Level 3 Business Planning Assessment Case Study

Transcription

1 Personal Trainer Assessment Case Study Important: you must complete the following details before returning this Learner Workbook to Lifetime Name of learner: address: I can confirm this is all my own work. Signature: Date:

2 PERSONAL TRAINER ASSESSMENT CASE STUDY Contents case study requirements 3 Guidelines for completing your Business Planning case study 4 case study checklist 5 Principles for developing a business plan in active leisure unit 6 Your business vision 8 Market research 14 Location 25 Sales and marketing 27 Legal obligations 31 Finance 35 Action plan 43 Business plan case study marking grid 44 2

3 LeveL 3 BUSINESS PLANNING case study requirements This predictive case study forms part of your Diploma in Personal Training and. It allows you to draw together all of the knowledge gained and formulate a plan as to how you will use it when working in the industry. The case study covers the knowledge in the unit Principles of Developing a Business Plan in Active Leisure. Successful completion of this unit depends upon the submission of a viable business plan appropriate for a start-up personal training business. Treat this as a reflection of your actual circumstances, as if you are about to start a personal training business, planning entirely from concept to execution, from scratch, today. What is a business plan? A business plan is any plan that allows for a business to look ahead, allocate resources, focus on key points, and prepare for problems and opportunities. Unfortunately, many people think of business plans only when starting a new business or applying for business loans. But they are also vital for running a business, whether or not the business needs new loans or new investments. Businesses need plans to optimise growth and development according to priorities. Your plan will depend on your specific situation. For example, description of the management team is very important for investors, while financial history is most important for banks. However, if you are developing a plan for internal use only, you may not need to include all the background details that you already know. Make your plan match its purpose. What is most important in a plan? This varies according to the business and the situation, but the cash-flow analysis and specific implementation details are important aspects to consider. Cash-flow is both vital to a company and hard to follow. Cash-flow is usually misunderstood as profit, but they are very different. Profits don t guarantee cash in the bank. Lots of profitable companies go under because of cash-flow problems, as profits mean nothing if locked up in a promise to be paid later when bills need to be paid today. Implementation details are what make things happen. Your brilliant strategies and beautifully formatted planning documents are just theory unless you assign responsibilities, with dates and budgets, follow up with those responsible and track results. Business plans are really about getting results and improving your company. What do you need to do? You should produce a business plan that answers all of the questions in this pack and gives you a solid foundation on which to build a personal training business. It should cover what you want your business to look like and how it will be structured, a study of your prospective clients and competitors, your sales and marketing strategies, the legal considerations and your financial predictions. 3

4 PERSONAL TRAINER ASSESSMENT CASE STUDY Guidelines for completing your case study Work through this assessment pack section by section and use the corresponding chapters in your Learner Workbook to help you. You must answer ALL questions in detail. Each question is worth a set amount of marks and you need to get all questions correct to pass. Any incorrect will need to be re-attempted before you have passed your assessment. Start with your business vision. You need to work out the service offering you will have will you be doing one-to-one personal training sessions, outdoor boot camps, weightloss clubs? You then need to write up a mission statement identifying what your company is trying to achieve. Next, set some SMART goals for the business. You need to have shortterm, medium-term and long-term goals. You must then consider the legal aspects of your business. What type of business will you be setting up? How will you be taking payments from your clients? Design a contract that you will use with clients. Finally, you need to plan the financial aspects of your business. What purchases will you need to make? How much will you budget for this? Produce a break-even analysis, forecasted monthly income, cash-flow forecast and profit and loss statement. You will also need to consider the legal financial requirements of things such as tax and national insurance. Following this, look at your market research. How would you carry this out? Identify your target market and your USPs that will attract them. Carry out a SWOT analysis of your business and compare and contrast your business with your competitors. Answer the questions about the location of your business, considering all of the factors that will make it successful. Following on from this, produce a marketing plan considering how you will market to your target audience and the marketing and pricing strategies you will put into place. 4

