Guide-1
 Unit of Competence: Develop Business Practice
 Module Title: Developing Business Practice
 LG Code: : LO1-LG-01
BUF BAW2 M09
 TTLM Code: BUF BAW2 M09 TTLM 0919v1

Compiled by:-
- Yosef bhiylu (MA)
- Brelaye kebde (MA)

Sep , 2012, bhare dare

CLEANING LEVEL - II

Learning Guide
#1
  Unit of Competence Develop Business Practice
 Module Title: Developing Business Practice
 LG Code: EIS MNS2 M09 LO9
 TTLM Code: EIS MNS2 TTLM 030712v1


 Be Innovative Leadership Development - Arms for Change

LO 1: Identify business opportunity

Instruction Sheet Learning Guide #1

This learning guide is developed to provide you the necessary information regarding the
following content coverage and topics:

o Investigation of business opportunities

o Undertaking of business feasibility studies
o Undertake product based market research
o Specialist and relevant parties feasibility study
o Emerging or changing technology
o Business opportunity and perceived risks,
o Developing of business plan
This guide will also assist you to attain the learning outcome stated in the cover page.
Specifically, upon completion of this Learning Guide, you will be able to –

 Identify business opportunity

 Identify personal business skills
 Plan for establishment of business operation
 Implement establishment plan
 Review implementation process

Learning Instructions:
1. Read the specific objectives of this Learning Guide.

2. Follow the instructions described in number ____ to ___.

3. Read the information written in the “Information Sheets 1”. Try to
understand what are being discussed. Ask you teacher for assistance if you
have hard time understanding them.
4. Accomplish the “Self-check 1,1” “Self-check 1,2” “Self-check 1,3” “Self-
check 1” 1.4 “Self-check 1” 1,5 in page __. 10, 17, 19, 22 ,28 respectively

5. Ask from your teacher the key to correction (key answers) or you can
request your teacher to correct your work. (You are to get the key answer
only after you finished answering the Self-check 1)
Information Sheet Identify business opportunity

1.1 Investigation of business opportunities Undertaking feasibility study

Introduction
A business opportunity involves sale or lease of any product, service, equipment, etc.
that will enable the purchaser-licensee to begin a business. The licensor or seller of a
business opportunity usually declares that it will secure or assist the buyer in finding a
suitable location or provide the product to the purchaser-licensee. This is different from
the sale of an independent business, in which there is no continued relationship required
by the seller.
A common type of business opportunity involves a company that sells bulk vending
machines and promises to secure suitable locations for the machines. The purchaser is
counting on the company to find locations where sales will be high enough to enable him
to recoup his expenses and make a profit. Because of the many cases of fraudulent
business opportunity in which companies have not followed through on their promises, or
in which profits were much less than what the company led the investor to believe,
governments closely regulate these operations.
Makeup of a business opportunity
A business opportunity consists of four integrated elements all of which are to be present
within the same timeframe (window of opportunity) and most often within the same
domain or geographical location, before it can be claimed as a business opportunity.
These four elements are:

 A need
 The means to fulfill the need
 A method to apply the means to fulfill the need and;
  A method to benefit

With any one of the elements missing, a business opportunity may be developed, by
finding the missing element. The more unique combination of the elements, the more
unique the business opportunity. The more control an institution (or individual) has over
the elements, the better they are positioned to exploit the opportunity and become a niche
market leader.
With so many business opportunities available, it is often difficult to determine whether a
particular opportunity shows great promise or is likely to fail. Your goal is to learn how
to tell a good opportunity from a bad one. Here are some tips that will help you assess the
potential of any business opportunity that comes your way and make the right decision.
One of the first factors to consider is the stability of the company associated with the
opportunity. In the case of a new business that does not yet have a proven track record,
you want to know who is behind the launch or who is supplying this company with
operating capital until the business begins to generate profits. Essentially, you want some
amount of assurance that the company will be around long enough for you to benefit
from a relationship with the opportunity, especially in terms of recouping any investment
of time or other resources.
Keep in mind that a new business or a plan to start a business may be riskier than going
with a company with an established track record. However, business opportunities of this
kind are not automatically suspect. If the funding is there and the organization is
structured properly, the opportunity is well worth your consideration.
Assessing the good or service offered by the business is also important. The best business
opportunities involve companies that offer something consumers will need or desire over
all other competing products. Business opportunities of this type are often great
moneymakers, since they address needs that are often overlooked by others. Along with
having a solid financial base and a product that is sure to attract attention, the best
business opportunities also have a comprehensive and well defined system for getting the
products to consumers. This includes such factors as a reliable process for producing the
good or service, excellent sales and marketing strategies, and an efficient delivery to the
buyer. Without the ability to satisfy orders quickly and efficiently, even the best product
is less likely to build a loyal client base.
Entrepreneurs often live with the hope that if they build it, customers will come. But in
today's economy, it takes a lot more than hope to get people to purchase your products or
services: New business-building practices are a must if you want to expand.
Another necessary element is a clear-cut plan for growth. But many entrepreneurs get
obsessed with creating the perfect plan. Or they never get around to putting one together.
Developing a good plan is necessary, quick and effective. And we can show you how to
do it. The following seven steps should take you no more than four hours to complete-a
small price to pay for a tremendous upside. A road map that will infuse new energy,
enthusiasm and vision into your company's growth plans.
There are different factors that affect business opportunity. These include:-
 The expected financial viability
 skills of operator
 amount and types of finance available
 returns expected or required by owners
 likely return on investment
 finance required
 lifestyle issues
Steps of identifying business opportunity
 Focus on your core product
 Keep your business area simple
 Stay true to who you are
 Map it
 Utilize marketing tools that work best for you
  Implement a plan of action
 Exercise the plan
Undertaking of business feasibility studies
A business feasibility study can be defined as a controlled process for identifying
problems and opportunities, determining objectives, describing situations, defining
successful outcomes and assessing the range of costs and benefits associated with several
alternatives for solving a problem. A business feasibility study is used to support the
decision making process based on a cost benefit analysis of the actual business or project
viability. The feasibility study is conducted during the deliberation phase of the business
development cycle prior to commencement of a formal business plan. It is an analytical
tool that includes recommendation and limitation, which are utilized to assist the decision
makers when determining if the business concept is viable.
Importance of business feasibility study
It is estimated that only one in fifty business ideas are actually commercially viable.
There fore a business feasibility study is an effective way to safeguard against wastage of
further investment or resources. If a business project is seen to be feasible from the result
of the study, the next logical step is to proceed with the full business plan. The research
and information uncovered in the feasibility study will support the the business planning
stage and reduce the research time. Hence, the costs of the business plan will also be
reduced. A through viability analysis provides an abundance of information that is
necessary in order to determine the business concept’s feasibility.
Finally, a feasibility study should contain clear supporting evidence for its
recommendation. The strength of the recommendation can be weighed against the
study ability to demonstrate the continuity that exists between the research
analyses and the proposed business.

Business feasibility study and dimensions of business viability

The business feasibility study finding will be assessed by potential investors and stake holders
regarding their credibility and depth of argument. The business feasibility study places the
findings of the dimensions of business viability model assessment into a formal business report.
It also aligns the findings with functional processes of enterprise which an audience can easily
understand. For the purpose of understanding the structure of a business feasibility study the
following represents the frame work of the dimensions of business viability.
 Market viability
 Technical viability
 Business model viability
 Management model viability
 Economic and financial model viability
 Exit strategy viability
Business and market analysis will contribute considerably to the business feasibility study.
Considerations should be given to using traditional business analysis techniques such as SWOT,
Porters five Forces and Pest. Although hey may not provide information which is perfect fit to
the proposed business model, they will provide a strong starting point for future analysis.
Self-Check 1.1 Written Test

Instruction: give short answer for the following questions

1. Write at least four factors that affect business opportunity.

2. Explain A business feasibility study can be defined as
 Answer Sheet Score = ___________
Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

1 There are different factors that affect business opportunity. These include:-
1. The expected financial viability
2. skills of operator
3. amount and types of finance available
4. returns expected or required by owners
5. likely return on investment
6. finance required
7. lifestyle issues

________________________________________________________________

________________________________________________________________

________________________________________________________________

2 A business feasibility study can be defined as a controlled process for identifying

problems and opportunities, determining objectives, describing situations, defining
successful outcomes and assessing the range of costs and benefits associated with
several alternatives for solving a problem

________________________________________________________________

________________________________________________________________

8. ________________________________________________________________

________________________________________________________________

________________________________________________________________

9. __________________________________________________________________________
__________________________________________________________________________
______________________________________________________________________
 1.2 market research
Marketing research
Marketing research involves conducting research to support marketing activities, and the
statistical interpretation of data into information. This information is then used by
managers to plan marketing activities, gauge the nature of a firm's marketing environment
and attain information from suppliers. Marketing researchers use statistical methods such
as quantitative research, qualitative research, hypothesis tests, Chi-squared tests, linear
regression, correlations, frequency distributions, poison distributions, binomial
distributions, etc. to interpret their findings and convert data into information. The
marketing research process spans a number of stages, including the definition of a problem,
development of a research plan, collection and interpretation of data and disseminating
information formally in the form of a report. The task of marketing research is to provide
management with relevant, accurate, reliable, valid, and current information.
A distinction should be made between marketing research and market research. Market research
pertains to research in a given market. As an example, a firm may conduct research in a target market,
after selecting a suitable market segment. In contrast, marketing research relates to all research conducted
within marketing. Thus, market research is a subset of marketing research.
Marketing environment
The market environment is a marketing term and refers to factors and forces that affect
a firm’s ability to build and maintain successful relationships with customers. Three
levels of the environment are: Micro (internal) environment - forces within the company
that affect its ability to serve its customers. Me so environment – the industry in which a
company operates and the industry’s market(s). Macro (national) environment - larger
societal forces that affect the microenvironment.
Market segmentation
Market segmentation pertains to the division of a market of consumers into persons with
similar needs and wants. For instance, Kellogg's cereals, Frostiest are marketed to
children. Crunchy Nut Cornflakes are marketed to adults. Both goods denote two
products which are marketed to two distinct groups of persons, both with similar needs,
traits, and wants.
Market segmentation allows for a better allocation of a firm's finite resources. A firm
only possesses a certain amount of resources. Accordingly, it must make choices (and
incur the related costs) in servicing specific groups of consumers. In this way, the
diversified tastes of contemporary Western consumers can be served better. With
growing diversity in the tastes of modern consumers, firms are taking note of the benefit
of servicing a multiplicity of new markets.
Market segmentation can be defined in terms of the STP acronym, meaning Segment,
Target and Position.
Types of Market Research
Market research, as a sub-set aspect of marketing activities, can be divided into the
following parts:
 Primary research (also known as field research), which involves the conduction
and compilation of research for a specific purpose.
 Secondary research (also referred to as desk research), initially conducted for one
purpose, but often used to support another purpose or end goal.
By these definitions, an example of primary research would be market research
conducted into health foods, which is used solely to ascertain the needs/wants of the
target market for health foods. Secondary research in this case would be research
pertaining to health foods, but used by a firm wishing to develop an unrelated product.
Primary research is often expensive to prepare, collect and interpret from data to
information. Nevertheless, while secondary research is relatively inexpensive, it often can
become outdated and outmoded, given that it is used for a purpose other than the one for
which it was intended. Primary research can also be broken down into quantitative
research and qualitative research, which, as the terms suggest, pertain to numerical and
non-numerical research methods and techniques, respectively. The appropriateness of
each mode of research depends on whether data can be quantified (quantitative research),
or whether subjective, non-numeric or abstract concepts are required to be studied
(qualitative research).
There also exist additional modes of marketing research, which are:
 Exploratory research, pertaining to research that investigates an assumption.
 Descriptive research, which, as the term suggests, describes "what is".
 Predictive research, meaning research conducted to predict a future occurrence.
 Conclusive research, for the purpose of deriving a conclusion via a research
process.
Marketing planning
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cleanup reason has been specified. Please help improve this section if you can.
The marketing planning process involves forging a plan for a firm's marketing
activities. A marketing plan can also pertain to a specific product, as well as to an
organization's overall marketing strategy. Generally speaking, an organization's
marketing planning process is derived from its overall business strategy. Thus, when top
management are devising the firm's strategic direction or mission, the intended marketing
activities are incorporated into this plan. There are several levels of marketing objectives
within an organization. The senior management of a firm would formulate a general
business strategy for a firm. However, this general business strategy would be interpreted
and implemented in different contexts throughout the firm.
Marketing strategy
The field of marketing strategy encompasses the strategy involved in the management of
a given product.
A given firm may hold numerous products in the marketplace, spanning numerous and
sometimes wholly unrelated industries. Accordingly, a plan is required in order to
effectively manage such products. Evidently, a company needs to weigh up and ascertain
how to utilize its finite resources. For example, a start-up car manufacturing firm would
face little success should it attempt to rival Toyota, Ford, Nissan, Chevrolet, or any other
large global car maker. Moreover, a product may be reaching the end of its life-cycle.
Thus, the issue of divest, or a ceasing of production, may be made. Each scenario
requires a unique marketing strategy. Listed below are some prominent marketing
strategy models.
A marketing strategy differs from a marketing tactic in that a strategy looks at the longer
term view of the products, goods, or services being marketed. A tactic refers to a shorter
term view. Therefore, the mailing of a postcard or sales letter would be a tactic, but a
campaign of several postcards, sales letters, or telephone calls would be a strategy
 Self-Check 1.1 Written Test

Instruction: give short answer for the following questions

1Explain the term business research ?

Answer Sheet Score = ___________

Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

1 Marketing research involves conducting research to support marketing activities, and the statistical
interpretation of data into information. This information is then used by managers to plan marketing
activities, gauge the nature of a firm's marketing environment and attain information from suppliers
1,3Seeking assistance from specialist and relevant parties

Financial advice
There are a number of professional financial services available, such as accountants,
bookkeepers or Business Activity Statement (BAS) agents.
Financial professionals can help you to:
 maintain your books
 create and stick to a budget
 monitor your cash flow
 help you decide on opportunities like buying new equipment, expanding your
business and leasing or buying a commercial space.
Find out more about the different types of financial resources to help finance your
business.
There are also free financial templates for you to set up a profit and loss statement or
a cash flow statement. See the full list on our templates
Specialists Marketing Services (SMS) is the nation’s leading, full service direct
marketing firm, specializing in: List Management, Brokerage, Fulfillment, Insert Media,
Compilation, Interactive, Multicultural, and Multi-Channel marketing solutions.
A member of an exchange who acts as the market maker to facilitate the trading of a
given stock. The specialist holds an inventory of the stock, posts the bid and asks prices,
manages limit orders and executes trades. Specialists are also responsible for
managing large movements by trading out of their own inventory. If there is a large shift
in demand on the buy or sell side, the specialist will step in and sell out of their inventory
to meet the demand until the gap has been narrowed.
Specialists and relevant parties include the following points.
o chamber of commerce
o financial planners and financial institution representatives, business
planning specialists and marketing specialists
o accountants
o lawyers and providers of legal advice
o government agencies
o industry/trade associations
 o online gateways
o business brokers/business consultants
Self-Check 1.1 Written Test

Instruction: give short answer for the following questions

1 list there are a number of professional financial services Specialists and relevant
parties include

Answer Sheet Score = ___________

Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

Specialists and relevant parties include the following points.
o chamber of commerce
o financial planners and financial institution representatives, business
planning specialists and marketing specialists
o accountants
 lawyers and providers of legal advice

1.4 Impact of e-commerce on business

Electronic commerce or ecommerce is a term for any type of business, or
commercial transaction that involves the transfer of information across the Internet. It
covers a range of different types of businesses, from consumer based retail sites,
through auction or music sites, to business exchanges trading goods and services
between corporations. It is currently one of the most important aspects of the Internet
to emerge.

