Elements and Performance Criteria

RANGE STATEMENT
The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.
Costs may include:
direct/indirect costs
fixed, variable, semi-variable costs
overheads and employee costs
Pricing strategies may include:
competitor analysis
cost/volume/profit analysis
cost factors
cost plus pricing
demand-based pricing
discounting
market conditions
penetration pricing
perceived value
product mix
skimming
Financial plan may include:
analysis of sales by product/service, identifying where they were sold and to whom
cash flow estimates for each forward period
current financial state of the enterprise (or owner/operator)
estimates of profit and loss projections for each forward period
financial performance to date (if applicable)
likely return on investment
monthly, quarterly or annual returns
non-recurrent assets calculations
profit, turnover, capital and equity targets
projected profit targets, pricing strategies, margins
projections of likely financial results (budgeting)
projections, which may vary depending on the importance of such information and the stage in the life of the business
resources required to implement the proposed marketing and production strategies (staff, materials, plant and equipment)
review of financial inputs required (sources and forms of finance)
risks and measures to manage or minimise risks
working, fixed, debt and equity capital
working in conjunction with external consultants e.g. investment analysts, accountants, financiers
Profit targets/goals may include:
break-even point
cost of goods/services sold
gross profit/net profit
desired actual/notional salary for owners/managers
desired return on investment
sales turnover/gross fees or income
Cash flow projections may include:
anticipated payments
anticipated receipts
customer credit policy/debt recovery
taxation provisions
Legal requirements may include:
contractual arrangements (partnership agreements, trust deeds)
corporations law
industrial law (for payroll records)
taxation law
Sources of finance may include:
personal, financial institutions, trade/industry sources
government sources, for example commonwealth and state/territory governments which provide various forms of technical and financial assistance including direct cash grants, loans, subsidies, tax concessions, and professional and technical advice
Financial backers may include:
financiers/banks/lending institutions
leasing and hire purchase financiers
providers of venture capital
shareholders/partners/owners/family/friends

EVIDENCE GUIDE
The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit
Evidence of the following is essential:
development of a financial plan which identifies the financial requirements of the business, including profit targets, cash flow projections and strategies for the acquisition of finance
knowledge of financial decision making relevant to the business.
Context of and specific resources for assessment
Assessment must ensure:
access to relevant documentation
candidate's individual circumstances and work in the context of establishing or running a small business, are the basis for assessment.
Method of assessment
A range of assessment methods should be used to assess practical skills and knowledge. The following examples are appropriate for this unit:
portfolio of evidence including financial plan and records
review of projected profit statement prepared to supplement the business plan
review of cash flow projections
oral or written questioning to asses knowledge of principles for preparation of cash flow forecasts.
Guidance information for assessment
Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended, for example:
BSBSMB401A Establish legal and risk management requirements of small business
BSBSMB404A Undertake small business planning
BSBSMB405A Monitor and manage small business operations
BSBSMB406A Manage small business finances.