5 LeveL 3 BUSINESS PLANNING case study checklist Before sending in your case study for marking, please ensure you have completed and included all of the following items: If you have completed all of the items above and think they meet the criteria set out in the marking grid then you are ready to submit your case study. Case study item Your business vision Market research Location Sales and marketing Included (please tick) The case study may be submitted by to learnerservices@lifetimetraining.co.uk. Make sure the contains your full name and states the type of case study you are submitting. Alternatively, send a hard copy of the case study to: Lifetime Training, Learner Services, Floor 12, Clifton Heights, Triangle West, Bristol BS8 1EJ. You will need to keep a second copy of your case study for your records. This will ensure you are covered should your original submission be mislaid in the post. Legal obligations Finance 5

6 PERSONAL TRAINER ASSESSMENT CASE STUDY Innovation in Awarding Below is a copy of the unit this case study relates to. You do not need to do anything with this, it is merely for information. Alongside each question you will see some numbers, these show which assessment criteria the question relates to. Title: K/503/8082 Principles of developing a business plan in Active Leisure Level: 3 Credit Value: 2 GLH 8 Learning Outcomes The learner will; Assessment Criteria The learner can; 1. Understand the principles of creating a vision for own business 1.1 Describe the services they are to offer to potential clients 1.2 Explain how they will prioritise services to focus more effectively on their time 1.3 Describe their vision for the business based on their own skills, experience, and previous achievements 1.4 Describe own business goals for short term, medium term and long term periods 1.5 Outline a mission statement to compliment the business vision 2. Know how to apply market research techniques to own business 2.1 Identify how to apply primary and secondary research for own business 2.2 Explain how they would test their services on a potential client 2.3 Outline questions they would like to ask potential clients 2.4 Describe what services they can offer that may be a unique selling point for potential clients 2.5 Compare and contrast competitors in the same active leisure areas as own business 2.6 Describe strategies that offer an advantage over competitors 2.7 State strengths, weakness, opportunities and threats of own business vision 3. Know the principles of the importance of location of own business 3.1 Identify locations for own business 3.2 Evaluate the advantages of chosen locations including the target market 3.3 Evaluate the disadvantages of chosen locations including the target market 3.4 Outline considerations of different venues within allocated budgets 3.5 Evaluate benefits of the selected chosen venue/s 4. Understand how to market own business to achieve goals 4.1 Analyse the influential requirements of the potential clients 4.2 Describe methods they can reach their potential target audience 4.3 Explain the types of clients their business needs to attract 4.4 Explain how to promote their product/services to these clients 4.5 Outline various strategic methods to promote their own business 4.6 Calculate a pricing strategy that meets the needs of their potential clients 4.7 Identify a sales strategy that would benefit their sale to a target market 6

7 LeveL 3 BUSINESS PLANNING Innovation in Awarding 5. Know how to comply to legal requirements of starting own business 5.1 Identify the legal requirements to becoming self employed 5.2 Outline different trading methods that apply to own business vision 5.3 Identify a trading method appropriate for own business vision 5.4 Evaluate the differing methods of payment schedules for potential clients 5.5 State payment suggestions that legally meet a binding contract for a potential client 5.6 Identify a basic legal contract that can be created between own business vision and the potential client 5.7 Identify legal requirements on VAT and Tax for own business 6. Know how to control own financial model of running a business 6.1 Identify a pricing structure based on business vision 6.2 Identify pre-trading business purchases required 6.3 Set financial break-even analysis for the potential business for a 12 month period 6.4 Estimate monthly income for potential of the business for a 12 month period 6.5 Estimate cash-flow forecasting for the potential business for a 12 month period 6.6 Estimate a profit and loss statement for potential business for the selected 12 month period 6.7 State the legal financial requirements that need to be considered for the business vision 6.8 State the purposes of cashbooks for the business 6.9 Identify the requirement to issue clients with receipts for purchased services 6.10 Estimate initial business expenditures that own business may require before operation Unit aim(s) The aim of this unit is to provide the Learner with the knowledge and understanding of the principles of setting up and running a business from the creation of a business plan. The learning provides the Learner with the understanding of evaluating a holistic business concept from initial thought to conception, considering legal and marketing requirements for a business plan. Details of the relationship of the unit and relevant national occupational standards The unit has some relation to the Plan, Market and Sell Services in Active Leisure standards and Unit B242 from Skillsactive. Whilst the Unit B242 is around planning, market and selling services, this unit is around the principles of developing a business plan. 7