Ecommerce allows consumers to electronically exchange goods and services with no

barriers of time or distance. Electronic commerce has expanded rapidly over the past
five years and is predicted to continue at this rate, or even accelerate. In the near
future the boundaries between "conventional" and "electronic" commerce will become
increasingly blurred as more and more businesses move sections of their operations
onto the Internet.

Business to Business or B2B refers to electronic commerce between businesses rather

than between a business and a consumer. B2B businesses often deal with hundreds or
even thousands of other businesses, either as customers or suppliers. Carrying out
these transactions electronically provides vast competitive advantages over traditional
methods. When implemented properly, ecommerce is often faster, cheaper and more
convenient than the traditional methods of bartering goods and services.

Electronic transactions have been around for quite some time in the form of Electronic
Data Interchange or EDI. EDI requires each supplier and customer to set up a
dedicated data link (between them), where ecommerce provides a cost-effective
method for companies to set up multiple, ad-hoc links. Electronic commerce has also
led to the development of electronic marketplaces where suppliers and potential
customers are brought together to conduct mutually beneficial trade.

The road to creating a successful online store can be a difficult if unaware of

ecommerce principles and what ecommerce is supposed to do for your online
business. Researching and understanding the guidelines required to properly
implement an e-business plan is a crucial part to becoming successful with online
store building.

What do you need to have an online store and what exactly is a shopping cart?

Shopping cart software is an operating system used to allow consumers to purchase

goods and or services, track customers, and tie together all aspects of ecommerce into
one cohesive whole.

While there are many types of software that you can use, customizable, turnkey
solutions are proven to be a cost effective method to build, edit and maintain an online
store. How do online shopping carts differ from those found in a grocery store? The
image is one of an invisible shopping cart. You enter an online e store, see a product
that fulfills your demand and you place it into your virtual shopping basket. When
you are through browsing, you click checkout and complete the transaction by
providing payment information.

To start an online business it is best to find a niche product that consumers have
difficulty finding in malls or department stores. Also take shipping into consideration.
Pets.com found out the hard way: dog food is expensive to ship FedEx! Then you
need an ecommerce enabled website. This can either be a new site developed from
scratch, or an existing site to which you can add ecommerce shopping cart
capabilities.
 The next step, you need a means of accepting online payments. This usually entails
obtaining a merchant account and accepting credit cards through an online payment
gateway (some smaller sites stick with simpler methods of accepting payments such
as PayPal).

Lastly, you need a marketing strategy for driving targeted traffic to your site and a
means of enticing repeat customers. If you are new to ecommerce keep things simple-
know your limitations.

Ecommerce can be a very rewarding venture, but you cannot make money overnight. It
is important to do a lot of research, ask questions, work hard and make on business
decisions on facts learned from researching ecommerce. Don't rely on "gut" feelings. We
hope our online ecommerce tutorial has helped your business make a better decision in
choosing an online shopping cart for your ecommerce store.

Self-Check 1.1 Written Test

Instruction: give short answer for the following questions

1 explain the advantages and des advantage Electron commerce

Answer Sheet Score = ___________

Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

Electronic commerce or ecommerce is a term for any type of business, or commercial
transaction that involves the transfer of information across the Internet. It covers a range
of different types of businesses, from consumer based retail site
1.5 Business plan
A business plan is a document that summarizes the operational and financial objectives of a
business and contains the detailed plans and budgets showing how the objectives are to be
realized. It is the road map to the success of your business. For anyone starting a business, it's
a vital first step.
What Are the Components of a Business Plan?
The formal, traditional business plan has the following sections:
 The Industry Overview
 Market Analysis
 Competitive Analysis
 Marketing Plan
 Management Plan
 Operating Plan
 Financial Plan
 Appendices and Exhibits
See the Business Plan Outline for a further description of each section of the plan.
Why Does Every Start-Up Need a Business Plan?
Every entrepreneur has heard stories of businesses that were started with little more than a few
post-it notes and some back-of-the-envelope calculations. In fact, some studies have shown
that for businesses that don't require startup loans or equity investment having a business plan
is not necessarily a predictor of success. However, the same studies have shown that
individuals who take the time to write a business plan are 2.5 times more likely to follow through
and actually start a business. In addition, going through the process of creating a business plan
improves entrepreneurial skills.
If you have an idea for starting a new venture, a business plan can help you determine if your
business idea is viable. There's no point to starting a business if there is little or no chance that
the business will be profitable - a business plan helps to figure out what your new business's
chances of success are. And in many cases, people starting new businesses don't have the
money they need to start the business they want to start. If start-up financing is required, you
must have an investor-ready business plan to show potential investors that demonstrates how
the proposed business will be profitable.
For example:
The market analysis will reveal whether there is sufficient demand for your product or service
in your target market - if the market is already saturated your business model will need to be
changed (or scrapped).
The competitive analysis will examine the strengths and weaknesses of the competition and
help direct your strategy for garnering a share of the market in your marketing plan. If the
existing market is dominated by established competitors, for instance, you will have to come up
with a marketing plan to lure customers from the competition (lower prices, better service, etc.)
The management plan outlines your business structure, management, and staffing
requirements. If you business requires specific employee and management expertise you will
need a strategy for finding and hiring qualified staff and retaining them.
The operating plan describes your facilities, equipment, inventory, and supply
requirements. Business location and accessibility is critical for many businesses - if this is the
case you will need to scout potential sites. If your proposed business requires parts or raw
materials to produce goods to be sold to customers you will need to investigate potential supply
chains.
The financial plan is the determining factor as to whether your proposed business idea is likely
to be a success and (if financing is required) whether you are likely to obtain start-up funding in
the form of equity or debt financing from banks, angel investors, or venture capitalists. You can
have a great idea for a business and excellent marketing, management, and operational plans
but if the financial plan shows that the business will not make enough income after expenses to
be profitable then the business model is not viable and there's no point in starting that venture.
In a nutshell, then, the answer to the question, What is a business plan? is that a business plan
is the due diligence that will prevent you from wasting time and money on a venture that won't
work.
Still have doubts? See 5 Reasons a Business Plan Is Key to Success.
The Business Plan Is a Living Document
Because the business plan contains detailed financial projections, forecasts about your
business's performance, and a marketing plan, it's an incredibly useful tool for everyday
business planning, and as such should be reviewed regularly and updated as required.
How to Write a Business Plan
My Writing A Business Plan series provides detailed instructions for working through each
section of the business plan. The Business Plan Outline is the starting page; it includes a brief
explanation of the contents of each section of the plan.
Note that the above is a detailed explanation of how to write a formal, full-fledged business plan;
there are different business plans for different purposes.
How Does the Business Plan Differ from the Investment Proposal?
Not much. They both have the same contents. You can think of an investment proposal as a
business plan with a different audience. The business plan is considered an internal document,
unlike the investment proposal, which is designed to be presented to external agencies. For
more about business plans crafted for investors, see Prepare an Investor Ready Business Plan.
See also:
The 7 Most Common Business Plan Mistakes
Simple Business Plan Template
A Coffee Shop Business Plan
One-Page Business Plan Templates
What Is a Business Plan?
A business plan is a written document that describes in detail how a business—
usually a new one—is going to achieve its goals. A business plan lays out a
written plan from a marketing, financial and operational viewpoint.
Business plans are important to allow a company to lay out its goals and attract
investment. They are also a way for companies to keep themselves on track
going forward.
Although they're especially useful for new companies, every company should
have a business plan. Ideally, a company would revisit the plan periodically to
see if goals have been met or have changed and evolved. Sometimes, a new
business plan is prepared for an established business that is moving in a new
direction.
 
While it's a good idea to give as much detail as possible, it's also important to be
sure the plan is concise so the reader will want to get to the end.
Understanding Business Plans
A business plan is a fundamental tool any startup business needs to have in
place prior to beginning its operations. Usually, banks and venture capital
firms make a viable business plan a prerequisite to the investment of funds in a
business.
Even though it may work, operating without a business plan is not a good idea. In
fact, very few companies are able to last without one. There are definitely more
benefits to creating and sticking to a business plan including being able to think
through ideas without putting too much money into them—and, ultimately, losing
in the end.
A good business plan should outline all the costs and the downfalls of each
decision a company makes. Business plans, even among competitors in the
same industry, are rarely identical. But they all tend to have the same elements,
including an executive summary of the business and a detailed description of the
business, its services and/or products. It also states how the business intends to
achieve its goals.
The plan should include at least an overview of the industry of which the
business will be a part, and how it will distinguish itself from its potential
competitors.
Want Funding? You Need a Business Plan
Elements of a Business Plan
As mentioned above, no two business plans are the same. But they all have the
same elements. Below are some of the common and most important parts of a
business plan.
Executive summary: This section outlines the company and includes
the mission statement along with any information about the company's
leadership, employees, operations, and location.
Products and services: Here, the company can outline the products and
services it will offer, and may also include pricing, product lifespan, and benefits
to the consumer. Other factors that may go into this section include production
and manufacturing processes, any patents the company may have, as well as
proprietary technology. Any information about research and development (R&D)
can also be included here.
Market analysis: A firm needs a good handle of the industry as well as its target
market. It will outline the competition and how it factors in the industry, along with
its strengths and weaknesses.
Marketing strategy: This area describes how the company will attract and keep
its customer base and how it intends to reach the consumer. This means a clear
distribution channel must be outlined.
Financial planning: In order to attract the party reading the business plan, the
company should include any financial planning and/or projections. Financial
statements, balance sheets, and other financial information may be included for
already-established businesses. New businesses may include targets for the first
few years of the business and any potential investors.
Budget: Any good company needs to have a budget in place. This includes
costs related to staffing, development, manufacturing, marketing, and any other
expenses related to the business.
Types of Business Plans
Business plans help companies identify their objectives and remain on track.
They can help companies start and manage themselves, and to help grow after
they're up and running. They also act as a means to get people to work with and
invest in the business.
Although there are no right or wrong business plans, they can fall into two
different categories—traditional or lean startup. According to the Small Business
Administration, the traditional business plan is the most common. They are
standard, with much more detail in each section. These tend to be much longer
and require a lot more work.
Lean startup business plans, on the other hand, use a standard structure even
though they aren't as common in the business world. These business plans are
short—as short as one page—and have very little detail. If a company uses this
kind of plan, they should expect to provide more detail if an investor or lender
requests it.
KEY TAKEAWAYS
 A business plan is a written document describing how businesses—both
new and established—plan to achieve their goals.
 Businesses may come up with a lengthier traditional business plan or a
shorter lean startup business plan.
 Good business plans should include an executive summary, products and
services, financial planning, marketing strategy and analysis, financial
planning, and a budget.
Special Considerations
Financial Projections
A complete business plan must include a set of financial projections for the
business. These forward-looking projected financial statements are often called
pro-forma financial statements or simply the "pro-formas." They include the
overall budget, current and projected financing, a market analysis, and its
marketing strategy approach.
In a business plan, a business owner projects revenues and expenses for a
certain period of time and describes the operational activity and costs related to
the business.
 Self-Check Written Test

Instruction: give short answer for the following questions

1 explain the term business plan and the component

Answer Sheet Score = ___________

Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

1 A business plan is a document that summarizes the operational and financial objectives of a
business and contains the detailed plans and budgets showing how the objectives are to be
realized. It is the road map to the success of your business

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________
 ________________________________________________________________

10. ________________________________________________________________

________________________________________________________________

________________________________________________________________

11. __________________________________________________________________________
__________________________________________________________________________
______________________________________________________________________
 CLEANING LEVEL - II

Learning Guide #2

 Unit of Competence: Develop Business Practice

 Module Title: Developing Business Practice
 LG Code: EIS MNS2 M09 LO2
 TTLM Code: EIS MNS2 TTLM 090712v1
 Nominal time: : 4 hrs

LO2: Identify personal business skills

Be Innovative Leadership Development - Arms for Change

Instruction Sheet Learning Guide

This learning guide is developed to provide you the necessary information regarding the
following content coverage and topics:

 Identifying available financial and business skills

 Assessing of personal business skills and attributes
 Identifying and assessing business risks

This guide will also assist you to attain the learning outcome stated in the cover page.
Specifically, upon completion of this Learning Guide, you will be able to –

 Identified available Financial and business skills and taken into account when
business opportunities are researched.
 assessed Personal skills/attributes
 Identified business risks and assessed according to resources available and
personal preferences.
Learning Instructions:
1. Read the specific objectives of this Learning Guide.
2. Follow the instructions described below.
3. Read the information written in the “Information Sheets”. Try to understand what are being
discussed. Ask you teacher for assistance if you have hard time understanding them.
4. Accomplish the “Self-check” 2.1“Self-check” 2.2“Self-check”2,3 “Self-check” “Self-check”
in page __43 , 46, 54., respectively.
5. Ask from your teacher the key to correction (key answers) or you can request your teacher to
correct your work. (You are to get the key answer only after you finished answering the Self-
check).
Information sheet Describe team role and scope

2.1. Financial and business skills

Before going deeper into business idea generation you need to test yourself as an
entrepreneur in terms of your personal characteristics, situations and skills. To help you
decide if you are the right kind of person to start a business, think about each of the
following factors. Decide for each one of them if it is strength or a weakness for you in
running your own business. Now, test yourself with the following:

Assessment of entrepreneurial characteristics (example)

Strengt
Characteristics Weakness
h

1.  Skills:
Practical abilities needed to produce the product,  e.g. to start a wood work
business you need to be able to measure, cut, nail parts together

Business management skills: Marketing, costing, record keeping

Knowledge of your line of business:  Market, competitors, suppliers

2.  Personal characteristics and situation:

Commitment: Willingness to put your business before almost everything else,
willingness to work long hours in the business and willingness to risk your own
money in the business
Motivation:
Are you keen enough to try your own business? 
Do you want to be your own boss? 
Do you want to have your own business not because you are unemployed?

Taking risk:  (i.e. readiness to take moderate risks that may not be avoided)

Making decisions:  (i.e. in your own business you are required to make

important decisions yourself instead of passing them to someone else.)

Family situation:  (i.e. good if your family supports your business idea)

3. Financial situation:

Do you have personal funds to put into the business?

Or are there other reliable sources?

Total number of strengths and weaknesses (example)

Are your strengths greater than your weaknesses?

The larger the number of strengths you have, the more you can feel comfortable to start
your business. In case you have weaknesses with respect to the above entrepreneurial
characteristics, be sure that there is room to eliminate or improve them. Do you feel
comfortable about starting a business after considering your strengths and weaknesses?    
Yes:..........  No:..........If yes, start generating your business ideas as outlined below.

The next step in establishing a new business is to select at least five to ten business ideas
through brainstorming. You identify your project ideas, which seem feasible and
profitable from your individual point of view. Brainstorming helps you make a first
selection of business ideas.

The second stage adds quality to the first stage by adjoining different parameters related
to economic judgements (market, skills, technology/equipment, raw material, availability
of solvent demand, situations of competitors). After the above-mentioned parameters are
evaluated and rated, new business start-ups can go into a finer crosschecking of the key
variables (Critical Success Factors) affecting the success or failure of the project idea. 

Use the following parameters to come up with one best business idea. For easier decision
making, it is possible to score each of the parameters as follows:
      Example for selecting one best business idea
Availability of:
Deman Staff Tools Raw Total Com- Grand 
d material petitors Total
  +  +  + + = - =
Business
 1st ideas
business idea 2 2 2 1 7 3 4
 2nd business idea 5 4 3 5 17 3 14
 3rd business idea 4 3 4 3 14 2 12
  Scoring system: 5 - extremely high; 4 - high; 3 - average; 2 - fair; 1 - poor; 0 - absent.

Test your business idea with a SWOT analysis

You need to know whether the selected business idea is a competitive and profitable
venture. One way to test a business idea is to do a SWOT analysis. A SWOT analysis is a
technique to identify Strengths, Weaknesses, Opportunities and Threats of enterprises or
projects whereby internal and external factors are considered. A SWOT technique can be
applied to the functional areas of an enterprise as well as projects, products and services.
For the purpose of starting a new business, the Strength, Weakness, Opportunity and
Threat (SWOT analysis) deserve greater attention as it helps you evaluate or decide
whether to start the business or not. 

