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Purpose of the Business Planning Process

ASSESSMENT

TASK 1

Instructions to students:

1. Identify and describe five common components of a business plan.

2. Discuss the purpose of the business planning process.

3. Discuss three areas that a business planning process may address. 

4. Discuss key steps in developing a business plan. 

5. Outline key stakeholders who may be involved in business planning.

6. Discuss the purpose of a business vision. 

7. Discuss the purpose of a SWOT analysis in a business planning process.

8. Discuss why it is important for a business to use a range of performance measures.

9.Outline three performance measures that could be used to measure customer satisfaction. 

10. Discuss the balanced scorecard approach in relation to performance measurement. 

11. Explain the SMART criteria for objectives.

12. What is the purpose and benefit of using key performance indicators in the business planning process

Task 2

INSTRUCTIONS:

case Study

Ozhouse Clean is based in Melbourne and offers professional, residential cleaning services, including regular home cleans, as well as spring cleans. The company is a family business established in 2005 by James and Nancy Anderson. James and Nancy are the Directors of the company. Their daughter, Sarah is employed by the company in the role of Administration Manager; and you have been employed in the role  of Operations Manager.

The company sees its point of difference from competitors as being a small family business with a focus   on quality and happy and content staff and customers. The management team understands this point of difference may need to change as the business grows. There may a need for more management staff to  be employed, for example, while Sarah manages marketing, she is not skilled in this area and is very busy with the administration side of the business. A skilled marketing officer may be needed.

Currently target customers are located in the greater Melbourne area. Target customers are people who want a professional, trustworthy and immaculate cleaning service. Pricing reflects that of competitors. 

The company employs 15 cleaners, all of whom are part-time contract staff working between 10 – 15 hours a week. The company currently has approximately 70 regular clients, based around Melbourne's inner city. These clients require regular home cleaning, either weekly or fortnightly for hours ranging from 3 – 6 hours. A standard hourly rate of $40 per hour is charged. Staff receive an hourly rate of $25 per hour with the cost of the products provided to staff for cleaning, including equipment and ongoing supplies,  works out to be approximately $2 per hour on top. The company is also considering whether it may be  wiser to move to employing a number of full-time, permanent cleaning staff. This is partly because there is  a high turnover of casual staff and little loyalty to the company. Staff costs for employing full-time cleaners are $55,000 per cleaner per year including all superannuation payments.  

Areas Addressed by a Business Planning Process

All cleaning supplies are currently purchased from Total Cleaning Supplies in Melbourne. However, as this company does not currently offer environmentally friendly products, a different supplier needs to be identified. It is estimated that purchase of these products will be an additional $10,000 per month. The products cost double the amount of the non-environmentally friendly products. 

Sales revenue for the company for the financial year ending 2016 is $360,000 with a gross profit margin of

$40,000. Labour costs are a significant part of the business representing 70% of total costs. Average debtor days are currently 40 days. 

Currently, marketing is via a website but a large proportion of the company’s work comes through word- of-mouth from existing customers. Social media is not currently used to market the business. The new business plan will need to reflect different ways of marketing, especially to attract commercial customers. 

At a recent meeting of the management team (the Directors, Operations Manager and Administration Manager), it was decided that a 3-year business plan is needed to ensure the company meets its business goals. For the 2016 – 2018 years, this will be to diversify into the commercial cleaning market and to offer environmentally  friendly  cleaning services. Down  the track, the company is also considering offering carpet cleaning services. The Operations Manager has been given the responsibility of developing the business plan.  

The Directors and two senior managers met recently to develop and document the company’s mission, vision, values and objectives as follows:

Mission

Ozhouse Clean is committed to providing the highest quality residential and commercial cleaning services available by exceeding the expectations of our clients.

Vision

We are constantly working to establish ourselves as the most respected and sought after contract cleaning and facilities support service in Melbourne. 

Values

Respect: taking time to understand and value each person and respecting their choices.

Responsibility: acting with integrity towards our staff, our customers, the community and the environment. Caring: a duty of care for our staff, customers and the environment.

Excellence: to always look to provide the best quality experience with regards to our cleaning and our customer service.

Integrity: to act with honesty, openness and do what we say we will do. Innovation: to be industry leaders.

Objectives

Our key objectives which are fundamental to our business in delivering world-class cleaning and customer service, are as follows:

  • Provide our customers with a professional and friendly
  • To increase the number of clients by 20% in the first year of introducing commercial cleaning services and 10%
  • Meet or exceed the expectations of
  • Implement best practice in cleaning operations, including environmentally sustainable practices.