8 PERSONAL TRAINER ASSESSMENT CASE STUDY Your business vision When creating your vision for your business you will need to consider a number of aspects. These are listed below and you will answer questions on these in this section. The principles of creating a vision for your business. What personal training service will you be offering? What will you do? Mission statement Many companies have a brief mission statement, usually in 30 words or less, explaining their reason for being and their guiding principles. If you want to draft a mission statement, this is a good place to put it in the plan, followed by company goals and objectives. Goals are destinations where you want your business to get to and be. Objectives are progress markers along the way to goal achievement. For example, a goal might be to set up a personal training studio with two other trainers employed and a loyal customer following. Objectives might be annual sales targets and some specific measures of customer satisfaction. Business philosophy What is important to you in business? To whom will you market your products? What is the industry like in which you will be operating? What are your company s strengths and core competencies? What factors will make the company succeed? What do you think your major competitive strengths will be? What background experience, skills and strengths do you personally bring to this new venture? 8

9 LeveL 3 BUSINESS PLANNING 1.1 Describe the services you intend to offer your clients. (3 marks) AC1.1 9

10 PERSONAL TRAINER ASSESSMENT CASE STUDY 1.2 Use the service pyramid below to identify which services you will focus and prioritise your time on. Use pages 2 and 3 in your business planning Learner Workbook to help you. (3 marks) AC How will you prioritise your time to make this happen? (1 mark) AC1.2 10

11 LeveL 3 BUSINESS PLANNING 1.3 Briefly describe the following about yourself The skills you can bring to this business. (2 marks) AC Any relevant experience/previous achievements. (2 marks) AC Now describe your vision for the business based on the factors above. (2 marks) AC1.3 11

12 PERSONAL TRAINER ASSESSMENT CASE STUDY 1.4 Write a mission statement for your business. Use pages 6 to 7 in the Learner Workbook to help you. (2 marks) AC1.5 Setting goals To bring the vision for your business to life you need to set yourself some goals. These should be SMART: Specific What exactly do you want to do? Give numbers, figures, quantities. Measurable How are you going to check that you are achieving these and how often? Achievable Can these be achieved and if so why/how do you know? Relevant How do these goals relate to your business vision/mission statement? Timed How long will it take you to achieve this? The timeframes for your short, medium- and long-term goals can be decided by you and should be relevant to the targets set. 1.5 Answer the following questions about your business goals. AC Outline the long-term, medium-term and short-term SMART goals for your business. (3 marks) Long-term S (specific) M (measurable) A (achievable) R (relevant) T (time-framed) 12

13 LeveL 3 BUSINESS PLANNING Medium-term S (specific) M (measurable) A (achievable) R (relevant) T (time-framed) Short-term S (specific) M (measurable) A (achievable) R (relevant) T (time-framed) Now complete the table below identifying the barriers you may face and how you can overcome these. (2 marks) AC1.4 Barrier Method for overcoming barrier 13

14 PERSONAL TRAINER ASSESSMENT CASE STUDY Market research Researching your market before launching your business is essential. This section covers the following elements: Understand the competition An integral component to understanding any business environment is to understand the competition, both its nature and the bases for competition within the industry. Is it a particularly competitive environment, or one that lacks competition? Is the competition simply other gyms and local trainers, or is it other distractions and perceived uses of time and money? How are the incumbents competing? Is there a price leader evident? What factors make them the most popular and successful? A thorough understanding of the bases on which you intend to compete is vital. Can you compete effectively with the existing players? How can your service stand out in terms of availability, skills, price, expertise and so on? Research the market thoroughly Another important factor in business planning is to know your market thoroughly. Not understanding your market will only set you up for failure in sales. Prospective investors place great importance on knowledge of the market and the need for entrepreneurs to thoroughly research their market. You should undertake market research and ensure that the plan includes reference to a clearly identified target population, precisely what product or service is required, the market size, the predicted growth path and how you will gain access to this market. Market research Why? No matter how good your product and your service, the venture cannot succeed without effective marketing. And this begins with careful, systematic research. It is very dangerous to assume that you already know about your intended market. You need to do market research to make sure you re on track, otherwise it s simply your ideas and not the customers, and they are the ones who count. Use the business planning process as your opportunity to uncover data and to question your marketing efforts. Your time will be well spent. Market research How? There are two kinds of market research primary and secondary. You may benefit from using one type or your research may require you to use both. 14