 For strengths and weaknesses you look inside your business and your personal
situations possibly affecting the business venture;

 For opportunities and threats you look outside your business and try to assess
situations outside of your influence but which you can make use of or possibly
avoid.

Outcome of the SWOT analysis will enable you to:

 Continue with the selected business idea and make a full feasibility study;
 Make changes to the business idea or;
 Drop the business idea completely.

In order to check the feasibility of your envisaged business idea, you need to make a
SWOT analysis in terms of:
  Availability of market;
 Availability of raw materials and other supplies;
 Availability of appropriate equipment/technology;
 Technical skills;
 Organisation and management;
 Financial capacity and availability of appropriate loan facilities;
 Other external factors.

Identify available finance

Finance is essential for a business’s operation, development andexpansion. Finance is the
core limiting factor for most businesses andtherefore it is crucial for businesses
to manage their financial resourcesproperly. Finance is available to a business from
a variety of sources bothinternal and external. It is also crucial for businesses to choose
the mostappropriate source of finance for its several needs as different sourceshave its
own benefits and costs. Sources of financed can be classified based on a number of
factors. They can be classified as internal and external, Short-term and Long-term or
Equity and Debt. It would beuncomplicated to classify the sources as internal and
external.
Internal sources of finance: Internal sources of finance are the funds readily available
withintheorganisation.Internalsources of finance consists of:
 Personal savings
 Retained profits
 Working capital
 Sale of fixed assets
 Personal savings: This is the amount of personal money an owner, partner
orshareholder of a business has at his disposal to do whatever he wants.When a
 business seeks to borrow the personal money of a shareholder, partner or owner
for a business’s financial needs the source of finance isknown as personal savings.
 Retained profits: Retained profits are the undistributed profits of a company. Not
allthe profits made by a company are distributed as dividends to itsshareholders.
The remainder of the profits after all payments is madefor a trading year is
known as retained profits. This remainder of financeis saved by the business as a
back-up in times of financial needs andmaybe used later for a company’s
development or expansion. Retainedprofits are a very valuable no-cost source
of finance.
 Working capital: Working capital refers to the sum of money that a business
uses forits daily activities. Working capital is the difference of current assets
andcurrent liabilities (i.e. Working capital = Current assets – Currentliabilities).
Proper working capital management is also vital as it is also asource of finance for
a business.
Current assets: Current assets are also known as cash equivalents because they
areeasily convertible to cash. Current assets consist of Stock, Debtors, Prepayments,
Bank and Cash. These assets are used up, sold or keepchanging in the short run. Stock
this refers to the stock of goods available to the business forsale at a given time. It is very
important to maintain the right amount of stock of goods for a business. If stock levels
are too high it means that toomuch of money is being held up in the form of stock and if
stock levelsare too low the business will lose possible opportunities of higher sales.
Debtors – are a business’s customers owing money to the businesshaving been bought the
business’s goods or service on credit. If abusiness has cashflow problems it can maintain
a low level of debtors’ byencouraging the debtors to pay as early as possible.

Prepayments these are the expenses paid in advance. Thepayment being made even
before the expense occurs is a prepayment. Bank and Cash Bank is the cash held in banks
and cash is moneyheld by the business in the form of cash. Having too much of  money
inthe form of cash is also not good for a business since it can use thatmoney to invest and
earn a return but however a business should havehealthy current ratio (current
assets : current liabilities) of 2:1.
Current liabilities: Current liabilities are short-term debts that are in immediate needof
settlement. Some examples of current liabilities are creditors, accruals, proposed
dividends and tax owing. These obligations have to be paidwithin a year.Creditors – also
known as trade creditors are suppliers from whomthe business purchased goods on credit.
Paying the creditors as late aspossible will ease cash flow requirements for a business.
Accruals are the expenses owed by the business. Dividends proposed are the dividends
payable for the year that isnot yet paid. Tax owing is the sum of money owing as tax.

 Sale of fixed assets

Fixed assets are the assets a company that do not get consumed inthe process of
production. Some examples of fixed assets are land andbuilding, machinery, vehicles,
fixtures and fittings and equipment.Sometimes where the fixed asset is a surplus and is
abandoned, it can besold to raise finance in demanding times for the business.
Otherwisebusinesses may choose to stop offering certain products and sell its fixed assets
to raise finance. Selling fixed assets reduces the productioncapacity of a business
affecting a business’s return
External sources of finance
Sources of finance that are not internal sources of finance areexternal sources of finance.
External sources of finance are from sourcesthat are outside the business. External
sources of finance can either be:
 Ownership capital or
 Non-ownership capital
 a. Ownership capital
Ownership capital is the money invested in the business by theowners themselves. It can
be the capital funding by owners and partnersor it can also be share bought by the
shareholders of a company. There are mainly two main types of shares. They are:
 Ordinary shares
 Preference shares
Ordinary shares
Ordinary shares also known as equity shares are a unit of investment in a company.
Ordinary shareholders have the privilege of receiving a part of company profits via
dividends which is based on thevalue of shares held by the shareholder and the profit
made for the yearby the company. They also have the right to vote at general meetings
of the company. Companies can issue ordinary shares in order to raisefinance for long-
term financial needs.

Preference shares
Preference shares are another type of shares. Preferenceshareholders receive a fixed rate
of dividends before the ordinaryshareholders are paid. Preference shareholders do
not have the right tovote at general meetings of the company. Preference shares are also
anownership capital source of finance. There are several types of preferenceshares. Some
of them are Cumulative preference share, Redeemablepreference share, Participating
preference share and Convertiblepreference share.Cumulative preference shares – if a
company is in a loss makingsituation and is unable to pay dividends for one year then the
dividend forthat year will be paid the next year along with next year’s
dividends.Redeemable preference shares – these preference shares can bebought back by
the company at a later date. Normally the date of redemption is usually
agreed.Participating preference shares – give the benefit of additionaldividends to its
shareholders above the fixed rate of dividends theyreceive. The additional dividend is
usually paid in proportion to ordinarydividends declared.Convertible preference shares
– convertible preferenceshareholders have the option of converting their preference
shares toordinary shares.
b. Non-ownership capital
Unlike ownership capital, non-ownership capital does not allow thelender to participatein
profit-sharing or to influence how the business isrun. The main obligations of non-
ownership capital are to pay back theborrowed sum of money and interest. Different
types of non-ownershipcapital:
 Debentures  Grant
 Bank overdraft  Venture capital
 Loan  Factoring
 Hire-purchase  Invoice discounting
 Lease

The financial costs of the different sources of finance

Personal savings: have low costs since they are provided by an owner, partner or
shareholder. The owner may charge a rate of interest for theloan provided.
Retained profits: have opportunity cost, that is the money could havebeen used
elsewhere for some other purpose. Otherwise there aren’t anyother costs for this source of
finance.
Working capital: they do not have any costs other than opportunitycost.
Sale of assets: by selling fixed assets it uses then the firm’s productioncapacity will
diminish. If it sells unused or abandoned fixed assets thenonly the potential production
capacity reduces. Sometimes firms will haveto stop offering certain products or services
in order to sell its asset andraise finance. The asset may cost much more than what it sold
for if itwants to replace it.
Ordinary and Preference shares: dividends have to be paid out of profits to
shareholders as a return for their investment in the business. There are administrative
costs occurring from issuing shares like stockexchange listing fee, printing and
distribution fee and advertising fee.
Debentures: have to be paid a fixed or floating interest depending onthe type of
debenture that is issued.
Bank overdraft: interest is a little higher than for bank loans andinterest is calculated on
a daily basis.
Loans: Interest is usually fixed for short term loans, and long-term loansusually have a
variable rate of interest. Interest rates are lower than forbank overdrafts.
Hire-purchase: the business ends up paying more than the originalvalue of the asset for
its purchase.
Lease: the ownership of the asset remains with the leasing companyeven after the
business pays more than 90% of the asset’s value but however some leasing firms
provide the option of purchase of the asset anominal value.
Grants: are free and have no financial costs.
Venture capital: the venture capitalist will have some influence overthe business and
the business will have to share profits with the investor. The investor will want the capital
back at a later date.
Factoring: Factors charge a rate of interest of about 1.5% to 3% of theinvoice value as
finance charges. Interest is calculated on a daily basis.Credit management and
administrative fee are also charged and rangesfrom about 0.75% to 2.5% of turnover.
Invoice discounting: Invoice discounting also charges a rate of interestof about the same
but its credit management and administrative chargesare lower than a factors because
only finance is provided and sales ledgeris not maintained by an invoice discounting firm.
Advantages and Disadvantages of the differentsources of finance
1. Personal savings
Advantages
 The owner would not want collateral to lend money to the business.
 There is no paperwork required.
 The money need not necessarily be paid back to the owner on time.
 Can be interest free or carry a lower rate of interest since the ownerprovides the
loan.
Disadvantages 
 Personal savings is not an option where very large amounts of fundsare required. 
 Since it is an informal agreement, if the owner demands the moneyback in a short
notice it might cause cashflow problems for thebusiness.
2. Retained profits
Advantages
 They need not be paid back since it is the organisation’s ownsavings.
 There are no interest payments to be made on the usage of retained profits.
 The company’s debt capital does not increase and thus gearingratio is maintained.
 There are no costs raising the finance such as issuing costs forordinary shares.
 The plans of what is to be done with the money need not berevealed to outsiders
because they are not involved and thereforeprivacy can be maintained.
Disadvantages
 There maybe opportunity costs involved.
 Retained profits are not available for starting up businesses or forthose businesses
that have been making losses for a long period.
3. Working capital
Advantages
  Since it is an internal source of finance there are no costs involved.
 No repayment is needed.
 External parties cannot influence business decisions.
 Will not increase debt capital of the firm so gearing ratio ismaintained.
Disadvantages
 Opportunity costs are involved.
 Is not suitable for long term investments.
 Working capital cannot raise large amounts of funds.
 Total risk is undertaken by the company
Using working capital as a source of finance will affect the currentratio of the
business
4. Sale of assets
Advantages
 Funds are again raised by the business itself and therefore need notbe paid back.
 No interest payments are required.
 Large amounts of finance can be raised depending on the fixedasset sold.
 Would be the ideal source of finance if it was for an assetreplacement.
Disadvantages
 If the asset is sold then the business would lose opportunities togenerate income
from it.

2.1Self-Check Written Test

Instruction: give short answer for the following questions

1 identify available of finance source

2 explain the term SWAT analysis

 Answer Sheet Score = ___________
Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

1 Finance is essential for a business’s operation, development and expansion. Finance is
the core limiting factor for most businesses and therefore it is crucial for businesses
to manage their financial resources properly. Finance is available to a business from
a variety of sources both internal and external
2 You need to know whether the selected business idea is a competitive and profitable
venture. One way to test a business idea is to do a SWOT analysis. A SWOT analysis is a
technique to identify Strengths, Weaknesses, Opportunities and Threats of enterprises or
projects whereby internal and external factors are considered. A SWOT technique can be
applied to the functional areas of an enterprise as well as projects, products and services
2.2Personal skills/attributes (Assessing of personal business skills and attributes )
It is important to note that all successful entrepreneurs demonstrate persistence and commitment. The
ability to stick to your dream, to adapt to ever changingmarket conditions, and to follow through with
obligations is the most important attribute an entrepreneur can achieve:
Skills you need for business
While you probably don't need all of Branson's skills to succeed in business, you do need some of them.
They fall into three bundles:
 business skills
 leadership skills
System skills
Management Skills:
Management skills cover a wide array of abilities such as organizational skills, computer skills in some
instances, and the skills required for the business started. Management skills and computer technology are
changing rapidly; the Internet has changed the way business does business. This changing business
environment requires the entrepreneur to constantly learn and apply new skills if they wish to remain
competitive. What implication does this mean to the potential entrepreneur?
Continuous learning, life long learning is a motto for success. Attend seminars, workshops, business
conferences, join local business groups and keep up to date with changes within the entrepreneurs chosen
business field. It is important to never cease educational opportunities in the area of expertise required for
that particular business venture.

Financial Abilities:
Financial abilities are essential for today’s entrepreneur. Although entrepreneurs hire accountants and
bookkeepers to keep track of their business interests, the entrepreneur must have a strong understanding
of financial/accounting principles and practices. Financial abilities may include accounting skills,
organizational and administrative skills, an understanding of tax laws, and provincial/federal regulations.
This seems like a lot for the small businessperson to learn, that is because it is a lot to learn. Education is
the key to developing the financial abilities necessary to own and operate a business efficiently and
effectively. Numerous educational institutions including secondary institutions offer courses that will
enhance the potential entrepreneur’s financial abilities and in turn increase their likelihood of success.
Marketing Skills:
An entrepreneur may have the best product or service but if they cannot attract customers they are
doomed to failure. Marketing skills allows the entrepreneur to communicate and inform potential
customers of their products or services. Effective marketing encompasses one -on-one communication
skills and the ability to define and target your market or customer.
Defining and targeting your customer is one of the key success factors for business success, yet it is one
of the areas most neglected by the entrepreneur. Once the market has been defined, communicating
information to customer becomes the focus of marketing. This is not to suggest that this endeavour is a
one -time occurrence for the entrepreneur, defining and re-defining the target market must be an on-going
exercise for the business owner.
If education seems like a reoccurring theme in this guide, you are correct. Numerous organizations,
government agencies, and educational institutions offer marketing courses for the beginner or expert and
should be taken advantage of, especially for the neophyte entrepreneur

Personal Skills:
A positive attitude and healthy self -esteem are necessary qualities for the businessperson.
These qualities assist the entrepreneur in keeping motivated, organized, and better prepared to deal with
the stresses of business ownership. In addition, personal skills are required when dealing with customers,
suppliers, government personnel, and others who may become involved with the business venture.
Communication Skills:
Communication skills are essential for today’s entrepreneur or employee. This includes both written and
verbal communication skills. The businessperson of today may communicate with lawyers, accountants,
bank managers, employees, government officials and customers in a single day. Being able to
communicate your message or information clearly, orally or written, is essential for success.
The ability to communicate effectively with various audiences in a variety of forms is a skill few people
possess naturally. Fortunately, there are a variety of courses and associations that may help sharpen
communication skills. Toastmasters have been effectively “teaching” people how to get your message
across professionally. Educational institutions offer a variety of courses, seminars, and workshops
designed to improve written communication skills.
The 15 Most Important Business Skills
A list of the fifteen most important skills a business person can have.
1. Hunger for new knowledge
2. Problem solving skills
 3. Creativity, imagination and inventiveness
4. Networking skills (upward networking, leveraging)
5. Ability to get others to work for you (delegation)
6. Efficient time management abilities
7. Efficient resource management
8. Strategical analysis - where to focus
9. Ability to make tough decisions
10. Written and oral communication
11. Passion, energy and excitement
12. Ability to listen to other people's ideas
13. Know your audience and treat them well
14. Organization of documents, information and resources
15. Ability to set example with actions.