Complete the following activities based on the case study above. 

  1. Review and evaluate information and research in preparation to develop business

Key Steps in Developing a Business Plan

Review the case study and the business plan template provided to you before you start. Ensure you understand the business vision, mission, values and objectives so that they are reflected in the business plan.

Conduct research to inform the development of the business plan including: 

  • Identifying and analysing trends in demand for cleaning services, nationally as well as in the local Melbourne
  • Identifying competitors in the market for Ozhouse Clean. Include information for at least three competitors, providing a summary of their services, as well as an explanation of how their services compete with Ozhouse Clean and any points of difference that will enable Ozhouse Clean to stand
  • Identifying and analysing target consumer needs for specific types of cleaning services eg environmentally friendly cleaning services. This may be through identifying secondary sources of data or through a review of social media, for
  • Identifying strengths, weakness, threats and opportunities (SWOT analysis) based on the scenario information and
  • Identifying and evaluating alternative pricing strategies to the current pricing strategies (as per the scenario information).
  • Identify potential marketing strategies for existing residential services, as well as commercial and environmentally friendly cleaning services. This may be through reviewing how competitors market their services, as well as identifying effective marketing
  • Identifying any permits or licences that are required for commercial cleaning and environmentally friendly cleaning
  • Identifying suppliers of environmentally friendly cleaning products that can provide Ozhouse Clean with products. Identify at least three options, including the supplier contact details and summary of products
  • Identifying key activities and required financial, physical and human resources requirements based on analysis conducted (this will be documented in the action plan in the business plan). Note that you must ensure that your action plan clearly shows how a skilled workforce will be in place to ensure that the plan can be

– Identifying key performance indicators that can be used to assess both the financial and non- financial performance of the business.

Type your research findings into a word processed document, ensuring that the information has headings and is separated into the bullet points above. There is no requirement for your document to be formatted in a particular way. Submit your document to your assessor before commencing your business plan.  

  1. Develop the business

Using your research findings and the scenario information, develop the business plan using the template that has been provided.

  • A review outline and evaluation of the OzHouse Cleaning's strategic goals, vision, mission, values and
  • The actions that you include in the business plan should show how the strategic objectives of the company will be achieved, and what resources will be
  • As additional staff will be required to manage the expansion into contract cleaning and environmentally friendly cleaning services, the actions included in the business plan should show how this will be achieved in terms of identifying staff needed, recruiting the required staff, as well as inducting staff. Clear timelines must be provided.
  • Each of the actions should include clear performance

Your business plan must be written in clear and concise English, be grammatically correct and free from errors. Submit your completed plan to the management team (your assessor) with a memo attached advising that you wish to meet to discuss and seek feedback on the business plan.  

  1. Present business plan to the rest of the management team. At the meeting to discuss your plan, you must:
    • Explain the purpose of a business plan and its
    • Introduce the plan including how the plan reflects the business’s vision, mission, values and objectives.
    • Provide an overview of the business plan, carefully explaining each
    • Seek feedback on the plan, in particular the actions indicated to achieve the strategic objectives, the performance indicators you are proposing and approval to procure the skilled
    • Provide the information in user-friendly terms, as not all of the management team are familiar with the business planning
    • Listen to the feedback provided by the management team (your assessor).
    • Demonstrate effective communication skills including asking questions to elicit feedback from the management team, responding to questions from the management team and active

Following the meeting, incorporate the feedback received into the business plan and submit the final plan to the management team (your assessor).  

Task 3

INSTRUCTIONS:

It is one year since the business plan was implemented and as the Operations Manager, you are reviewing the performance of the business against the performance indicators identified in the plan, testing performance indicators used and recommending changes to performance indicators as provided.

You have also been asked to provide an overall evaluation of the strengths and weaknesses of the business plan to date (this will be the business plan you developed for Assessment Task 2). 

Assume that the performance indicators identified in the business plan are as follows:

  • A 20% increase in total sales
  • A gross profit margin of 20%.
  • Reduction of 50% in debtor days
  • 10 new commercial customers in the first year of the business
  • Reduction of 10% of workforce turnover based on employing two full-time permanent cleaners, as well as increasing wages to above
  • Data provided by the accountant for this financial year show the following figures:
    • Total sales revenue - $450,000
    • Total cost of sales - $320,000
    • Debtor days - 30

–      15 new commercial customers  

The Administration Manager has advised you that at least 10 of the previous residential customers no longer use the company’s services, so while sales revenue has increased, the sales revenue attributable to residential sales has declined.