15 LeveL 3 BUSINESS PLANNING 2.1 Define primary and secondary market research and identify how you will apply both for your own business. (4 marks) AC2.1 Use page 10 in your Learner Workbook to help you. Definition Application to your business? Primary Secondary 2.2 outline three questions that you would like to ask potential clients when doing primary market research. (3 marks) AC

16 PERSONAL TRAINER ASSESSMENT CASE STUDY 2.3 Explain two ways that you will test the services you plan to offer with potential clients? (1 mark) AC For a business to be successful it must have something unique about it, finding a niche in the market and appealing to customers over others offering similar products. 2.4 Using the information on page 13 in your Learner Workbook to help you, describe what you think your business s USPs are? (3 marks) AC

17 LeveL 3 BUSINESS PLANNING Researching your competition Knowing who you are competing against, what their strengths and weaknesses are compared to yours, and where they pitch themselves in terms of their USPs, pricing and so on is vital to getting your business right. 2.5 Who are your direct competitors, for example, gyms, personal trainers? Will they compete with you across the board, or just for certain products, certain customers, or in certain locations? (2 marks) AC Give two examples of indirect competitors to your business? They may offer similar services but in a different way, such as the online sale of slimming tablets. (2 marks) AC How will your products or services compare with the competition? (3 marks) AC4.1 Use the table on the next page to compare your company with your two most important competitors. Compare against each of the key competitive factors in the first column. In a few words, state how you think you compare with them. In the final column, estimate the importance of each competitive factor to the customer, 1 being critical and 5 being not very important at all. 17

18 Competitor analysis FACTOR Me Competitor A Competitor B Importance to customer Products and range Price/payment options Quality/expertise Customer Service Sales and marketing Location Brand (image) 18

19 LeveL 3 BUSINESS PLANNING 2.8 Looking at the table you have created, describe three strategies that you could use to offer an advantage over your competitors? (3 marks) AC SWOT analysis 2.9 Complete the SWOT analysis table to summarise the strengths, weaknesses, opportunities and threats your business faces. (4 marks) AC4.1 Use the answers you gave in the competitor analysis table and page 15 in your Learner Workbook to help you. Strengths Weaknesses Opportunities Threats 19

20 PERSONAL TRAINER ASSESSMENT CASE STUDY Researching your industry An important aspect of market research is to know about the industry/area in which you will be operating. Conduct some research into the following and identify your sources for each What is the size of the fitness/active leisure industry? (2 marks) For example, how many people are members of gyms nationwide? How many gyms are there? How many qualified personal trainers are there? Provide a brief summary of this information. AC4.1 / AC What are the current trends in the industry? (2 marks) Consider if it is growing or shrinking? Which locations are currently popular for exercise e.g. gyms, outdoors, home? Are there styles of exercise or pieces of equipment popular at present? AC Provide an example of where you feel there is potential for growth in this sector? (1 mark) AC4.3 20

21 LeveL 3 BUSINESS PLANNING 2.13 What challenges is the industry facing currently, such as the economy, costs, advances in technology? (2 marks) AC How will the trends, growth potential and challenges in the industry affect your new business? (3 marks) Trends: AC2.5 Growth potential: Challenges: 21

22 PERSONAL TRAINER ASSESSMENT CASE STUDY Researching your customers Identify your customers, their characteristics and their geographic locations, otherwise known as their demographics, then answer the questions below. You may have more than one customer group Identify the most important customer group for your business then construct a demographic profile for them using the following table. (2 marks) AC2.5 Group: Characteristic Customer information Age/gender Occupation/income/education Where do they live/work? Where and when do they exercise? What do they do?/where do they go in their spare time? What are their goals? Health-related, fitness, weight loss, competing in sports? 22

23 LeveL 3 BUSINESS PLANNING Now answer the following questions based on your target market What do you think the size of target group in your area is? (1 mark) AC2.5 / AC How much demand is there for a business like yours from this group? (1 mark) AC What needs/wants does your business cater for in this group? (1 mark) AC2.7 23