2.1Self-Check Written Test

Instruction: give short answer for the following questions

1 A list of the fifteen most important skills a business person can have

Answer Sheet Score = ___________

Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

A list of the fifteen most important skills a business person can have.
16. Hunger for new knowledge
17. Problem solving skills
18. Creativity, imagination and inventiveness
 19. Networking skills (upward networking, leveraging)
20. Ability to get others to work for you (delegation)
21. Efficient time management abilities

2.3. Business risks (Identifying and assessing business risks)

Defining risk assessment

Risk assessment is a systematic process for identifying and evaluating events (i.e., possible risks and
opportunities) that could affect the achievement of objectives, positively or negatively. Such events can
be identified in the external environment (e.g., economic trends, regulatory landscape, and competition)
and within an organization’s internal environment (e.g., people, process, and infrastructure). When these
events intersect with an organization’s objectives—or can be predicted to do so—they become risks. Risk
is therefore defined as “the possibility that an event will occur and adversely affect the achievement of
objectives.”
A process for capturing and analyzing risks
Understanding both the nature of the organization’s objectives and the types of possible risks under
consideration is key to determining the scope of the risk assessment. Objectives may be broad (e.g.,
considering organization-wide strategic, operational, compliance, and reporting requirements) or more
narrow (e.g., relating to a product, process, or function such as supply chain, new product sales, or
regulatory compliance). Likewise, possible risks may span many categories (e.g., market, credit, product,
liquidity, and accounting when considering credit crisis implications) or only a few if the discussion is
more narrowly focused (e.g., supplier risk). Finally, the scope may be enterprise-wide or limited to a
business unit or a particular geographical area.

Once the scope is defined, those possible risks deemed likely to occur are rated in terms of impact (or
severity) and likelihood (or probability), both on an inherent basis and a residual basis. The results can be
compiled to provide a “heat map” (or risk profi le) that can be viewed in relation to an entity’s willingness
to take on such risks. This enables the entity to develop response strategies and allocate its resources
appropriately. Risk management discipline then ensures that risk assessments become an ongoing
process, in which objectives, risks, risk response measures, and controls are regularly re-evaluated. The
risk assessment process therefore represents the cornerstone of an effective ERM program.
Risk assessment can therefore be conducted at various levels of the organization. The objectives and
events under consideration determine the scope of the risk assessment to be undertaken. Examples of
frequently performed risk assessments include:
 Strategic risk assessment. Evaluation of risks relating to the organization’s mission and strategic
objectives, typically performed by senior management teams in strategic planning meetings, with
varying degrees of formality.
 Operational risk assessment. Evaluation of the risk of loss (including risks to financial performance
and condition) resulting from inadequate or failed internal processes, people, and systems, or from
external events.
 Compliance risk assessment. Evaluation of risk factors relative to the organization’s compliance
obligations, considering laws and regulations, policies and procedures, ethics and business conduct
standards, and contracts, as well as strategic voluntary standards and best practices to which the
organization has committed. This type of assessment is typically performed by the
compliancefunction with input from business areas.
 Internal audit risk assessment. Evaluation of risks related to the value drivers of the organization,
covering strategic, financial, operational, and compliance objectives.
 Financialstatement risk assessment. Evaluation of risks related to a material misstatement of the
organization’s financial statements through input from various parties such as the controller, internal
audit, and operations.
 Fraud risk assessment. Evaluation of potential instances of fraud that could impact the
organization’s ethics and compliance standard, business practice requirements, financial reporting
integrity, and other objectives.
 Market risk assessment. Evaluation of market movements that could affect the organization’s
performance or risk exposure, considering interest rate risk, currency risk, option risk, and
commodity risk. This is typically performed by market risk specialists.
 Credit risk assessment. Evaluation of the potential that a borrower or counterparty will fail to meet
its obligations in accordance with agreed terms.
 Customer risk assessment. Evaluation of the risk profi le of customers that could potentially impact
the organization’s reputation and fi nancial position.
 Supply chain risk assessment. Evaluation of the risks associated with identifying the inputs and
logistics needed to support the creation of products and services, including selection and management
of suppliers (e.g., up-front due diligence to qualify the supplier, and ongoing quality assurance
reviews to assess any changes that could impact the achievement of the organization’s.
 Product risk assessment. Evaluation of the risk factors associated with anorganization’s product,
from design and development through manufacturing, distribution, use, and disposal.
 Security risk assessment. Evaluation of potential breaches in an organization’s physical assets and
information protection and security. This considers infrastructure, applications, operations, and
people, and is typically performed by an organization’s information security function.
 Information technology risk assessment. Evaluation of potential for technology system failures and
the organization’s return on information technology investments.
This assessment would consider such factors as processing capacity, access control, data protection,
and cyber crime.
 Project risk assessment. Evaluation of the risk factors associated with the delivery or
implementation of a project, considering stakeholders, dependencies, timelines, cost, and other key
considerations. This is typically performed by project management teams.
Key principles for effective and efficient risk assessments
For risk assessments to yield meaningful results with minimal burden to the organization, the
following key principles should be considered.
1. Governance over the risk assessment process must be clearly established.
Oversight and accountability for the risk assessment process is critical to ensure that the necessary
commitment and resources are secured; the risk assessment occurs at the right level in the
organization, the full range of relevant risks is considered, these risks are evaluated through a
rigorous and ongoing process, and requisite actions are taken, as appropriate.
2. Risk assessment begins and ends with specifi c objectives. Risks are identified and measured in
relation to an organization’s objectives or, more specifically, to the objectives in scope for the risk
assessment. Defining objectives that are specific and measurable at various levels of the organization
is crucial to a successful risk assessment. Evaluating the risks relative to such objectives facilitates the
reallocation of resources as necessary to manage these risks and best achieve stated objectives.
3. Risk rating scales are defined in relation to organizations’ objectives in scope. Risks are
typically measured in terms of impact and likelihood of occurrence. Impact scales of risk should
mirror the units of measure used for organizational objectives, which may reflect different types of
 impact such as financial, people, and/or reputation. Similarly, the time horizon used to assess the
likelihood of risks should be consistent with the time horizons related to objectives.
4. Management forms a portfolio view of risks to support decision making.
While risks are rated individually in relation to the objectives they impact, it is also important to bring
risks together in a portfolio view that pinpoints interrelationships between risks across the organization.
Correlations may exist, in which an increased exposure to one risk may cause a decrease or increase in
another. Concentrations of risks may also be identified through this view. The portfolio view helps
organizations understand the effect of a single event and determine where to deploy systematic responses
to risks, such as the establishment of minimum standards.
Leading indicators are used to provide insight into potential risks.
Risk reports are most meaningful and relevant when they draw out not only past events but also
forward-looking analysis
Essential steps for performing a risk assessment
1. Identify relevant business objectives.
It is important to begin by understanding the relevant business objectives in scope for the risk assessment.
These will provide a basis for subsequently identifying potential risks that could affect the achievement of
objectives, and ensure the resulting risk assessment and management plan is relevant to the critical
objectives of the organization.
2. Identify events that could affect the achievement of objectives.
Based on the organization’s objectives, the designated owners of the risk assessment should develop a
preliminary inventory of events that could impact the achievement of the organization’s objectives.
“Events” refers to prior and potential incidents occurring within or outside the organization that can have
an effect, either positive or negative, upon the achievement of the organization’s stated objectives or the
implementation of its strategy and objectives.
3. Determine risk tolerance.
Risk tolerance is the acceptable level of variation relative to the achievement of a specific objective, and
should be weighed using the same unit of measure applied to the related objective.

4. Assess inherent likelihood and impact of risks.

Events identified as potentially impeding the achievement of objectives are deemed to be risks and should
be evaluated based on the likelihood of occurrence and the significance of their impact on the objectives.
5. Evaluate the portfolio of risks and determine risk responses.
Based on the defined risk tolerance and inherent risk assessment, management can determine how to
address the identified risks. All organizations need to take on a certain level of risk when conducting
business in order to generate returns for their stakeholders. 6. Assess residual likelihood and impact of
risks.
Residual risk assessment considers both the risks as previously identified and the related risk response
mechanisms and control activities in place to determine the impact and probability of their occurrence.
Risk management process

1.risk
identifi
cation

4. risk 2.risk
control analysi
ling s

3.risk
respon
se

Common challenges to effective risk assessment

While risk assessment provides the means to identify and address potential risk factors, failure to perform
assessments effectively can lead to missed opportunities, both to avoid and capitalize on risk events.
Common business challenges include the following.
 Risk assessment is viewed as an episodic initiative providing limited value.
The owner of a risk assessment must clearly communicate its purpose, process, and expected benefits.
The right parties must be engaged to ensure relevant input, informed assessment, and meaningful and
actionable results. Moreover, the assessment must be a repeatable process that integrates into regular
business practices, adapts to change, and delivers more than one-time value.
 The amount of information and data gathered is difficult to interpret and use.
Failure to effectively organize and manage the volume and quality of assessment data makes interpreting
that data a challenge. Tools, templates, and guidance are necessary to ensure consistency in data capture,
assessment, and reporting.
 Results of the risk assessment are not acted upon.
Lack of clarity and accountability around objectives frequently leads to a failure to follow through on
assessment findings. It is therefore important that the risk assessment process begins by clearly
articulating objectives, designating their ownership, and linking them to the risks being assessed.
 Overcontrolling risk can be costly and stifl e innovation.
An organization is responsible for ensuring that its controls are designed and operating effectively,
focusing on key controls to the extent possible. It must also determine how much risk is acceptable and
how much variability it can tolerate. It must prioritize risk responses based on a cost/benefit analysis and
availability of resources. Lack of an effective risk assessment process and defined risk tolerance could
result in an organization overcontrolling a risk, which could place an excessive cost burden on the
organization and/or stifle its ability to seize opportunities.
 Risk assessments become stale, providing the same results every time.
Without refreshing their data capture, process, and reporting from time to time, risk assessments may lose
relevance.
 Risk assessment is added onto day-to-day responsibilities without being integrated into business
processes.
While tools and templates are helpful to ensure consistency in data capture, assessment, and reporting, it
is important that the risk assessment process be anchored and integrated into existing business processes.
 Too many different risk assessments are performed across the organization.
A shared approach should be defined for performing risk assessments, using common tools or templates,
common data sets (e.g., risk categories, libraries of risks and controls, rating scales), and flexible
hierarchies to enable streamlined data capture, an integrated assessment process, and fl exible reporting.
This enables a reduction in the number of risk assessments requested of the business or functional units
and an increased ability to rely on integrated processes while still meeting the risk requirements of the
various stakeholders. In order to develop these integrated processes, an organization should inventory its
current risk assessment processes and then share best practices and identify overlaps and gaps.
 Risk assessment will not prevent the next big failure.
As risk assessment provides a means for facilitating the discussion around key risks and potential control
failures, it helps reduce the risk of breakdowns, unanticipated losses, and other signifi cant failures.
 Putting key principles to work.
Customers, regulators, rating agencies, investors, and other stakeholders expect organizations to manage
risk effectively, with a robust risk assessment process serving as a cornerstone to their risk management
programs. The challenges listed above can impact organizations through business disruption, missed
opportunities, fi nancial penalties, or damage to reputation and brand value—but the key principles and
essential steps laid out earlier in this section can help organizations avoid these challenges.
Risk assessment: benefits and opportunities
The risk assessment process forms the cornerstone of an effective ERM program. When assessments are
performed systematically and consistently throughout the organization, management is empowered to
focus its attention on the most significant risks and make more informed risk decisions. For example,
organizations gain the ability to prioritize the deployment of capital and measurement of relative
performance across various objectives or entities, potentially reducing the occurrence and significance of
negative events, and their associated losses. Through effective risk assessment, organizations can also
better coordinate multiple risk responses, effectively addressing risks that threaten multiple business areas
or functions.
Most importantly, an effective risk assessment yields forward-looking insight, not only allowing
organizations to avoid risks, but providing greater and more meaningful clarity around the risks they do
face. Armed with this insight and perspective, organizations are much better positioned to take the right
risks, and can better manage them when they do. In the long run, organizations that continuously
reposition themselves to capitalize on both quick wins and longerterm opportunities are more likely to
meet and surpass their business objectives. It is this capability that will lead to measurable, lasting success
in today’s everchanging business environment.
Self check exercise Written test

Instruction: give short answer for the following questions.

1. Define risk assessment

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 Score = ___________
Answer Sheet Rating: ____________

Name: _________________________ Date: _______________

Part one: Short Answer Questions

1. Risk assessment is a systematic process for identifying and evaluating events (i.e., possible risks and
opportunities) that could affect the achievement of objectives, positively or negatively. Such events can be
identified in the external environment (e.g., economic trends, regulatory landscape, and competition) and
within an organization’s internal environment (e.g., people, process, and infrastructure).

____________________________________________________________
________________________________________________________________
________________________________________________________________
2. ________________________________________________________________
________________________________________________________________
________________________________________________________________
3. ________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
4. _______________________________________________________
________________________________________________________________
________________________________________________________________

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 CLEANING LEVEL - II

Unit Learning Guide of Competence: Develop

#3 Business Practice
Module Title: Developing
Business Practice
LG Code: EIS MNS2 M09 LO3
TTLM Code: EIS MNS2 TTLM 090712v1
Nominal time: 35 hrs

LO3: Plan for establishment of business operation

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Instruction Sheet Learning Guide #3

This learning guide is developed to provide you the necessary information regarding the
following content coverage and topics:
 Determining and documenting business structure and operation
 Develop and document business procedure
 Securing of financial backing
 Identifying and compiling Business legal and regulatory requirements.
 Human and physical resources and business operation commencement
 Developing and implementing recruitment strategies
This guide will also assist you to attain the learning outcome stated in the cover page.
Specifically, upon completion of this Learning Guide, you will be able to –.
 Procedures are developed and documented to guide operations.
 Financial backing is secured for business operation.
 Business legal and regulatory requirements are identified and complied.
 Human and physical resources required are determined to commence business operation.
 Recruitment strategies are developed and implemented
Learning Instructions:
1. Read the specific objectives of this Learning Guide.
2. Follow the instructions described below.
3. Read the information written in the “Information Sheet”. Try to understand what are being
discussed. Ask you teacher for assistance if you have hard time understanding them.
4. Accomplish the Self-check3.1, Self-check 3.2 , Self-check3.3 “Self-check”3.4
Self check 3.5 self checj3.6 in page __. 64, 69,70,73 75,80, respectively
5. Ask from your teacher the key to correction (key answers) or you can request your teacher
to correct your work. (You are to get the key answer only after you finished answering the
Self-check).

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Information sheet 3 Plan for establishment of business operation

Introduction
It is important to select an appropriate business structure to meet the needs of the business and
the owner. Making the wrong decision can result in personal debt, liability, additional taxes, loss
of public benefits, additional operating costs, and high tax preparation fees. Determining the
share of ownership and making a good decision on the business structure can avoid many future
problems.
3.1 Business structure and operations
How to Determine the Best Organizational Structure
Determining the organizational hierarchy that best suits your company includes analyzing how
your business operates. Use the output of your analysis to design your organizational structure.
Enable your employees to accomplish their work most effectively. Small companies tend to
require less structure than larger ones. So, make your decisions based your company size and
task complexity. If you choose a formal structure, all people doing similar jobs tend to be in the
same department. For example, all accountants should report to the Accounting Department.
Less formal organizations do not use many controls and form an organizational structure based
upon more flexible organization.
Instructions
1. Identify and document operational work procedures for your business.
2. Gather information about company job titles, descriptions and working relationships. Simple
job descriptions and limited interaction between job roles typically results in a vertically
oriented organizational structure with top-down management decision making. More complex
job descriptions and a lot of interaction between employees in producing products and services
typically result in organizations structured in a horizontal fashion, with few managers and more
collaboration between workers.
3. Analyze your work procedures to determine the optimal work flow. Decide how to group
your functions. Traditionally, forming separate departments (such as sales, marketing, human
resources and accounting) that function fairly independently works well for larger companies in
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stable industries. If your business environment changes rapidly, choosing a more flexible
adaptive structure typically makes more sense.
4. Analyze your work procedures to determine if there are any geographic, products, customer
or market considerations for structuring your company.
5. Examine your work procedures to determine if a matrix structure (in which specialized staff
divides their time between different functions) makes the best use of your available resources.
Reporting to two different managers can lead to employee confusion but it also can foster
innovation and creativity by providing guidance from more than one leader.
6. Establish strategic business units to facilitate the development of new programs, products and
services as your company becomes larger.
7. Set a time frame for implementing the organizational structure and assess its value on an
ongoing basis to fine tune your hierarchy and processes.
a) business structure
Organizers of new businesses need to structure their businesses in a way that best meets their
individual and collective needs. Structure has many facets including organizational, operational,
marketing, financial and legal. The focus here is on legal business structure. However, this
decision depends heavily on the choice of organizational, operational, marketing, and financial
strategy and structure. The principal forms of business organization discussed here are as
follows:
1. Sole proprietorship (SP),
2. General partnership (GP),
3. Limited partnership (LP),
4. Limited liability partnership (LLP),
5. C corporation (CC),
6. S corporation (SC),
7. Limited liability company (LLC) and
8. Cooperative corporations (co-op).