In addition, follow up emails to the customers who no longer used the services indicated the following responses to the question asked about why they no longer use the services:

  • Moved interstate – 1
  • Dissatisfied with the quality of cleaning services provided (not enough attention to detail, cleaner finishing earlier than time paid for) – 5
  • Moved to a competitor as better service and price offered – 4

Regarding staff, two of the current contract cleaners have been appointed as fulltime, permanent employees. 

Wages have been increased to above award for all contract cleaners.

Of the 15 contract cleaners contracted at the start of the year, 4 have left and been replaced by new staff. 

Complete the following activities:  

  1. Develop a monitoring and evaluation

Review the scenario information and develop an outline for your report ensuring that:

  • Your report will address a balance of both financial and non-financial information on business performance as per the scenario
  • To assist in making the information as user friendly as possible, your report should include visual information to show how the business has performed such as graphs or
  • Ensure you provide your report according to the timelines set by your assessor to show that you can provide timely reports. Completing work on time is part of the assessment

Ensure your report addresses:

  • An overview of business performance based on the data provided for this year, as well as the data provided for the previous year (as documented in the case study in Assessment Task 1).
  • An analysis of business performance to determine if the performance indicators have been achieved.
  • An evaluation of the non-financial information gained from the survey, impact on the business and variations that could be made to the business plan based on this
  • A review of additional performance measures that can be used to measure customer retention and customer satisfaction based on the decrease in residential customers as advised in the case study. You will need to research the range of performance measures that could be used and  report on performance indicators that you consider to be suitable. Your report should include a clear explanation of the performance indicators and your rationale for utilising these  
  • An evaluation of the strengths and weaknesses of your developed business plan and at least two recommended improvements. Research other plans to help you with the
  • Provide a summary of recommendations for the upcoming year based on your evaluation as above, as well as required changes to the business

Your report must be formatted in a professional report format that includes heading to separate and identify the information. Ensure it is written in clear and concise language suitable for the audience (your assessor), is grammatically correct and error free. Submit the report to your assessor.  

Task 4

INSTRUCTIONS:

A review of the business’s performance against the performance indicators in the plan identified that a number of residential customers no longer use the services due to a of lack of satisfaction with the quality of the service provided, specifically the level of cleanliness and attention to detail. 

As the Operations Manager, you decide to set up a meeting with each of the contractors to investigate    the situation and to provide coaching on the expected level of performance. For this assessment task you only need to meet with one of the cleaners.

Ozhouse Clean has the following expected level of performance in relation to cleaning services:

  • All surfaces, including floors, bench tops and shelves cleaned so that they are free of dust and
  • Rubbish bins emptied and
  • Shower screens and mirrors cleaned and free of soap build up and
  • Only cleaning products provided are
  • All cleaning services must be provided in the allocated

These performance standards are included in each person’s contract.

Assume that the contract cleaner (role played by your assessor) has been invited to the meeting.

Complete the following activities:

  1. Conduct meeting and coaching

Conduct the meeting at the specified time on the specified date with the contract cleaner (role played by your assessor). This meeting should be treated as a coaching session as well as to try and get the staff member to understand the issues and meet the required performance standards.

At the meeting you must: 

  • Explain the purpose of the meeting
  • Explain to the contract cleaner what the problem is
  • Discuss the level of performance expected by the company
  • Demonstrate your interpersonal and communication skills by: keeping your communication clear and simple, asking questions to identify reasons for underperformance and to confirm information provided and listening to the contract cleaner and confirming and clarifying information shared
  • Discuss and agree on a solution

Prepare and submit a follow up report (in the format or a memo or email) to the contract cleaner (your assessor) within 1 day of the meeting summarising the meeting and the solution agreed to.

  1. Develop report on actions and solutions for management

The final part of this assessment requires to you to send a brief report to the management team explaining the issues and the solutions you have identified. 

  • You are also required to identify at least two changes you consider should be made to the business systems/process or to the business plan as applicable.

Purpose of the Business Planning Process

Task 1

1. A well-thought-out business plan lets others know how the man who made the plan is serious, and that you can handle all that running a business entails. It can also give you a solid roadmap to help you navigate the tricky waters. The seven components a person must have in the business plan include:

Executive Summary

Business Description

Market Analysis

Organization Management

Sales Strategies

Funding Requirements

Financial Projections

All of these elements can help a person to build his business, in addition to showing lenders and potential backers that you have a clear idea of what he is doing.