24 PERSONAL TRAINER ASSESSMENT CASE STUDY Optional task: Your USP re-analysed You will not be assessed on your answers to this question but may find it useful to complete to help you formulate your future business plan. Now that you have systematically analysed your industry, your product, your customers and the competition, you should have a clear picture of where your company fits into the world. Take a few moments to think about the analysis you have just completed. Would you change any of your views about what makes your company/products unique? If not justify why. 24

25 LeveL 3 BUSINESS PLANNING Location It is likely that you don t have a precise location picked out yet. This is the time to think about what you want and need in a location. Many start-ups run successfully from home for a while, yours or theirs. You can also use other gyms, halls, parks, beaches, swimming pools and so on. 3.1 Identify the location(s) that your business will run from. Consider the services you will be offering and your target market when making this decision. (1 mark) AC3.1 Use page 17 in your Learner Workbook to help you. There will be advantages/benefits of certain locations to both you and your target market but also disadvantages/drawbacks for both. 3.2 Evaluate at least three advantages/benefits and disadvantages/drawbacks of your chosen location from both your own and your target market s perspectives in the table below. (3 marks) AC3.2 / AC3.5 Consider accessibility, cost, brand image, competitors and so on. Advantages/benefits Disadvantages/drawbacks 25

26 PERSONAL TRAINER ASSESSMENT CASE STUDY Consider the following scenarios. These may make you question the venues you have chosen above, so please revisit 3.1 if necessary. 3.3 Answer the following questions about alternative venues for your business If you had no budget to spend on a venue, where could you operate and still deliver the services in the way you desired? (1 mark) AC3.2 AC outline at least two advantages/benefits and disadvantages/drawbacks of these venues? (2 marks) AC3.2 Advantages/benefits Disadvantages/drawbacks If you had unlimited money to spend on a venue, where would you operate from? (1 mark) AC outline at least two advantages/benefits and disadvantages/drawbacks of these venues? (2 marks) AC3.2 Advantages/benefits Disadvantages/drawbacks 26

27 LeveL 3 BUSINESS PLANNING Sales and marketing Without the ability to market and sell the services you wish to provide, your business cannot be successful. To do this, you need to have a good understanding of the marketing mix. Use section 4 in your Learner Workbook from page 19 onwards to help answer the following questions. 4.1 Produce a marketing mix that analyses each of the following for your own business to help you reach your potential target audience. (4 marks) AC4.1 / AC4.2 / AC4.4 / AC4.5 / AC4.6 P P P P You have already done some work in this case study on product and place. The next section will look at promotion. Your pricing strategy will be assessed in the financial section. 27

28 Promotion ac4.2 / ac 4.4 / ac4.5 you must plan in detail how you intend to market your products and services, what methods and strategies you will employ, the budgets you will set aside for this and the message you wish to convey. 4.2 Complete the table below to identify three promotional methods you will employ, relevant strategies you will use/key marketing messages you wish to convey, and how often you will do this. (3 marks) use pages in your learner workbook to help you. an example one has been filled in for you. Promotional method Strategy Key marketing messages How often will you do this? Attend local business networking event Offer clients of other businesses with whom you network a 20% discount on services when they state that they have been referred Outdoor, fun and social group sessions designed for those new to exercise or coming back after a long time off Attend bi-monthly networking events 28

29 LeveL 3 BUSINESS PLANNING 4.3 As well as marketing your products and services, you will need to be able to sell them to any prospective client who contacts you off the back of this. Answer the following questions to devise your sales strategy How/where will you carry out your sale to your potential client? (2 marks) For example, over the phone, a face-to-face consultation in a coffee shop, face to face in the gym. AC Identify two benefits of these sales methods? (2 marks) AC Identify two drawbacks of these sales methods? (2 marks) AC List three things that you will do to increase the success rate when selling your product/service? (3 marks) AC Identify three benefits of your product/service that you would highlight to the potential client when speaking to them? (3 marks) AC