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Simply defined, a SP is a business owned and controlled by a single person. A GP is an
association of two or more people to carry on a business for profit. A LP is an association of two
or more people with at least one general partner and at least one limited partner conducting
business for the mutual benefit of the owners. LLPs are modifications of existing partnership
laws that limit personal exposure of some partners in a firm. A CC is a legally formed business
authorized to act with the rights and liabilities of a person independent of the shareholders. A
SC is a special type of corporation, similar to a CC that has met certain requirements set by the
Internal Revenue Service (IRS) and has made an election allowing the corporation to be taxed as
a partnership. A LLC, a relatively new business form, has the pass-through tax advantages of a
partnership and the Limited liability of a corporation. A co-op is similar to a CC, except it is
user-owned, user-controlled, and user-financed and has the pass through tax advantages of a
partnership. No one form of business organization is suited for all different business situations.
Your goal should be to select the legal form that best meets the needs of the business and its
owners.
Choosing a business form is one of the most important decisions a business makes. A business
should evaluate the options available and choose the form that best meets its needs. Although
this process may be time consuming and have associated costs, it is one of the best investments
a business can make. Keep in mind that the business form selected is not cast in stone. Changes
may occur that make it appropriate to change the way your business is structured. Internal
changes, such as a joint venture or acquiring another company, may provide a reason to change
your business structure. External changes, such as legal or tax developments, May also influence
your business structure however, it can be very costly to change your business form, primarily
because of tax consequences. This possibility needs to be considered when you organize a new
business.
There are basically five types of business structure:
1. Sole Proprietor – The easiest way to form a business is as a sole proprietor. The business
owner and the business are essentially the same. A sole proprietor does not even need a
federal employer ID number, but can do business under the individual owner’s Social

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 security number. The disadvantage to this structure is that the owner is personally liable for
the business. If the business is sued, it is the owner that is liable. If things don’t go well and
the business goes bankrupt, it is a personal bankruptcy.
2. Partnership – Partnerships are used when more than one person is involved in the
ownership of the business. The partners share in income and expenses based on their
percentage of ownership share in the partnership..
3. Sub S Corporation – A Sub S Corporation is treated like a partnership for taxes, but creates
a separate legal entity. It can protect the owner personally from suit or bankruptcy. The
ownership is in the form of shares, so ownership can be transferred more easily.
4. C Corporation – A C Corporation is a standard corporation and most large businesses use
this structure. C Corporations provide good liability protection for the owner(s); however a
C Corporation is seen as a separate entity and is taxed as such.
5. Limited Liability Company (LLC, PLLC) – An LLC is the newest form of business
ownership. It is a registered unincorporated entity. It gives the same legal protection as a
corporation, but without as much of the reporting and taxing requirements. Legal protection
for the owners is only effective if there is no mixing of personal and corporate money and
assets. An LLC can be set up to function like a sole proprietorship, partnership or Sub S
Corporation.
Finally, when identifying the detailed programming structure and operational sequence, the
designer should keep in mind to design for fast transaction and response times, small transfer
volumes and a small size of the application including fixed application and business data.
Factors of selection

There are six key factors organizers of a new business should consider when selecting a legal
business structure. They are:
1. Liability obligation of the individual owners,
2. Income tax obligation of the business and its individual owners,
3. legal filing formalities,
4. Financing and liquidity of equity investments,

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 5. Management flexibility and
6. Life of the business.
It is important to evaluate these factors to determine which structure is best for a business.
The Importance of an Organizational Structure
The importance of an organizational structure involves assisting business owners, CEOs, and
entrepreneurs to conceptualize, visualize, and construct a hierarchical system to be implemented
into their organization. For example, the building blocks of an organizational structure include:
a chain of command, span of control, departmentalization, distribution of authority, and
organization height.
Chain of Command

An organizational structure involves a chain of command which determines and defines: job
positions, who makes the decisions, and who's accountable for various duties.

Span of Control

Span of control determines and quantifies the actual amount of employees a manager
supervises.

Departmentalization

Departments within an organization structure are sections of the structure divided into
functional divisions (such as the Sales Department) relevant to specific tasks. Determining
what activities, tasks, and talents are to be grouped to best achieve an origination's objective
is called the departmentalization process.

Distribution of Authority

Distribution of authority determines if decision-making authority is concentrated among a

few high-level figures commonly seen in bureaucratic organizations or is the authority

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 shared and distributed throughout a variety of departments working closet to the their
corresponding tasks.

Organization Height

Organization height defines how many departments, divisions, and layers there are between
the highest levels and the lowest levels of an organization.

b) Business operation
The business operations job function (sometimes called “line management”) is responsible for
key business processes such as manufacturing, supply chain, or procurement. This role is central
to the successful design, production, and delivery of a company’s products or services. Specific
responsibilities differ by industry, according to the type of product or service the company is in
business to produce or deliver. But the common thread is that it’s the job of business operations
to optimize assets under financial constraints, meeting customer requirements, and supported by
relevant technology. Applying technology innovation is critical to achieving optimization across
a range of line-management functions.
The business operations function is complementary to other major functional roles of an
organization, including financial, customer management (marketing and customer service), and
technology management.
Business Operations Roles include:
 Supply chain operations: Sales and operations personnel must optimize product
production, balancing capacity and inventory levels in response to fluctuations in
customer demand, measuring results using a metrics framework. Reducing the
margin of forecast error reduces inventory costs, resulting in cost containment.
 Procurement: Here you use spend analysis (and potentially crowd-sourcing and
social analytics) to evaluate the performance of suppliers for specific products. This
enables targeting the right spend categories in order to yield savings.
 Manufacturing (or Product Development) is another role example.

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Self check exercise 3.1 Written test

Instruction: give short answer for the following questions.

1 The importance of an organizational structure involves assisting business owners

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 Score = ___________
Answer Sheet Rating: ____________
1 The importance of an organizational structure involves assisting business owners, CEOs, and
entrepreneurs to conceptualize, visualize, and construct a hierarchical system to be implemented
into their organization. For example, the building blocks of an organizational structure include:
a chain of command, span of control, departmentalization, distribution of authority, and
organization height.

Name: _________________________ Date: _______________

Part one: Short Answer Questions

3.2 Procedures to guide operations ( Develop and document business procedure )

All businesses have documents, whether electronic or on paper. These documents are also
considered assets to the company. From these documents, reports are made and analyzed and
will influence important business decisions. Since there are two types of documents to be
managed, a document management plan should be developed to effectively organize them.
Developing a document management plan basically involves the following steps:
1. Imposing standards in creating documents. Businesses have different documents that keep
piling up every single workday. Examples of these are sales invoices, payment notices, receipts,
balance sheets, spreadsheets, and sales reports. For these documents to be highly organized there
should be an existing format or standard in creating them. Decide upon the format or template to
be used in each document. Create a standard procedure on sharing or reviewing the documents.
Finally, make sure that everyone involved in producing business documents are oriented in the
standards that you have imposed.

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2. Decide on a document storage procedure. Paper documents have a greater chance of
damage, and it would be best to do document scanning and document imaging to also have an
electronic copy of these documents. Now that you also have electronic copies of your paper
documents, you can decide on the physical aspect of document storage. Paper documents can be
stored in filing cabinets, while electronic documents can be stored on a computer or a computer
server. Either way, what is important is that you have a predetermined way of effectively filing
and retrieving your documents. Lots of money and opportunities will be lost when needed
documents are hard to find, mind you. Next, decide on a procedure on how you will archive
your business documents. For example, at the end of the year, you can compile all kinds of
documents in just one big folder or binder and label it with the year it was created. For
electronic documents, you may just create a folder in your computer labeled with the year and
move all electronic documents there categorized by type.
3. Create a file retrieval system. Once again, know that time and money may be lost when
staffs find it hard to retrieve a file. A good document retrieval system will be achieved if the
document storage procedure you have developed is effective. Another way to prevent problems
in document retrieval is to create a file location list. This is a list that is printed and posted at
every workstation in the company. Specify both the drive and folder in the computer or the
filing cabinet where a specific document can be found.
4. Think of ways of keeping your documents secure. This would mean installing security
systems in your establishment and securing all possible points of entry. Set a schedule for
periodic backing-up of files, and designate a drive where the back-up files will be stored. Do not
store your back-up files in the same hard-drive where the original electronic files are stored.
Develop a sound business purpose
Determining what values you have in common and what is really important to the people in the
business is not something to be rushed thought and reflection are needed to gain agreement.
Allow whatever time is needed to develop a sense of trust, ownership, commitment and unity.
You can then discover what people really want. To help develop a common sense of purpose:

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  Work out who needs to be involved. It is recommended that all family members have
a chance to contribute to the discussion. Many businesses also involve employees in
this step.
 Start with each person working individually on their values and goals. Then share
and discuss these to develop a combined ‘values and goals statement’ for the
business.
 Write down the agreed-upon values and goals as a statement of business intent.
Display this in a prominent location.
 Review the statement regularly. Allow values and goals to evolve over time. You
will gain ownership, commitment and unity.
 Use values and goals to shape decisions. In this way the business will remain focused
on what people really want.
Using this process with family and business members will assist greatly with finding and
maintaining a balance between work and family time.
Self check exercise3.2 Written test

Instruction: give short answer for the following questions.

1 explain business document

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 Score = ___________
Answer Sheet Rating: ____________

All businesses have documents, whether electronic or on paper. These documents are also
considered assets to the company. From these documents, reports are made and analyzed and
will influence important business decisions. Since there are two types of documents to be
managed, a document management plan should be developed to effectively organize them.

3,3 Obtaining finance

Financing is an issue for almost every business. For large businesses with a corporate structure,
financing is usually easier. The main types of financing are debt and equity.
 How much do you need to start and where will it come from? Some of the more common
forms of personal financial resources are:
 Saving
 Home equity
 Owner cash
 Credit
 Retirements plan
 Borrowing bank
 Grants: If you sreaching for aGovernment grant or no intrest loan to start abusiness,
 Loans: Lenders expects you to have “skin in the game” and be able to put up 20-30 %of
the total start up cost either as cash or equity investment.
 Character: Lenders are looking for reliable borrowers who have demonstrated
responsibility and have ahigh credit score.
 Collateral: Bank or any collateral agreement.

Self check exercise3,3 Written test

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Instruction: give short answer for the following questions.

1 explain personal financial resources

Answer
 1 personal financial resources are:
 Saving
 Home equity
 Owner cash
 Credit
 Retirements plan
 Borrowing bank

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 Score = ___________
Rating: ____________
3.4 Business legal and regulatory requirements
Identifying and compiling Business legal and regulatory requirements.
The introduction of competition in the marketplace does not mean regulation is unnecessary.
Quite the contrary, the role of the regulator actually increases once governments authorize
competition, particularly during the early stages of transition from the former model of
monopoly provision to one of effective competition. In order to transition to an effective
competitive environment, regulators must establish a regulatory framework that can resolve
disputes, address anticompetitive abuses, protect consumers, and attain national goals such as
universal access; industrial competitiveness or economic productivity and growth regulation is
not an end in itself. Rather it is the vehicle to attain, and subsequently sustain, widespread
access, effective competition and consumer protection. The liberalization and introduction of
competition in the market requires strategic policies and regulations that establish an effective
regulator remove explicit barriers to entry (e.g., the inability to interconnect with the incumbent
operator), and dismantle implicit barriers. As such, regulatory reform must include measures
aimed at:
1. Creating independent entities to oversee the introduction of competition in the market
and establish regulatory mechanisms for issues such as interconnection, licensing, and
tariff rebalancing,
2. Preparing the incumbent operator to face competition, including timetables setting
deadlines for the termination of market exclusivities,
3. Allocating and managing scarce resources such as numbers and spectrum resources in a
non-discriminatory way within the liberalized market,
4. Promoting and protecting consumer interests, including universal service and privacy.

An organization may choose to implement an environmental management system (EMS) for a

variety of reasons; for example to:
 manage legal compliance;
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  demonstrate environmental commitment and achieve environmental improvements;
 satisfy customer expectations;
 reduce risks with regard to the environment; and
 Improve commercial performance and enhance reputation.
From the regulators’ point of view the first of these reasons is the most important and a well
implemented EMS can be appreciably useful to an organisation in managing compliance.
However, the same system can also offer benefits to the regulator in terms of assessing and
evaluating compliance. Regulators expect organisations to take responsibility for the
environmental impacts of their activities, products and services. They consider management and
maintenance of legal compliance to be a fundamental deliverable for an EMS. Compliance with
legal requirements regarding environmental protection should result in appropriate
environmental control measures and better environmental performance.
Types of legislation
International treaties and agreements
International treaties may or may not be binding legal requirements on signatories. Usually
national governments; where the UK is a signatory to a treaty, there may be an international
dimension to European and national legislation. This may not be apparent at organization,
operator and site level although one would expect organizations operating across national
boundaries to be aware of international obligations. Examples of international treaties are:
 The United Nations Framework Convention on Climate Change and the subsequent
Kyoto Protocol (UNFCC, 2004);
 The Rio Convention on Biological Diversity (UN, 1992); and
 The United Nations Convention on Long-Range Transboundary Air Pollution (UN,
1979) and the subsequent Convention on Long-Range Transboundary Air Pollution on
Further Reduction of Sulphur Emissions (UN, 1994).
At local level Ethiopian Constitution 1994 and Ethiopian environmental protection policy 1997
are the major one.

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Identifying applicable legislation
The first step in managing compliance with environmental legal requirements is to know which
requirements are applicable to an organisation’s activities, products and services. Various
sources of information are used by organisations to identify and assess environmental legal
requirements.
Self chech exercise 3.4 Written test

Instruction: give short answer for the following questions

1. List the pricipal forms of business organization

Score = ___________
Answer Sheet Rating: ____________

Name: _________________________ Date: _______________

Part one: Short Answer Questions

1.________________________________________________________________
________________________________________________________________
________________________________________________________________
2.________________________________________________________________

3.5 Human and physical resources and business operation

Organizing, the process of structuring human and physical resources in order to accomplish
organizational objectives, involves dividing tasks into jobs, specifying the appropriate
department for each job, determining the optimum number of jobs in each department, and
delegating authority within and among departments. One of the most critical challenges facing
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lodging managers today is the development of a responsive organizational structure that is
committed to quality.
1. The framework of jobs and departments that make up any organization must be
directed toward achieving the organization’s objectives. In other words, the
structure of a lodging business must be consistent with its strategy.
2. Managers give structure to a hotel and lodging through job specialization,
organization, and establishment of patterns of authority and span of control.
The human resources department serves no customers, books no business, and prepares no
meals, yet it plays a vital role in Ms efficient operation. The three functions of the human
resources department are employee recruitment, benefits administration, and training. The
director of human resources is also expected to be an expert on federal and state labor laws and
to advise managers in other departments on these topics. The human resources department’s
major challenge is in its interactions with other M departments.
Although the human resources department recruits, interviews, and screens prospective
employees, the final hiring decision rests within the department in which the potential employee
will be working.
The same is true of promotion and disciplinary decisions; the human resources department’s
input is, in most cases, limited to advice and interpretation of legal questions. The human
resources department’s effectiveness depends on its manager’s ability to form effective working
relationships with managers of other departments.
Self chech exercise 3.5 Written test

Instruction: give short answer for the following questions

1 explain human resources department

Score = ___________
Answer Sheet Rating: ____________

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The human resources department serves no customers, books no business, and prepares no
meals, yet it plays a vital role in Ms efficient operation. The three functions of the human
resources department are employee recruitment

Name: _________________________ Date: _______________

Part one: Short Answer Questions

1.________________________________________________________________
________________________________________________________________
________________________________________________________________
2.________________________________________________________________

3.6 Recruitment strategies ( Developing and implementing recruitment

strategies )

If you are new to a management position, a job in recruitment, or have simply been charged
with the task of recruiting a new employee for a role, the process can seem a little daunting.
Finding the right person for a position can be just as stressful as going for the job yourself,
which is why developing a sound recruitment strategy, is so important. We’ve put together a
step-by-step guide that will help you implement workable strategies that make the recruitment
process run as smoothly as possible, and result in you finding appropriate candidates, faster.
Step One: Resource Analysis
The first step in implementing a good recruitment strategy is to analyse the resources that are
going to be available to you. Advertising budgets, manpower, website subscriptions and time are
all things that should be taken into consideration. Will you outsource to one or more recruitment
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firms? Included in this step are the decisions about which resources to allocate where and it may
require some trial and error, especially in terms of choosing the best recruitment firm, if that is
the route you plan to take.
Step Two: Documentation
Whether you’re using a recruitment firm or using in-house recruitment, documenting the
process is important for several reasons. Firstly, balancing the output and input of resources
when hiring new recruits is crucial to maintaining good business practises. It may not seem like
a problem to spend a few days on hiring one new person, but over time, the money, time and
productivity that is expended on recruiting needs to be worth the productivity, money and time
gained by the new hires, and a good strategy will have this as a major goal. Secondly, there are
legal and ethical obligations in recruitment that must be met, and having the process
documented means there is less room for dispute or for legal issues to arise. Investing in some
good recruitment software or ensuring that the recruitment firm you’re using has adequate
documentation strategies is key.
Step Three: Reflect, Analyse and Amend
The third stage is the most important, and the reason for having a recruitment strategy in the first
place. Reflecting on recruitment successes or failures, analysing the documentation and
amending areas to reflect the choices that work best for your company is the best way to make
sure your strategy gets the best results. Information such as which firms provided the best
candidates, which areas most of your best hires are coming from and where your resource
outputs are seeing the best returns can be used to hone your techniques and strategies to an art.
Recruitment jobs- require an analytical and practical approach to problem-solving, and the
more structured and tested your recruitment strategy is, the better chance you have of success.

Develop and Implement Recruitment and Selection Strategies.

1. Assess organization’s ability to recruit and select the desired employees

 Analyze trends that may impact on recruitment and selection strategies
 Identify organizational issues that may impact on recruitment and selection
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  Communicate and present analysis results to management team to ensure
management buy-in recruitment and selection strategies
2. Facilitate development of recruitment and selection strategies
 Recommend strategies that align existing organizational and human resource
services and strategies with recruitment and selection requirements
 Select appropriate recruitment channels and selection methods
 Communicate recruitment and selection strategies to relevant stakeholders
3. Coordinate the implementation of recruitment and selection strategies
 Lead the human resource team in developing an action plan to implement
recruitment and selection strategies
 Ensure that sufficient resources are made available to deliver objectives of the
recruitment and selection strategies
 Support human resource team in the implementation of recruitment and selection
strategies
 Evaluate the appropriateness of strategies against organization goals and
objectives and identify required changes to human resource services and
strategies
4. Monitor and review the effectiveness of recruitment and selection strategies
 Develop processes and systems for gathering measurement data and feedback
 Analyze measurement data and feedback to establish performance against
required criteria
 Review best practices relating to recruitment to identify potential improvements
 Recommend refinements or modifications to recruitment and selection strategies

Pre-requisites for recruitment selection

 Understand the principles of the recruitment and selection process and their related
techniques, methods and tools.

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 Understand and communicate roles and relationships between human resource
professionals and business partners.
 Determine research objectives and select research methodologies suited to the analysis of
human resource functions, activities and initiatives.
 Write and present reports on research findings for consideration by more senior members
in an organization.
 Work with models and methods for the management and development of human resource
activities, services and programmes.
 Work with privacy and confidentiality considerations that govern all human resource
transaction.

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Self chech exercise 3.6 Written test

Instruction: give short answer for the following questions

1explain recruitment strategy

Score = ___________
Answer Sheet Rating: ____________
, a job in recruitment, or have simply been charged with the task of recruiting a new employee
for a role, the process can seem a little daunting. Finding the right person for a position can be
just as stressful as going for the job yourself, which is why developing a sound recruitment
strategy

Name: _________________________ Date: _______________

Part one: Short Answer Questions

1.________________________________________________________________
________________________________________________________________
________________________________________________________________
2.________________________________________________________________
________________________________________________________________
________________________________________________________________
3.________________________________________________________________
________________________________________________________________
________________________________________________________________
_______________________________________________________________

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 Basic Account Work – L II

Learning Guide
#4
 Unit of Competence: Develop Business Practice
 Module Title: Developing Business Practice
 LG Code: EIS BAW2 M04 LO4
 TTLM Code: EIS BAW2 TTLM 130919v1

LO4: Implement establishment plan

Instruction Sheet Learning Guide #4

This
learning guide is developed to provide you the necessary information regarding the following content coverage
and topics:
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 o Undertaking of marketing
o Gathering of physical and human resources
o Establishing of operational unit
o Develop and implement monitoring process
o Maintain and update legal documents
o Understanding contractual procurement and business operation
o Arranging Options of business premise leasing/ownership
This guide will also assist you to attain the learning outcome stated in the cover page. Specifically, upon
completion of this Learning Guide, you will be able to –
 Identify undertaking of Market business operation
 Explain implementation of Physical and human resources
 Establish Operational unit
 Develop Monitoring process for managing operation.
 Maintain Legal documents and records
 Secure contractual procurements rights for goods and services
 Identify Options for leasing/ownership of business premises
Learning Instructions:
1. Read the specific objectives of this Learning Guide.
2. Follow the instructions described below.
.
3. Read the information written in the “Information Sheets”. Try to understand what are being
discussed. Ask you teacher for assistance if you have hard time understanding them.
4. Accomplish the “Self-check ”4.1 Self-check 4,2,,Self-check, 4.,3Self-check,,4.5 Self-check ,4,6
Self-check in page 86,,88,93,,99,,102,, respectively
5. Ask from your teacher the key to correction (key answers) or you can request your teacher to
correct your work. (You are to get the key answer only after you finished answering the Self-
check 1)

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Information Sheet Identify business opportunity

4.1 Marketing of business operation

Marketing is "the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and society
at large.
Evolution of marketing
An orientation, in the marketing context, related to a perception or attitude a firm holds towards
its product or service, essentially concerning consumers and end-users. Throughout history,
marketing has changed considerably in conjunction with consumer tastes. Constant throughout,
however, is that marketing is some form of communication aimed broadly at improving eventual
sales.
Contemporary approaches
Recent approaches in marketing include relationship marketing with focus on the customer,
business marketing or industrial marketing with focus on an organization or institution and
social marketing with focus on benefits to society. New forms of marketing also use the internet
and are therefore called internet marketing or more generally e-marketing, online marketing,
search engine marketing, desktop advertising or affiliate marketing. It attempts to perfect the
segmentation strategy used in traditional marketing. It targets its audience more precisely, and is
sometimes called personalized marketing or one-to-one marketing. Internet marketing is
sometimes considered to be broad in scope, because it not only refers to marketing on the
Internet, but also includes marketing done via e-mail and wireless media.

Customer orientation

Constructive criticism helps marketers adapt offerings to meet changing customer needs.
A firm in the market economy survives by producing goods that persons are willing and able to
buy. Consequently, ascertaining consumer demand is vital for a firm's future viability and even

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existence as a going concern. Many companies today have a customer focus (or market
orientation). This implies that the company focuses its activities and products on consumer
demands. Generally, there are three ways of doing this: the customer-driven approach, the
market change identification approach and the product innovation approach.
A formal approach to this customer-focused marketing is known as SIVA. (Solution,
Information, Value, Access). This system is basically the four Ps renamed and reworded to
provide a customer focus. The SIVA Model provides a demand/customer-centric alternative to
the well-known 4Ps supply side model (product, price, placement, promotion) of marketing
management.

Product → Solution

Promotion → Information

Price → Value

Place → Access

If any of the 4Ps were problematic or were not in the marketing factor of the business, the
business could be in trouble and so other companies may appear in the surroundings of the
company, so the consumer demand on its products will decrease. However, in recent years
service marketing has widened the domains to be considered, contributing to the 7P's of
marketing in total. The other 3P's of service marketing are: process, physical environment and
people.
Some qualifications or caveats for customer focus exist. They do not invalidate or contradict the
principle of customer focus; rather, they simply add extra dimensions of awareness and caution
to it.

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The work of Christensen and colleagues. on disruptive technology has produced a theoretical
framework that explains the failure of firms not because they were technologically inept (often
quite the opposite), but because the value networks in which they profitably operated included
customers who could not value a disruptive innovation at the time and capability state of its
emergence and thus actively dissuaded the firms from developing it. The lessons drawn from
this work include:
 Taking customer focus with a grain of salt, treating it as only a subset of one's corporate
strategy rather than the sole driving factor. This means looking beyond current-state
customer focus to predict what customers will be demanding some years in the future,
even if they themselves discount the prediction.
 Pursuing new markets (thus new value networks) when they are still in a commercially
inferior or unattractive state, simply because their potential to grow and intersect with
established markets and value networks looks like a likely bet. This may involve buying
stakes in the stock of smaller firms, acquiring them outright, or incubating small,
financially distinct units within one's organization to compete against them.
Organizational orientation
In this sense, a firm's marketing department is often seen as of prime importance within the
functional level of an organization. Information from an organization's marketing department
would be used to guide the actions of other departments within the firm. As an example, a
marketing department could ascertain (via marketing research) that consumers desired a new
type of product, or a new usage for an existing product. With this in mind, the marketing
department would inform the R&D department to create a prototype of a product/service based
on consumers' new desires.
The production department would then start to manufacture the product, while the marketing
department would focus on the promotion, distribution, pricing, etc. of the product.
Additionally, a firm's finance department would be consulted, with respect to securing
appropriate funding for the development, production and promotion of the product. Inter-
departmental conflicts may occur, should a firm adhere to the marketing orientation. Production

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may oppose the installation, support and servicing of new capital stock, which may be needed to
manufacture a new product. Finance may oppose the required capital expenditure, since it could
undermine a healthy cash flow for the organization.
Marketing environment
The market environment is a marketing term and refers to factors and forces that affect a
firm’s ability to build and maintain successful relationships with customers. Three levels of the
environment are: Micro (internal) environment - forces within the company that affect its ability
to serve its customers. Me so environment – the industry in which a company operates and the
industry’s market(s). Macro (national) environment - larger societal forces that affect the
microenvironment.
Market segmentation
Market segmentation pertains to the division of a market of consumers into persons with similar
needs and wants. For instance, Kellogg's cereals, Frosties are marketed to children. Crunchy Nut
Cornflakes are marketed to adults. Both goods denote two products which are marketed to two
distinct groups of persons, both with similar needs, traits, and wants.
Market segmentation allows for a better allocation of a firm's finite resources. A firm only
possesses a certain amount of resources. Accordingly, it must make choices (and incur the
related costs) in servicing specific groups of consumers. In this way, the diversified tastes of
contemporary Western consumers can be served better. With growing diversity in the tastes of
modern consumers, firms are taking note of the benefit of servicing a multiplicity of new
markets.
Market segmentation can be defined in terms of the STP acronym, meaning Segment, Target
and Position.
Marketing planning
This section may require cleanup to meet Wikipedia's quality standards. No cleanup
reason has been specified. Please help improve this section if you can.

The marketing planning process involves forging a plan for a firm's marketing activities. A
marketing plan can also pertain to a specific product, as well as to an organization's overall
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marketing strategy. Generally speaking, an organization's marketing planning process is derived
from its overall business strategy. Thus, when top management are devising the firm's strategic
direction or mission, the intended marketing activities are incorporated into this plan. There are
several levels of marketing objectives within an organization. The senior management of a firm
would formulate a general business strategy for a firm. However, this general business strategy
would be interpreted and implemented in different contexts throughout the firm.
Marketing strategy
The field of marketing strategy encompasses the strategy involved in the management of a given
product.
A given firm may hold numerous products in the marketplace, spanning numerous and
sometimes wholly unrelated industries. Accordingly, a plan is required in order to effectively
manage such products. Evidently, a company needs to weigh up and ascertain how to utilize its
finite resources. For example, a start-up car manufacturing firm would face little success should
it attempt to rival Toyota, Ford, Nissan, Chevrolet, or any other large global car maker.
Moreover, a product may be reaching the end of its life-cycle. Thus, the issue of divest, or a
ceasing of production, may be made. Each scenario requires a unique marketing strategy. Listed
below are some prominent marketing strategy models.
A marketing strategy differs from a marketing tactic in that a strategy looks at the longer term
view of the products, goods, or services being marketed. A tactic refers to a shorter term view.
Therefore, the mailing of a postcard or sales letter would be a tactic, but a campaign of several
postcards, sales letters, or telephone calls would be a strategy.
Services marketing
Services marketing relates to the marketing of services, as opposed to tangible products. A
service (as opposed to a good) is typically defined as follows:
 The use of it is inseparable from its purchase (i.e., a service is used and consumed
simultaneously)
 It does not possess material form, and thus cannot be touched, seen, heard, tasted, or
smelled.

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  The use of a service is inherently subjective, meaning that several persons experiencing a
service would each experience it uniquely.
For example, a train ride can be deemed a service. If one buys a train ticket, the use of the train
is typically experienced concurrently with the purchase of the ticket. Although the train is a
physical object, one is not paying for the permanent ownership of the tangible components of
the train.
Services (compared with goods) can also be viewed as a spectrum. Not all products are either
pure goods or pure services. An example would be a restaurant, where a waiter's service is
intangible, but the food is tangible.

Self-Check -4,1 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet provided in the next
page:
1. “Define the Marketing?.
2. “. Explain. 4ps of Marketing?
3. discuses marketing environment ?
4. List the step of market segmentation?
5. What is marketing plan?

Note: Satisfactory rating - 3 and 5 points Unsatisfactory - below 3 and 5 points

You can ask you teacher for the copy of the correct answers.

Answer Sheet
Score = ___________

Rating: ____________
Name: _________________________
Date: _______________

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4.2. Operational unit structuring
Operational unit is a subsidiary that engages in business with other parties. That is, an operating
unit has its own assets and liabilities and functions as if it were an independent company; the
only difference is that it is owned by another company. An operating unit is useful for the profit
it can produce. It contrasts with a no operating unit.

The Operational Planning Unit provides services to special event organizers in the community
by assisting in planning, security, staffing deployment, and traffic control for special events. The
Unit:

 provides information on how to apply to hold a special event in the City of Vancouver
 informs the community of procedures and permits that apply to events
 facilitates communication and feedback with the community in regards to special events
planning
 Business operations are first and foremost an oversight function that ensures all internal
operating groups.
 Integrated into the same business plan with well-defined roles and responsibilities, Functioning
together as one unit to ensure operational integrity relative to opportunity development, risk
management, resource management and allocation, and overall best practices;
 Effectively communicating between other functional departments; Participating in the business
planning and development strategy process, Operating within the parameters of an integrated
budget, and; Adhering to all financial practices while following other established policy,
procedures and controls.