2. Strategic planning is a systematic process that helps a eperson set an ambition for his business' future and to determine how best to achieve it. Its primary purpose is to connect three key areas which are:

  • mission - defining the business' purpose
  • vision - describing what a person wants to achieve
  • plan - outlining how a person want to achieve his ultimate goals 

Strategic planning is different to business planning. It requires stepping back from t day-to-day operations and articulating where the business is heading, by setting long-term goals, objectives and priorities for the future.

3. Key elements that should be included in a business plan are:

  1. Business concept.Describes the business, its product and the market it will serve. It should point out just exactly what will be sold, to whom and why the business will hold a competitive advantage.
  2. Financial features.Highlights the important financial points of the business including sales, profits, cash flows and return on investment.
  3. Financial requirements.Clearly states the capital needed to start the business and to expand. It should detail how the capital will be used, and the equity, if any, that will be provided for funding. If the loan for initial capital will be based on security instead of equity, you should also specify the source of collateral.
  4. Current business position.Furnishes relevant information about the company, its legal form of operation, when it was formed, the principal owners and key personnel.
  5. Major achievements.Details any developments within the company that are essential to the success of the business. Major achievements include items like patents, prototypes, location of a facility, any crucial contracts that need to be in place for product development, or results from any test marketing that has been conducted.

4. Research the Industry

Understand the industry in which you plan to operate, researching historic performance and growth forecasts. The Timmons model of opportunity recognition, a popular technique for evaluating an industry, can help you assess market demand, market size and margin analysis (Bryman and Bell 2015).

Analyze the Market

Define your target market. Use demographic and psychographic information to better understand what your customers want, how they want to receive it and how you can best reach them. This information will help you improve your offering, and it forms the foundation for your marketing plan (Bryman and Bell 2015).

Size Up Your Competitors

Determine your direct and indirect competitors and consider how your product or service compares to theirs. Note key attributes and success factors, evaluating your business against the competition, and then identify your competitive advantage or develop one using the information obtained in the competitor analysis.

Design Your Company

Choose your company's name, location and business model. Determine how you will sell your product or service to your customer and how you will protect your competitive advantage. If you plan on securing a patent, apply for one early because the process can take more than a year.

Create a Marketing Strategy

Develop a plan for reaching your target customer. It should contain information on advertising channels, distribution avenues, pricing and product attributes. Include a sales forecast that will provide the foundation for your business' financial plan.

Areas Addressed by a Business Planning Process

Plan Your Operations

Determine how you will manufacture or deliver your product or service. Decide where to locate your business and anticipate how your operations will change as demand grows. Decide how ownership will be distributed and how investors and employees will be compensated. Begin to build your team.

Determine Your Financial Needs

Calculate how much must be invested to start your business. You will need to fund operations until the business can sustain itself. Keep in mind that actual sales are usually lower, and expenses higher, than forecast. Decide which, if any, outside sources of funding your business will utilize, and draft a plan for securing those funds.

5. The strategic plan impacts many, both outside as well as inside the organization. To varying degrees these relationships must be recognized during various planning phases, including the communication of the plan. Some of the possible stakeholders are:

  • End Consumers
  • household
  • demographic segments
  • psychographic segments
  • purchasing behavior segments
  • commercial & industrial
  • product use
  • alternative products
  • purchasing behavior segments
  • industry classification 
  • Key Customer groups, if not direct to end consumer
  • distributors
  • retailers
  • product transporters
  • intermediary storage
  • Employees
  • internal, specify level
  • sales force
  • support personnel for outside relationships
  • contractors (not really employees, but still impacted)
  • Stockholders (owners)
  • Board of Directors
  • Financial community
  • lenders (long & short term)
  • banks
  • Suppliers
  • Interest groups
  • community (local residents)
  • environmental
  • social advocates
  • industry trade groups
  • other (specify) 
  • Public organizations
  • governmental (specify)
  • media
  • non-profit (local, regional, national, world)
  • schools
  • public service & other charities 
  • Children
  • school projects 

6. Business plan defines the work your company intends to do. One element, the vision statement, outlines your purpose, requirements and goals at the beginning of the plan. Developing a vision for your plan involves identifying your business requirements so that you can state your intentions clearly (Swamidass 2016). Doing so will enable you to obtain business sponsorship. Obtaining funding and investment for your business endeavors often depends on your ability to articulate your goals in a realistic manner. By defining your vision and requirements up front, you can prevent changes to your requirements. Constantly changing requirements causes rework and the waste of precious and costly resources (Hair Jr et al. 2015). Making a compelling business vision plan ensures your business receives the funding and resources you need to make your business successful. Like mission statements, vision statements help to describe the organization's purpose. Vision statements also include the organization values. Vision statements give direction for employee behavior and helps provide inspiration. Strategic plans may require a marketing strategy, which could include the vision statement to also help inspire consumers to work with the organization.