30 PERSONAL TRAINER ASSESSMENT CASE STUDY Optional task: Reflection Now you have developed your sales and marketing strategies, it is good to reflect on these to help you decide if you want to change anything or have alternative plans for the future if these are not as successful as would like. Do this by answering the following questions. 4.6 Why are the marketing methods you have chosen feasible for your business? Consider the budget you have and any other relevant factors. You may wish to answer this after completing the financial section. (2 marks) 4.7 How do your sales and marketing methods convey the image of your business that you wish? How do they match your goals and mission statement? (2 marks) 4.8 Who, for example, web designer, graphic designer? What will they do? Have you set aside budget for this? (2 marks) Who? What will they do? What is your budget? 30

31 LeveL 3 BUSINESS PLANNING Legal obligations There are a number of legal considerations when starting a business. Answer the questions below using section 5 on page 26 of your Learner Workbook. 5.1 once you start trading, how long have you got to register as self-employed and how do you do this? (2 marks) AC Outline the three types of trading status in the table below. (3 marks) AC5.2 Trading status Outline 31

32 PERSONAL TRAINER ASSESSMENT CASE STUDY 5.3 Identify the type of business you will trade as and explain your choice. (2 marks) AC Evaluate the benefits and drawbacks to your business and your customers of the following types of payment methods. (4 marks) AC5.4 / AC5.5 Payment method Benefits Drawbacks Cash or cheque at the start of each session Cash or cheque, either monthly or for blocks of sessions up front Debit/credit card payments monthly Monthly direct debit 32

33 LeveL 3 BUSINESS PLANNING 5.5 Identify how you intend to take payment from clients and why you have chosen this method. (1 mark) AC Design a legally binding contract that you will use with your clients prior to starting training sessions with them. This should include details on payment policies. (4 marks) Use page 27 of your Learner Workbook and your online resources, which can be found at AC5.6 33

34 PERSONAL TRAINER ASSESSMENT CASE STUDY 5.7 Identify the legal requirements for tax and VAT AC5.7 / AC6.7 Use page 28 in your Learner Workbook, your online resources and the following website When does the tax year start and end? (1 mark) AC5.7 / AC When do you need to pay your tax? (1 mark) AC5.7 / AC When do you fill in your tax return? (1 mark) AC5.7 / AC What is VAT and when should you charge it? (1 mark) AC5.7 / AC6.7 34

35 LeveL 3 BUSINESS PLANNING Finance Pricing Price is often a consideration for customers. For most small businesses however, having the lowest price is not always the best policy. It can rob you of much-needed profit margin; customers may not care as much about price as you think; and large competitors can often undercut you anyway. Your price should reflect the quality of your service/product offering. You may be offering a personal training service and this may be the influencing factor in your price the satisfaction gained from an entirely unique and personalised service. 6.1 Answer the questions below on the pricing structure for your business Complete the table below identifying the prices you will charge for individual and block-booked sessions. (3 marks) AC4.6 / AC6.1 AC6.1 You can choose what your block-booking size should be and the percentage reduction you will offer. You may also wish to offer prices for those booking as a pair or small group. Use page 29 in your Learner Workbook as a guide. Number of sessions Cost Percentage reduction How does your pricing strategy fit with what was revealed in your competitive analysis? (1 mark) AC6.1 35

36 PERSONAL TRAINER ASSESSMENT CASE STUDY How does your pricing strategy match your target market? (1 mark) AC Compare your prices with those of the competition. Are they higher, lower, the same? Please give reasons as to why? (2 marks) AC6.1 36

37 LeveL 3 BUSINESS PLANNING Business purchases 6.2 Fill in the tables below to identify your business purchases. AC Identify any purchases that you will need to make before beginning to trade and estimate a cost for each. (2 marks) Purchase Cost TOTAL Identify any predicted on-going business expenditure. (2 marks) AC6.2 / AC6.10 On-going expenditure Cost TOTAL 37

38 PERSONAL TRAINER ASSESSMENT CASE STUDY Financial planning The financial plan consists of a 12-month profit and loss projection, a cash-flow projection, a projected balance sheet and a break-even calculation. Together they constitute a reasonable estimate of your business s financial future. More importantly, the process of thinking through the financial plan will improve your insight into the inner financial workings of your company. Monthly income 6.3 Using the table below, estimate your monthly income. (3 marks) Use page 31 of your Learner Workbook to help you. AC6.4 Break-even analysis This helps you to calculate how much income you need to bring in on a monthly basis to avoid making a loss. 6.4 Fill in the table below to calculate your break-even requirements for a 12-month period (4 marks) Use page 30 of your Learner Workbook to help you. Break-even analysis Overheads (eg. Gym rent, equipment purchases) Cost AC6.3 Month Estimated Income Total cost of overheads Yearly break-even sales Monthly break-even sales 38