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 Self-Check -2 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet provided in the next
page:
1. “Define the Operational unit?
2. Discusses how Effectively communicating between other functional departments

Answer Sheet
Score = ___________

Rating: ____________
Name: _________________________
Date: _______________
Short Answer Questions
1. ________________________________________________________________

________________________________________________________________

________________________________________________________________
2. ________________________________________________________________

________________________________________________________________
________________________________________________________________

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4.3. Monitoring process

 In the three preceding sections, I have argued that if policies and strategies are not
soundly based, it will prove very difficult to implement them successfully. Moreover, if
there is not broad public and political support, it will be very difficult to implement them
successfully, even if the policies themselves are correct. Both these arguments can be
seriously addressed (but of course not totally solved) by a broadly-based participatory
process that clearly defines the roles and contributions expected from all parties
concerned.
Thus formulating, implementing and monitoring forestry policy is a dynamic process - it is
subjected to extraneous and often unpredictable international and intersectional events, as
well as by the local experiences in practice. Policy formulation and forestry sector planning
should not be done only by an isolated cell in the backrooms of the Ministry. Strengthening
national capacity for forestry policy formulation and implementation means more than
technical and planning skills. While such people can certainly contribute analysis into the
process, the real need might be for a capacity to manage the consultative process that
defines and formulates policy (and gathers information and understanding, and indirectly
provides the public support to get it implemented).

Policy research

Many outsiders detect a "disharmony between policy and reality" which those directly
involved may not recognize. Before identifying policy research priorities, do we really want
objective policy research? Are we concerned about?
"What the policies ought to be?"
"What instruments work efficiently?"
"How to implement policy more effectively?"
Can we admit that there are problems and concede that existing polices (and the strategies
that flow from them) are not optimal, but may in fact be the source of some problems. Only
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 the China and Philippines papers concede that there are serious deep-seated institutional and
policy problems - not just minor technical questions or a shortage of funds!

Research can be "applied problem-solving". If we monitor what is happening and decide it is not
good enough, we should seek reasons and explore alternatives - open-minded, exploratory,
nothing taken for granted just because it is the status quo.

Institutional support and reform

Few organizations (anywhere) are prepared to willingly relinquish authority, or to overturn

the status quo even in the face of visible failures. Why should influential Forest Department
bureaucracies, in any country, voluntarily relinquish power, especially over vast areas of
land, even if management is difficult, degradation is occurring, or it has been occupied by
farmers for years?
Again the Philippines, where the foresters are incorporated within DENR (and have lost
much of their autonomy) seem to point a way ahead. Perhaps in other countries, if
governments look critically at the performance of "State Forestry", similar institutional
reforms may be imposed.
Most agencies are in favor of Human Resources Development, although some institutions
retain old or colonial procedures (in staff selection, promotion, training programs) which are
incompatible with modern Western approaches to HRD. Effective policy implementation
cannot be separated from "management for results" and continuous monitoring. This requires
all staff to be performance- and results-oriented, and internal management procedures
must provide an appropriate incentive structure. We have often discussed the difficulties in
attracting high-caliber staff, particularly with multi-disciplinary expertise, when salaries
and/or status are relatively low, yet some Forestry Departments fail to deploy their existing
staff effectively, and to use all the talents and skills these people have, because of
bureaucratic constraints which may be quite unnecessary or counter-productive.

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A project is a series of activities (investments) that aim at solving particular problems within a
given time frame and in a particular location. The investments include time, money, human and
material resources. Before achieving the objectives, a project goes through several stages.
Monitoring should take place at and be integrated into all stages of the project cycle.

The three basic stages include::

 Project planning (situation analysis, problem identification, definition of the goal,

formulating strategies, designing a work plan, and budgeting);
 Project implementation (mobilization, utilization and control of resources and project
operation); and
 Project evaluation.

Monitoring should be executed by all individuals and institutions which have an interest (stake
holders) in the project. To efficiently implement a project, the people planning and
implementing it should plan for all the interrelated stages from the beginning.

The questions become:

Where are we?

Where do we want to go?
How do we get there? And
What happens as we do?

Situation Analysis and Problem Definition:

This asks the question, "Where are we?" (What do we have?).

Situation analysis is a process through which the general characteristics and problems of the
community are identified. It involves the identification and definition of the characteristics and

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problems specific to particular categories of people in the community. These could be people
with disabilities, women, youth, peasants, traders and artisans

The process of implementation

Step 1: Evaluate the strategic plan. The first step in the implementation process is to step back
and make sure that you know what the strategic plan is. Review it carefully, and highlight any
elements of the plan that might be especially challenging. Recognize any parts of the plan that
might be unrealistic or excessive in cost, either of time or money. Highlight these, and be sure to
keep them in mind as you begin implementing the strategic plan. Keep back-up ideas in mind in
case the original plan fails.

Step 2: Create a vision for implementing the strategic plan. This vision might be a series of
goals to be reached, step by step, or an outline of items that need to be completed. Be sure to let
everyone know what the end result should be and why it is important. Establish a clear image of
what the strategic plan is intended to accomplish.

Step 3: Select team members to help you implement the strategic plan. Make sure you have a
team that “has your back,” so to speak, and understands the purpose of the plan and the steps
involved in implementing it. Establish a team leader, if other than yourself, who can encourage
the team and field questions or address problems as they arise.

Step 4: Schedule meetings to discuss progress reports, Present the list of goals or objectives, and
let the strategic planning team know what has been accomplished. Whether the implementation
is on schedule, ahead of schedule, or behind schedule, assess the current schedule regularly to
discuss any changes that need to be made. Establish a rewards system that recognizes success
throughout the process of implementation.

Step 5: Involve the upper management where appropriate. Keep the organization’s executives
informed on what is happening, and provide progress reports on the implementation of the plan.
Letting an organization’s management know about the progress of implementation makes them
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 a part of the process, and, should problems arise, the management will be better able to address
concerns or potential changes.

Self-Check -4.3 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet provided in the next
page:
1. “ define the operational unit?.
2. What is instrument work effectivly?

Note: Satisfactory rating - 1and 2 points Unsatisfactory - below 1 and 2points

You can ask you teacher for the copy of the correct answers.

Answer Sheet
Score = ___________
Name: _________________________
Rating: ____________
Date: _______________
Short Answer Questions
3. ________________________________________________________________

________________________________________________________________

________________________________________________________________
4. ________________________________________________________________

________________________________________________________________

________________________________________________________________

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4.5. Contractual procurement rights

Corporate records and proper management of records are vital to protect the company from a
charge of neglectful record keeping and losing its corporate status. The articles of incorporation
and bylaw forms required by state filings and records retention rules mandate certain record
keeping procedures to be followed. Some of the forms of the company required for compliance
include certificates of incorporation, bylaw forms, corporate minutes, and company resolutions,
all of which should be organized in a corporate record book and/or corporate minute’s book. US
Legal Forms offers the most updated, state-specific corporate documents and corporate records
maintenance packages in Word format to enable the records of an organization to withstand
potential scrutiny or auditing.

Documents to Set up Owner Financing

Owner financing occurs when the owner of a property finances a real estate transaction. Owner
financing is also referred to as owner or seller carry back and is a non-traditional form of real
estate funding. All legal matters in the transaction are negotiated between the buyer and seller.
Each party must review and sign several documents to ensure the transaction is conducted
legally.

 Procurement is the acquisition of goods or services. It is favorable that the

goods/services are appropriate and that they are procured at the best possible cost to meet
the needs of the purchaser in terms of quality and quantity, time, and location.
Corporations and public bodies often define processes intended to promote fair and open
competition for their business while minimizing exposure to fraud and collusion.

Almost all purchasing decisions include factors such as delivery and handling, marginal benefit,
and price fluctuations. Procurement generally involves making buying decisions under

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conditions of scarcity. If good data is available, it is good practice to make use of economic
analysis methods such as cost-benefit analysis or cost-utility analysis.

An important distinction is made between analyses without risk and those with risk. Where risk
is involved, either in the costs or the benefits, the concept of expected value may be employed.

Based on the consumption purposes of the acquired goods and services, procurement activities
are often split into two distinct categories. The first category being direct, production-related
procurement and the second being indirect, non-production-related procurement.

Direct procurement occurs in manufacturing settings only. It encompasses all items that are part
of finished products, such as raw material, components and parts. Direct procurement, which is
the focus in supply chain management, directly affects the production process of manufacturing
firms. In contrast, indirect procurement activities concern “operating resources” that a company
purchases to enable its operations. It comprises a wide variety of goods and services, from
standardized low value items like office supplies and machine lubricants to complex and costly
products and services.

Procurement vs. acquisition

DAU defines acquisition as the conceptualization, initiation, design, development, test,

contracting, production, deployment, Logistics Support (LS), modification, and disposal of
weapons and other systems, supplies, or services (including construction) to satisfy Department
of Defense needs, intended for use in or in support of military missions.[4]

Acquisition is therefore a much wider concept than procurement, covering the whole life cycle
of acquired systems. Multiple acquisition models exist, one of which is provided in the
following section.

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Acquisition process

The revised acquisition process for major systems in industry and defense is shown in the next
figure. The process is defined by a series of phases during which technology is defined and
matured into viable concepts, which are subsequently developed and readied for production,
after which the systems produced are supported in the field.

The process allows for a given system to enter the process at any of the development phases. For
example, a system using unproven technology would enter at the beginning stages of the process
and would proceed through a lengthy period of technology maturation, while a system based on
mature and proven technologies might enter directly into engineering development or,
conceivably, even production. The process itself includes four phases of development.

 Concept and Technology Development: is intended to explore alternative concepts based

on assessments of operational needs, technology readiness, risk, and affordability.
 Concept and Technology Development phase begins with concept exploration. During
this stage, concept studies are undertaken to define alternative concepts and to provide
information about capability and risk that would permit an objective comparison of
competing concepts.
 System Development and Demonstration phase. This phase could be entered directly as a
result of a technological opportunity and urgent user need, as well as having come
through concept and technology development.
 The last and longest phase is the Sustainable and Disposal phase of the program. During
this phase all necessary activities are accomplished to maintain and sustain the system in
the field in the most cost-effective manner possible.

Procurement systems

Another common procurement issue is the timing of purchases. Just-in-time is a system of

timing the purchases of consumables so as to keep inventory costs low. Just-in-time is

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commonly used by Japanese companies but widely adopted by many global manufacturers from
the 1990s onwards. Typically a framework agreement setting terms and price is created between
a supplier and purchaser, and specific orders are then called-off as required.

Shared services

In order to achieve greater economies of scale, an organization’s procurement functions may be

joined into shared services. This combines several small procurement agents into one
centralized procurement system.

Procurement process

Procurement may also involve a bidding process i.e., Tendering. A company may want to
purchase a given product or service. If the cost for that product/service is over the threshold that
has been established (e.g.: Company X policy: "any product/service desired that is over $1,000
requires a bidding process"), depending on policy or legal requirements, Company X is required
to state the product/service desired and make the contract open to the bidding process. Company
X may have ten submitters that state the cost of the product/service they are willing to provide.
Then, Company X will usually select the lowest bidder. If the lowest bidder is deemed
incompetent to provide the desired product/service, Company X will then select the submitter
who has the next best price, and is competent to provide the product/service. In the European
Union there are strict rules on procurement processes that must be followed by public bodies,
with contract value thresholds dictating what processes should be observed (relating to
advertising the contract, the actual process etc.).

Procurement steps

Procurement life cycle in modern businesses usually consists of eight steps:

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 Information gathering: If the potential customer does not already have an established
relationship with sales/ marketing functions of suppliers of needed products and services
(P/S), it is necessary to search for suppliers who can satisfy the requirements.
 Supplier contact: When one or more suitable suppliers have been identified, requests for
quotation, requests for proposals, requests for information or requests for tender may be
advertised, or direct contact may be made with the suppliers.
 Background review: References for product/service quality are consulted, and any
requirements for follow-up services including installation, maintenance, and warranty are
investigated. Samples of the P/S being considered may be examined or trials undertaken.
 Negotiation: Negotiations are undertaken, and price, availability, and customization
possibilities are established. Delivery schedules are negotiated, and a contract to acquire
the product and (P/S) is completed.
 Fulfillment: Supplier preparation, expediting, shipment, delivery, and payment for the
P/S are completed, based on contract terms. Installation and training may also be
included.
 Consumption, maintenance, and disposal: During this phase, the company evaluates
the performance of the P/S and any accompanying service support, as they are consumed.
 Renewal: When the P/S has been consumed or disposed of, the contract expires, or the
product or service is to be re-ordered, company experience with the P/S is reviewed. If
the P/S is to be re-ordered, the company determines whether to consider other suppliers
or to continue with the same supplier.
 Additional Step - Tender Notification: Some institutions choose to use a notification
service in order to raise the competition for the chosen opportunity. These systems can
either be direct from their e-tendering software, or as a re-packaged notification from an
external notification company.

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 Self-Check -4.6 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet provided in the next
page:
1. “Define the procurement?.
2. Discuses acquisition & processes of procurement
3. List step of procurement?

Note: Satisfactory rating - 2and 3points Unsatisfactory - below 2 and 3 points

You can ask you teacher for the copy of the correct answers.

Answer Sheet
Score = ___________
Name: _________________________
Rating: ____________
Date: _______________
Short Answer Questions
1________________________________________________________________

________________________________________________________________

________________________________________________________________
2________________________________________________________________

________________________________________________________________

________________________________________________________________

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4.6. Options for leasing/ownership of business premises

A business lease is a legally binding contract between the legal owner (Landlord) and the
occupier (Tenant). Failure by either party to comply with the terms of the agreement could result
in court action. The 2007 Code for Leasing Business Premises (‘the Lease Code’) provides a
framework within which a Prospective tenant can reasonably expect a landlord to operate. As a
prospective tenant, you should not assume
That a landlord complies with the Lease Code. The Lease Code does provide all of the
protection you need for your business in leasing premises.

Sometimes the Landlord is also the tenant of another owner. This may restrict the flexibility of
terms the Landlord Can offer. The Landlord should always state in advance if this is so and
provide a copy of the current lease.

If it is proposed to buy an existing lease (assignment) from someone else, be aware that, though
parts of this Occupier Guide may help in interpreting some of the terms of the lease, there may
be many additional liabilities.
Professional advice from a qualified surveyor and a lawyer should be sought. In this document
the following terms have been used:
Landlord
This is the owner of the property or the person owning an existing lease of the property Tenant
this is the occupier of the property or the person paying rent to landlord
Heads of Terms
This is a summary of the agreement between the parties and is used to instruct lawyers produce
the formal lease. Both the lease and the Heads of Terms should comply with the
recommendations of the Lease Code but the Heads of Terms will be superseded once the lease
has been granted.

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You might think this is a no brainer…but the reality is many tenants execute a lease only to later
find out that they cannot use the premises for their intended purpose. From the landlord's
perspective, it is best to keep this clause general and vague. From the tenant's perspective, it is
sometimes best to specifically set forth the tenant's intended use(s) for the premises, and
restrictions (if any); while other times it is best to use the broadest definition to facilitate
subleasing.

Regardless of which method is used, the tenant should insist that the Landlord provide written
assurances in the lease that the Premises are zoned appropriately for the tenant's intended
business purpose.

An Exclusive Use Clause, which typically must be requested by a tenant, is a clause in a lease
under which the landlord promises that no other tenant will be permitted to either engage in a
particular type of business or sell a particular line of goods. These types of clauses are most
often negotiated in strip malls.

Lease Term

This clause describes the length of your lease and specifies the starting and ending dates.
Exercise caution and pay attention as there are two traps here for the unwary. First, some leases
start as of the date the lease is signed, while others will start when the landlord is prepared to
turn over possession of the premises to the tenant. Avoid a lease term that starts on the date the
lease is signed, but does not require the payment of rent until a later date. Why? Because even
though the tenant may not be required to pay rent, the tenant will still be responsible for other
liabilities such as insurance, the requirement that the tenant rebuild in the event of fire,
earthquake, or other damage, etc...

The second trap is more an assumption made by many eager tenants that a longer lease term is
better. While this may be true for an established savvy businessman, it is often not the case for a
new business owner. A $2,000 per month lease for five years equates to a $120,000

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commitment, which is usually accompanied by a personal guarantee executed by the owner of a
business (tenant). For a new business owner who may strongly believe his or her business will
succeed, we suggest a short one to two year lease term with multiple options to renew for three
years each. The option period costs nothing, and in the event the business does not succeed or
would do better in a different location, the shorter two year lease term will limit the potential
liability

A tenant should also insist that the tenant be given the right to audit the landlord’s books and
records concerning operating expenses

Self-Check 4,6 Written Test

Instruction: give short answer for the following questions

1. What is A business lease?
2. What are the two types of market researches Answer Sheet

Score = ___________
Rating: ____________

Name: _________________________ Date: _______________

Short Answer Questions

1________________________________________________________________

________________________________________________________________

________________________________________________________________

2.__________________________________________________________

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Basic Account Work L-II

Learning guide # 5
 Unit of Competence: Develop Business Practice
 Module Title: Developing Business Practice
 LG Code: EIS BAW2 M013 LO5
 TTLM Code: EIS BAW2 TTLM 130919

LO5: Review implementation process

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Instruction Sheet Learning Guide #5

This learning guide is developed to provide you the necessary information regarding the
following content coverage and topics:

 Develop and implement business operation review

 Identification of business operation management
 Implementation and monitoring of business operation improvement
 Concept of entrepreneurship
 Problem-solving mechanisms and approaches
 Communication skills and report
 Computers and software packages manipulation
This guide will also assist you to attain the learning outcome stated in the cover page.
Specifically, upon completion of this Learning Guide, you will be able to –
 Develop and implement business operation review
 Identify business operation management and improvements of business operation
 Identify improvements of business operation and monitoring
Learning Instructions:

1. Read the specific objectives of this Learning Guide.

2. Follow the instructions described below.

3. Read the information written in the “Information Sheets”. Try to understand what are
being discussed. Ask you teacher for assistance if you have hard time understanding them.
4. Accomplish the “Self-check” 5,1“Self-check 5.2“Self-check “5.3Self-check “Self-check
in page __. 107,,109,,115
5. Ask from your teacher the key to correction (key answers) or you can request your teacher
to correct your work. (You are to get the key answer only after you finished answering the
Self-check
6. Submit your accomplished Self-check. This will form part of your training portfolio.
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Information Sheet Review implementation process

Introduction
A given cleaning worker should understand the type of waste that will be cleaned, understand
work procedures and instruction, nature of cleaning chemicals and all side effects of waste
including allergies. Effective cleaner understand pre cleaning activities and identify all
necessary equipment and materials to keep the safety of the worker and undertake proper
removing of wastes.

5.1. Developing review process

The purpose of developing and implementing operations review in business is to create a culture
of openness and trust, to share a common understanding of the issues confronting management
and staff, and to debate the opportunity for improvements, and to examine the way in which a
company or department works to see how it can be made more efficient and profitable.
It is a learning opportunity, vital to the health of a learning organization. An operations review
is designed to surface issues so that management and executives can do their jobs and help to
remove obstacles before they impact the financial performance of the business. An operations
review is not simply a forum for delivering good news. Issues should be surfaced not concealed,
disguised, or shrouded in a sea of meaningless data. The operations review is not intended as a
control mechanism. Daily feedback based on production metrics should be used for control.
Operations review is about learning, building trust with value-chain partners, and teaching
senior executives about the business.

In addition, all business owners upstream and downstream in the same value chain should be
invited. When a business needs to work and negotiate with partners in a value chain, those
partners need to understand the issues and learn to trust each other. Unilateral openness is
required to kick start the process of system improvement. The trust built through openness is an
emergent property of lean systems

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An operations review will visually present the information that the business needs to operate
successfully. The difference between data and information is the difference between the inputs
needed to derive an answer versus the actual answer Information is the answer to a question.
Management information is the answer to a question about the health and running of a business.
Management information answers questions executives need answered in order to make
informed decisions about investmenting and operation of a business that must be run for profits
now and in the future.

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 Self-Check -5.1 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet provided in the next
page:
1. “Discuses purpose of developing and implementing operations

Note: Satisfactory rating - and points Unsatisfactory - below and points

You can ask you teacher for the copy of the correct answers.

Answer Sheet
Name: _________________________
Score = ___________
Date: _______________
Rating: ____________

Short Answer Questions

1________________________________________________________________

________________________________________________________________

________________________________________________________________
2________________________________________________________________

________________________________________________________________

________________________________________________________________

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5.1 Identifying improvements in business operation

Operations management is an area of management concerned with overseeing, designing,

controlling the process of production and redesigning business operations in the production of
goods and/or services. It involves the responsibility of ensuring that business operations are
efficient in terms of using as few resources as needed, and effective in terms of meeting
customer requirements. It is concerned with managing the process that converts inputs (in the
forms of materials, labor, and energy) into outputs (in the form of goods and/or services). The
relationship of operations management to senior management in commercial contexts can be
compared to the relationship of line officers to highest-level senior officers in military science.
The highest-level officers shape the strategy and revise it over time, while the line officers make
tactical decisions in support of carrying out the strategy. In business as in military affairs, the
boundaries between levels are not always distinct; tactical information dynamically informs
strategy, and individual people often move between roles over time.

Operations management is the field concerned with managing and directing the physical and/or
technical functions of a firm or organization, particularly those relating to development,
production, and manufacturing. Operations management programs typically include instruction
in principles of general management, manufacturing and production systems, plant
management, equipment maintenance management, production control, industrial labor relations
and skilled trades supervision, strategic manufacturing policy, systems analysis, productivity
analysis and cost control, and materials planning.

For the above reasons, a given business should identify and in corporate business operational
management to strengthen its productivity of good /or services as it helps to be responsible for
the day-to-day running of the company and administrative issues. To help in projects co-
ordination, logistics, headhunting, procurement of resource and management.

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 Self-Check -5.2 Written Test

Directions: Answer all the questions listed below. Use the Answer sheet provided in the next
page:
1. “ define Operations management ?

Note: Satisfactory rating - and points Unsatisfactory - below and points

You can ask you teacher for the copy of the correct answers.

Answer Sheet
Name: _________________________
Score = ___________
Date: _______________
Rating: ____________

Short Answer Questions

1________________________________________________________________

________________________________________________________________

________________________________________________________________
2________________________________________________________________

________________________________________________________________

________________________________________________________________

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 5.3. Implementing and monitoring of improvements

Most resistance to business operation improvement comes from within an organization.

Managers often do not wish to change existing structures. The labor force may resist
business operation improvement because of fears of layoffs; however, an organization
using Business operation improvement on a regular basis, argue many proponents, will
already have the proper work force to meet existing business challenges.

Some organizations have implemented Business operation improvement on a smaller

scale and reported success, by doing the following:

 Start with a small process that can be completed in a short time frame.
 Set clear timelines.
 Do not spread resources thinly and focus on the short term payoff.
 Management and primary stakeholders must be involved, or else even a limited
implementation will fail.

Best practice

Improving business operations through best practice

Most businesses have some operational issues that can be improved through the
introduction of best practice methods, including:

 quality management
 stock control, delivery and supply chain management
 purchasing and ordering
 information management

You can identify which operational areas will benefit from best practice methods by:
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  benchmarking
 internal analysis
 reviewing appropriate national and international standard

Executives should improve their business operations through reductions in working

capital and improvements to cash flow, control and optimization of costs, and
management of risk in their operations.  Drive performance of the supply chain through
operations process improvements, strategic sourcing strategies, inventory management,
contract management and enhancements to working capital.

Business operation Monitoring (BoM)

 Business operation Monitoring is a key component of the Business Operations

Platform. High performing business processes are crucial for the success of a
business. Only with tight control and real-time monitoring of every crucial
business activity and all processes, are companies able to act fast on business
opportunities. Business Activity Monitoring allows you to respond quickly to
process or activity inefficiencies, to ensure that business processes run smoothly,
and guarantee that critical business services are available
 Concept of entrepreneurship

Entrepreneurship is the act of being an entrepreneur or "one who undertakes

innovations (not only innovations but all kind of activity!!!), finance and business acumen
in an effort to transform innovations (not only innovations but all kind of activity!!!)into
economic goods". This may result in new organizations or may be part of revitalizing
mature organizations in response to a perceived opportunity. The most obvious form of
entrepreneurship is that of starting new businesses (referred as Startup Company);
however, in recent years, the term has been extended to include social and political forms
of entrepreneurial activity. When entrepreneurship is describing activities within a firm or

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large organization it is referred to as intra-preneurship and may include corporate
venturing, when large entities spin-off organizations.

Entrepreneurial activities are substantially different depending on the type of organization

and creativity involved. Entrepreneurship ranges in scale from solo projects (even
involving the entrepreneur only part-time) to major undertakings creating many job
opportunities. Many "high value" entrepreneurial ventures seek venture capital or angel
funding (seed money) in order to raise capital to build the business. Angel investors
generally seek annualized returns of 20-30% and more, as well as extensive involvement
in the business. Many kinds of organizations now exist to support would-be entrepreneurs
including specialized government agencies, business incubators, science parks, and some
NGOs. In more recent times, the term entrepreneurship has been extended to include
elements not related necessarily to business formation activity such as conceptualizations
of entrepreneurship as a specific mindset (see also entrepreneurial mindset) resulting in
entrepreneurial initiatives e.g. in the form of social entrepreneurship, political
entrepreneurship, or knowledge entrepreneurship have emerged.

It has assumed super importance for accelerating economic growth both in developed and
developing countries. It promotes capital formation and creates wealth in country. It is
hope and dreams of millions of individuals around the world. It reduces unemployment
and poverty and it is a pathway to prosper. Entrepreneurship is the process of exploring
the opportunities in the market place and arranging resources required to exploit these
opportunities for long term gain. It is the process of planning, organizing, opportunities
and assuming. Thus it is a risk of business enterprise. It may be distinguished as an ability
to take risk independently to make utmost earnings in the market. It is a creative and
innovative skill and adapting response to environment.
Some Entrepreneurial Skills:
The following skills are important if the entrepreneur’s business is to succeed.

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Ability to Plan: The ability to plan is a key skill for entrepreneurs.
They must be able to develop plans to meet goals in a variety of areas, including finance,
marketing, production, sales and personnel (hiring and maintaining productive and
satisfied employees).
Communication Skills: Entrepreneurs should be able to explain, discuss, sell and
market their good or service. It is important to be able to interact effectively with your
business team. Additionally, entrepreneurs need to be able to express themselves clearly
both verbally and in writing. They also should have strong reading comprehension skills
to understand contracts and other forms of written business communication.
Marketing Skills: A business’s success or failure is very dependent on whether the
business reaches the market (its potential customers), interests the market and results in
those in the market deciding to buy. Many entrepreneurs who failed started with an
innovative good or service that with proper marketing could have been very successful.
Good marketing
Skills that result in people wanting to buy your good or service are critical for
entrepreneurial success
interpersonal Skills: Entrepreneurs constantly interact with people, including customers
and clients, employees, financial lenders, investors, lawyers and accountants, to name a
few. The ability to establish and maintain positive relationships is crucial to the success
of the entrepreneur’s business venture.
Basic Management Skills: The entrepreneur must be able to manage every component
of a business. Even if entrepreneurs hire managers to attend to daily details, they must
understand if their business has the right resources and if those resources are being used
effectively. They must ensure that all the positions in their business are occupied by
effective people.
Personal Effectiveness: In order to handle the pressures of their busy lifestyles,
entrepreneurs must have the ability to manage time well and to take care of personal

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business efficiently. Because first impressions are so important, entrepreneurs must also
pay attention to such things as personal appearance and telephone skills.
Team Building Skills: Because entrepreneurs usually assemble a team of skilled people
who help them achieve business success, they must be able to effectively develop and
manage the team.
Leadership Skills: One of the most important leadership skills an entrepreneur must
have is the ability to develop a vision for the company and to inspire the company
employees to pursue that vision as a team. The expression “people would rather be led
than managed” applies especially well to an entrepreneurial venture. Few entrepreneurs
possess every skill needed to ensure business success.

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 5.3 Self check exercise Written test

Instruction I: True or false

1. Implementing operation review can create a culture of openness and trust in business
2. Operational management is an area of management that deals with designing and
controlling of production
3. Entrepreneurship is investing a huge amount of money without being innovative
4. Communication skill is one of the important skills in Entrepreneurship
5. Problem solving is a mental process to solve defined problems

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Answer Sheet Score = ___________
Rating: ____________

Name: _________________________ Date: _______________

Part one: true or false

1_________
2_________
3.________
4.________

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Self-Check Answer Learning guide#1

Instruction: give short answer for the following questions

1. What do you mean by E-commerce?
 It is a term for any type of business, or commercial transaction that
involves the transfer of information across the Internet.

2. What is business operation?

 It is the ongoing recurring (cyclic) activities involved in the running
of a business for the purpose of producing value for the stakeholders.
3. What are the six steps of perceived risks in business opportunity?
o functional

o Physical

o Social
o Psychological
o Financial
o Time

4. Write at least four factors that affect business opportunity.

 Focus on your core product

 Keep your business area simple
 Stay true to who you are
 Map it
 Utilize marketing tools that work best for you
 Implement a plan of action
 Exercise the plan
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Self check answer Learning guide#2

1. Factors needed for choosing an appropriate source of finance are:

 The amount of money  The duration of finance
needed  The gearing ratio of
 The urgency of funds the business
 The cost of the source  The control of the
of finance business
 The risk involved
2. Source of finance can be classified as internal and external, short-term and long-
term or equity and debt.
 Internal source:
 Personal savings  Working capital
 Retained profits  Sale of fixed assets
 External source:
 Ownership capital or
 Non-ownership capital
 Current assets
 Current liabilities

3. Skills used for efficient management are:

 Planning skills  Financial management
 Communicationskills skills
 Organizing skills  Logistics
 Dealing with legal issues
 Ethical business practices
4. Essential steps for performing risk assessment are:
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 o Identify relevant business objectives
o Identify events that could affect the achievement of objectives
o Determine risk tolerance.
o Assess inherent likelihood and impact of risks
o Evaluate the portfolio of risks and determine risk responses.
o Assess residual likelihood and impact of risks.

Self check answer Learning guide#3

1. The pricipal forms of business organization are:

 Sole proprietorship (SP),
 General partnership (GP),
 Limited partnership (LP),
 Limited liability partnership (LLP),
 C corporation (CC),
 S corporation (SC),
 Limited liability company (LLC) and
Cooperative corporations (co-op).

2. The five types of business structure are:
 Sole Proprietor
 Partnership
 Sub S Corporation
 C Corporation
 Limited Liability Company (LLC, PLLC)

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3. The importance of a organizational structure are:
 Chain of Command

 Span of Control

 Departmentalization

 Distribution of Authority

 Organization Height

4.The business operation rule is:

 Supply chain operations

 Procurement

 Manufacturing

Learning Guide for Basic Accounting Works Level II Author- College of Management and Public Service
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Self check answer Learning guide#4

1. What is marketing?
 Marketing is the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings
that have value for customers, clients, partners, and society at
large.

2. What are the two types of market researches?

 Primary research (field research)
 Secondary research (desk research)

3. What are the eight steps of procurement?

 Information gathering
 Supplier contact
 Background review
 Negotiation
 Fulfillment
 Consumption, maintenance, and disposal
 Renewal
 Tender Notification

4. What is procurement?
 Procurement is the acquisition of goods or services in a business
opportunity.

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Answer Sheet Score = ___________
Rating: ____________

Name: _________________________ Date: _______________

Part one: true or false

1_________
2_________
3.________
4.________

Learning Guide for Basic Accounting Works Level II Author- College of Management and Public Service
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Self check answer learning duide #5

1. True
2. True
3. False
4. True
5. True

Learning Guide for Basic Accounting Works Level II Author- College of Management and Public Service
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