7. The term "SWOT" is an acronym for the words "strengths", "weaknesses", "threats" and "opportunities". A S.W.O.T framework involves composing lists of the internal strengths and weaknesses a business that is relevant to a certain project and then creating lists of opportunities and threats that exist outside of the company that could impact the project. For example, consider a tech company wants to increase its sales by expanding its product offerings. If the company owns a patent on a new type of computer processor technology, the patent could be listed as strength, but if it the company does not have the resources to engineer and produce a prototype of the new processor, managers might list lack of capital as a weakness. Venture capitalists often invest in businesses with new ideas that have the potential for large growth, so the potential to attract venture capital could be listed as on opportunity. If competitors are in the process of developing similar technologies it could constitute a threat. Once all four lists are composed, managers can brainstorm ways to maximize strengths, limit weaknesses, take advantage of opportunities and avoid or reduce threats. The purpose of a Strengths, Weaknesses, Opportunities, and Threats framework is to get managers thinking about everything that could potentially impact the success of a new project. Failure to consider a key strength, weakness, threat or opportunity could lead to poor business decisions. For example, if the tech company with the patent for a new processor did not recognize the threat that its competitors were developing similar products, it might overestimate the sales potential of the new processor and take on debt to fund the development of the processor only to discover that the new product does not bring in enough revenue to pay off the debt. In other words, a strengths, weaknesses, opportunities, and threats brainwork can help managers avoid making costly mistakes and determine which projects are most likely to succeed.

Key Steps in Developing a Business Plan

8. Performance measurement is the process of collecting, analyzing and reporting information regarding the performance of an individual, group, organization, system or component. One of the most important aspects to be considered in relation to performance measurement process is that the performance measures work qualitatively to provide the useful information about products, processes and services that are produced in a business. Hence, implementing performance measures is a great way to understand and manage and improve what a business organization does.

The measurement of performance is a continuous process which involves checking the performance against the standards that have been fixed to be followed. It leads to compare the actual performance with the established standards. A manager needs to supervise, observe and control the activities of his subordinates while he is involved in studying various summaries or reports, so that he may manage the work in an effective manner getting the things accomplished in a desirable manner. It requires the manager to constantly check the performance in order to take corrective actions in case of deviations ensuring that such deviations do not occur gain. Thus the Performance measurement is an ongoing, continuous improvement operation.

As stated above, the process of performance measurement leads to compare the actual performance with the standards. This in turn helps managers to understand the extent at which the performance is getting deviated from the expected ones. This way determining whether performance matches standards entails evaluating the differences and take necessary actions to improve the performance. However, while analyzing deviations, it is important to consider that some deviations in performance can be expected and so controlling by exception is useful in this way. It is therefore important that a manager should concentrate on exceptional deviations instead of trying to control each and every deviation. According to management by exception principle by Fredrick W. Taylor, Managers should concentrate on only exceptional deviations instead of trying to correct each and every deviation. It is also worth mentioning the saying, “If you try to control everything, you may end up controlling nothing.”

The importance of performance measurement system lies in the fact that it not only improves the performance, but also the productivity of a business entity by reducing costs. It is a good way to align the activities with the plans being established. It provides necessary feedback that the activities may be guided accordingly by allowing managers to implement best practices. It may thus be said that performance measurement process is a great way to understand, manage and improve the overall functioning state of a business organization. If done effectively and efficiently, it drives success in business definitely.

Key Stakeholders Involved in Business Planning

9. Survey customers

  • Surveying customers is the only probable way of getting customer feedback unless they contact you.
  • Most people are busy and have no time to pass redress (Swamidass 2016).
  • You can provide survey through several ways such as emails and use of phone calls.
  • To get credible feedback you need to allow customers to answer questions on weighted scale.
  • You can conduct repeated surveys, over time, to measure changing comments from customers (Bryman and Bell 2015). 

Understand expectations

  • Understanding what customers expect from you will provide ground to satisfy their expectations by giving them enjoyable service.
  • Making an effort to discover what customers expect from you in terms of service and products is the way to satisfying their needs. 

Find out where you are failing

  • On situations where you are not fulfilling customer requirements, it is credible to find out where you are failing.
  • Incidences where products are less than advertised should not arise.
  • Find out if employees are making promises that cannot be met. 
  • Take strides and attend seminars that will equip you with better managerial skills.
  • Know the chain of communication so as to know where communication faults are and foster amendments.

10. Traditionally, many Federal agencies have measured their organizational performance by focusing on internal or process performance, looking at factors such as the number of full-time equivalents (FTE) allotted, the number of programs controlled by the agency, or the size of the budget for the fiscal year. In contrast, private sector businesses usually focus on the financial measures of their bottom line: return-on-investment, market share, and earnings-per-share. Alone, neither of these approaches provides the full perspective of an organization's performance that a manager needs to manage effectively (Bryman and Bell 2015). But by balancing internal and process measures with results and financial measures, managers will have a more complete picture and will know where to make improvements.

Balancing Measures

Robert S. Kaplan and David P. Norton have developed a set of measures that they refer to as "a balanced scorecard." These measures give top managers a fast but comprehensive view of the organization's performance and include both process and results measures. Kaplan and Norton compare the balanced scorecard to the dials and indicators in an airplane cockpit. For the complex task of flying an airplane, pilots need detailed information about fuel, air speed, altitude, bearing, and other indicators that summarize the current and predicted environment. Reliance on one instrument can be fatal (Burns 2016). Similarly, the complexity of managing an organization requires that managers be able to view performance in several areas simultaneously. A balanced scorecard or a balanced set of measures provides that valuable information.

Four Perspectives

Kaplan and Norton recommend that managers gather information from four important perspectives:

  • The customer's perspective. Managers must know if their organization is satisfying customer needs. They must determine the answer to the question, How do customers see us?
  • The internal business perspective. Managers need to focus on those critical internal operations that enable them to satisfy customer needs. They must answer the question, What must we excel at?
  • The innovation and learning perspective. An organization's ability to innovate, improve, and learn ties directly to its value as an organization. Managers must answer the question, Can we continue to improve and create value for our services?
  • The financial perspective. In the private sector, these measures have typically focused on profit and market share. For the public sector, financial measures could include the results oriented measures required by the Government Performance and Results Act of 1993 (GPRA). Managers must answer the question, How do we look to Congress, the President, and other stakeholders?

Tie-In to Employee Performance

The balanced scorecard philosophy need not apply only at the organizational level. A balanced approach to employee performance appraisal is an effective way of getting a complete look at an employee's work performance, not just a partial view. Too often, employee performance plans with their elements and standards measure behaviors, actions, or processes without also measuring the results of employees' work. By measuring only behaviors or actions in employee performance plans, an organization might find that most of its employees are appraised as Outstanding when the organization as a whole has failed to meet its objectives.

By using balanced measures at the organizational level, and by sharing the results with supervisors, teams, and employees, managers are providing the information needed to align employee performance plans with organizational goals. By balancing the measures used in employee performance plans, the performance picture becomes complete.

Purpose of a Business Vision

11. SMART is an acronym that you can use to guide your goal setting.

Its criteria are commonly attributed to Peter Drucker's Management by Objectives concept. The first known use of the term occurs in the November 1981 issue of Management Review by George T. Doran. Since then, Professor Robert S. Rubin (Saint Louis University) wrote about SMART in an article for The Society for Industrial and Organizational Psychology. He stated that SMART has come to mean different things to different people, as shown below.

To make sure your goals are clear and reachable, each one should be:

  • Specific (simple, sensible, significant).
  • Measurable (meaningful, motivating).
  • Achievable (agreed, attainable).
  • Relevant (reasonable, realistic and resourced, results-based).
  • Time bound (time-based, time limited, time/cost limited, timely, time-sensitive).

Professor Rubin also notes that the definition of the SMART acronym may need updating to reflect the importance of efficacy and feedback. However, some authors have expanded it to include extra focus areas; SMARTER, for example, includes Evaluated and Reviewed.

SMART is an effective tool that provides the clarity, focus and motivation you need to achieve your goals. It can also improve your ability to reach them by encouraging you to define your objectives and set a completion date. SMART goals are also easy to use by anyone, anywhere, without the need for specialist tools or training (Hair Jr et al. 2015).

Various interpretations of SMART have meant that it can lose its effectiveness or be misunderstood. Some people believe that SMART doesn't work well for long-term goals because it lacks flexibility, while others suggest that it might stifle creativity.

12. Excellent customer service, employee satisfaction and enthusiasm, and office organization are all desirable characteristics of a company.  They are also key performance indicators (KPIs), which are a necessary part of any business aiming for success.  KPIs are used by organizations to measure, monitor and manage performance; they allow employers/employees to envision what needs to be done to improve their organization (Burns 2016).

KPIs "represent a set of measures focusing on those aspects of organizational performance that are the most critical for the current and future success of the organization" (Parmenter 3).  KPIs are an invaluable form of business intelligence.  When determined by an organization, they can educate every member of the company with regards to developing a strong team approach to business (Swamidass 2016).

Monitoring, managing and analyzing KPIs takes time and energy, so it is necessary that appropriate ones are chosen to address the specific needs of the company.  The two main characteristics that help construct a relevant KPI include: (1) the need for it to be "measured frequently" (daily or constantly if possible) as well as (2) there must be an understanding of what has to be done to fix outcomes predicted by the KPI.

Purpose of a SWOT Analysis in Business Planning

If a company relies on having a strong web presence to generate leads, an example of a relevant KPI would be the "bounce rate."  A bounce rate represents the percentage of initial visitors to a site who "bounce" away to a different site rather than continuing on to other pages within the same site (Burns 2016).  The conventional wisdom is that visitors who bounce do so for lack of compelling reasons to explore on.  Typically, the target for bounce rate is 30 percent or lower and it needs to be updated on a daily basis.  If the bounce rate is higher than 30 percent, then the web content should be modified to help lower the rate (Hair Jr et al. 2015).  This satisfies the characteristics of a KPI and it is apparent how valuable it is to continually monitor the bounce rate (Bryman and Bell 2015).

As shown above, a KPI will "tell you an action that needs to take place" (Parmenter 6).  If a KPI has been correctly assigned to a company, it will have a "flow-on effect" which will in turn benefit the company (Parmenter 7).  The entire office can monitor and fix problems associated with the success rate of the company’s KPIs (Eckerson xiii).

In addition, KPIs can create a type of benchmarking within one’s business.  A person can see the present quality of their business and with the use of KPIs, they can envision the business they want to become; they help companies become what they deem the epitome of success through the process of managing, monitoring and analysis.

Performance dashboards are generally used to facilitate the easy monitoring of an organization’s KPIs.  The dashboard will check the rate at which the chosen KPI is succeeding (or failing).  If the results of the KPI are not improving, the dashboard will visually alert staff that changes must be made.  It will then be possible to analyze what could have caused the shortcoming and allow staff to quickly remedy the situation.  

Performance dashboards facilitate getting "the right information to the right users at the right time to optimize decisions, enhance efficiency, and accelerate results".  As performance dashboards have the data needed to measure a KPI in one place, it is easy to see if the KPIs are succeeding in their purpose or not.  Such dashboards allow employees at any level to monitor information which represents the outcome of a KPI.  Dashboards are a topic onto itself and beyond the scope of this article. 

Importance of Using a Range of Performance Measures

Every business person should strive to create exceptional KPIs, as they show the ways in which troubled companies can fix their problems and successful companies can proactively plan and manger continued success (Burns 2016).  Companies will obviously benefit when employees can readily understand what needs to be done through the presentation of easy-to-read dashboards allowing them to make the most effective follow-up decisions.

Task 2

Oz House Cleaning Service's projected growth rate is very high each year with respectable profit margins as a percentage of sales. MHCS will be a home-based business with Sarah Tookleen as the sole proprietor. By the end of year one, MHCS will have six additional employees. This house cleaning business plan will help the owner navigate the startup, and subsequent management of the business.

Mission:

 Oz house Clean is committed to providing the highest quality residential and commercial cleaning services available by exceeding the expectations of our clients. Vision We are constantly working to establish ourselves as the most respected and sought after contract cleaning and facilities support service in Melbourne.

Values Respect:

Taking time to understand and value each person and respecting their choices. Responsibility: acting with integrity towards our staff, our customers, the community and the environment.

Caring:

A duty of care for our staff, customers and the environment

Excellence:

To always look to provide the best quality experience with regards to our cleaning and our customer service. Integrity: to act with honesty, openness and do what we say we will do.

Innovation:

To be among the industry leaders

Objectives

Our key objectives which are fundamental to our business in delivering world-class cleaning and customer service are as follows:

  • Provide our customers with a professional and friendly service.
  • To increase the number of clients by 20% in the first year of introducing commercial cleaning services and 10% thereafter
  • Meet or exceed the expectations of customers
  • Implement best practice in cleaning operations, including environmentally sustainable practices

SWOT

Strengths

  • An enthusiastic company with a strong, infectious leader.
  • A well designed training program to share and capture intellectual capital for the organization.
  • Dedicated employees.

Weaknesses

  • Labor-intensive industry.
  • Inherent time lag when building goodwill and trust.
  • The difficulty of establishing brand equity as a start-up company. 

Opportunities

  • A large percentage of the market that is unaware of Mother's.
  • Shifts in consumer consumption habits that are moving toward increased utilization of cleaning services.
  • A business model that is easily scalable.

Threats

  • Employee turnover.
  • The entrance of a serious competitor.

Marketing strategy

Oz House cleaning services’ target market was chosen because these customers appreciate a professional, reliable, trustworthy, and immaculate house cleaning service, and are more than willing to pay for this. While Cleanly, WA has several different cleaning services, MHCS is the only one that targets the affluent exclusively. The wealthy are consistent customers. Whether they have a house cleaning service does not depend on the finances each month. These groups always have the money for our services, just as they always need/desire a clean house.

The affluent desire quality and are willing to pay a premium for a service that they can trust 100%  that extrudes professionalism. This is done in a seamless, customer-centric manner.

The company will be marketed through a three-pronged approach. One prong is the distribution of a color brochure detailing our services. The distribution of this document will be targeted to hit the chosen segment. This will be done by setting up strategic relationships with organizations or clubs whose members fit the targeted customer profile. Examples of this would be higher-end athletic clubs, country clubs, wine connoisseur clubs, etc.  Access will be gained to these clubs membership through deals where the club owners will receive Mother's services for themselves.

The second prong of our approach will be through word-of-mouth referrals. Mother's will offer an economic incentive (such as a free visit) to customers if they bring in new business.  This will be effective because the financial incentive will motivate their behavior, and people naturally like to share good deals with their friends.

The third prong will be an advertising campaign in two of the local newspapers.  The advertisements will appear in the weekly home section of the newspapers.

Task 3 

                                                                     

Year 1

Year 2

Gross revenue

$4,125,000

$4,207,500

Cost of goods sold

$320,000

$326,400

Gross margin

$3,805,000

$3,881,100

Other revenue [source]

$100,000

$100,000

Interest income

$0

$0

Total revenue

$3,905,000

$3,981,100

Operating expenses

Sales and marketing

$80,000

$81,600

Payroll and payroll taxes

$100,000

$102,000

Depreciation

$153,000

$156,060

Maintenance, repair, and overhaul

$0

$0

Total operating expenses

$333,000

$339,660

Operating income

$3,572,000

$3,641,440

Interest expense on long-term debt

$0

$0

Operating income before other items

$3,572,000

$3,641,440

Loss (gain) on sale of assets

$0

$0

Other unusual expenses (income)

$0

$0

Earnings before taxes

$3,572,000

$3,641,440

Taxes on income

30%

$1,071,600

$1,092,432

Net income (loss)

$2,500,400

$2,549,008

 Task 4

Meeting regarding the mission of the organization on 8/6/2018

Purpose of the meeting:

  1. All surfaces, including floors, bench tops and shelves cleaned so that they are free of dust and dirt.
  2. Rubbish bins emptied and cleaned.
  3. Shower screens and mirrors cleaned and free of soap build up and streaks.
  4. Only cleaning products provided are used.
  5. All cleaning services must be provided in the allocated time.

What do I need to hand in for the task

Have I completed this

Report to the contract cleaner

ü   

Report to management

ü   

Cite This Work

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My Assignment Help (2020) Business Planning Process And Performance Measures | Ozhouse Clean Essay. [Online]. Available from: https://myassignmenthelp.com/free-samples/bsbmgt617-develop-and-implement-a-business-plan/marketing-strategies.html
[Accessed 24 July 2024].

My Assignment Help. 'Business Planning Process And Performance Measures | Ozhouse Clean Essay.' (My Assignment Help, 2020) <https://myassignmenthelp.com/free-samples/bsbmgt617-develop-and-implement-a-business-plan/marketing-strategies.html> accessed 24 July 2024.

My Assignment Help. Business Planning Process And Performance Measures | Ozhouse Clean Essay. [Internet]. My Assignment Help. 2020 [cited 24 July 2024]. Available from: https://myassignmenthelp.com/free-samples/bsbmgt617-develop-and-implement-a-business-plan/marketing-strategies.html.

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