39 Projected cash-flow If the profit projection is the heart of your business plan, cash-flow is the blood. businesses fail because they cannot pay their bills. Every part of your business plan is important, but none of it means a thing if you run out of cash. The point of this worksheet is to plan how much you need before start-up, for preliminary expenses, operating expenses and reserves. you should keep updating it and using it afterwards. It will enable you to foresee shortages in time to do something about them perhaps cut expenses, or negotiate a loan. but foremost, you shouldn t be taken by surprise. you should track cash outlays prior to opening in a pre-start-up column. you should have already researched those for your initial expenses in question your cash-flow will show you the money you will have available to use is adequate. clearly, if your projected cash flow ever goes negative, you will need more start-up investment. This plan can therefore be used to predict when and how much you will need to borrow. There is no great trick to preparing it. The cash-flow projection is just a prediction of your accounts. for each item, determine when you actually expect to receive cash (for sales) or when you will actually have to write a cheque (for expense items). 6.5 Using the table below, estimate your annual cash-flow. (5 marks) use page 30 of your business Planning learner workbook to help you. ac6.5 Pre-start month 1 month 6 month 12 Sources of income cash sales credit sales capital introduced loans received other Total income 39

40 Cash purchases Payments to creditors Employee wages and national insurance Own drawings/ national insurance Motoring costs Rent and rates Advertising and printing business cards Promotions Telephone Training courses Insurance Work clothing Bank charges and interest Sundry expenses Loan repayments (bank) Loan repayment (other) Capital purchases Other Total expenditure Cashflow surplus/deficit (-) Opening bank balance Closing bank balance Pre-start Month 1 Month 6 Month 12 Sources of expenditure 40

41 LeveL 3 BUSINESS PLANNING Twelve-month profit and loss projection Many business owners think of the 12-month profit and loss projection as the centrepiece of their plan. This is where you put it all together in numbers and get an idea of what it will take to make a profit and be successful. Profit projections are often accompanied by a narrative explaining the major assumptions used to estimate company income and expenses. You will also need to make sure that you set aside money to pay your tax bills. Your sales projections will come from a sales forecast in which you predict sales, cost of goods sold, expenses, and profit month-by-month for one year. 6.6 Using the table below, estimate your profit and loss over a twelve month period (5 marks) Page 34 of your Learner gives a detailed example. AC6.6 Month 1 Month 6 Month 12 Total income Cost of providing service Total income (gross profit) Less overheads/expenses Net profit before tax 41

42 PERSONAL TRAINER ASSESSMENT CASE STUDY Cashbooks and Receipts Use pages 38 and 39 in your Learner Workbook to answer the following questions: 6.7 Why is keeping a cashbook useful for your business? (3 marks) AC You are required to give receipts to your clients. In the space below create a receipt that you can give to your clients. Use page 39 in your Learner Workbook to assist you. (4 marks) AC6.9 42

43 LeveL 3 BUSINESS PLANNING Action plan In order to achieve the long-term goals of the business, I am putting in place the following strategies: In order to achieve the medium- and short-term goals of the business, I am putting in place the following strategies: 43

44 PERSONAL TRAINER ASSESSMENT CASE STUDY Case Study Marking Grid Learner Assessor Date Date Summary of results Section: Pass/refer Questions that need re-attempting Your business vision Market Research Location Sales and marketing Legal obligations Finance OVERALL RESULT: Assessor s signature Date 44

45 LeveL 3 BUSINESS PLANNING Assessor feedback for learner: What did you do very well? What could you improve / might you want to consider in future? 45

46 PERSONAL TRAINER ASSESSMENT CASE STUDY What additional work is required from you in order to pass? Assessor s signature: Date: IV signature: Date: 46

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48 Lifetime Clifton Heights Triangle West Bristol BS8 1EJ ltg-400 e: w: