Business Planning Flashcards
1
Q
Talk me through current RICS Business Plan
A
Business Plan 2021-22 - Dec 21
- Acknowledges events surrounding Levitt damaged trust and confidence in RICS, particularly amongst members - Report commits to rebuilding trust and confidence through delivering on recommendations - especially the review into governance, purpose and strategy of the RICS and improving whistleblowing arrangements
- Targets the rebuilding of economies emerging from the worst of Covid-19 pandemic with focus on challenges of population growth, urban development, resilience and climate change.
- Freeze membership costs for the next year at least Seek to minimise any subscription increases
- Utilise surplus cash to repay furlough moneys received as part of Coronavirus Job Retention Scheme
- Focus on the 5 key pillars
- Trusted by our stakeholders and society
- RICS qualifications in demand
- Influential thought leader
- Involved and engaged members
- Sustainable 21st century professional body
2
Q
What is a business plan?
A
- A statement of practice given direction to how a company is going to achieves its goals.
- A formal document of immediate goals that may be required by lenders if a practice is seeking finance.
3
Q
What is your company’s current business plan?
A
- Increase head count by 50% in commercial and planning
- Develop project management services
- Increase market share in key local sectors including highways/infrastructure and residential
- Improve headcount of RICS members
4
Q
How will it deliver that business plan?
A
- using existing network connections and external consultants to recruit new staff with the necessary competence
- business development: short term with targeting current staff and long term for BDM permanent role
- employ dedicated management accountant
- employ projects administrator to relive admin burden on senior staff
5
Q
What are the typical headings within a business plan?
A
- Summary / company background
- Financial information
- Meet the team
- Recent projects
- Business Strategy
- Current/future market information
- Timeline – short/medium/long term objectives
- PESTLE and SWOT analysis.
6
Q
What is a SWOT analysis?
A
- It is a structured analysis of the market. It is used to analyse internal strengths and weaknesses and external threats and opportunities to exploit strengths and opportunities and mitigate weaknesses and threats
7
Q
What is a PESTLE analysis?
A
- This is a structured method of analysing the key factors influencing markets (the demand side). These factors are:
- Political influences
- Economical influences
- Social-demographical influences
- Technological influences
- Environmental influences
- Legal influences
8
Q
What is contained in an appointment document?
A
- Clarification of the work scope
- Agreed fee bid (aligned to workscope)
- Payment terms
- Terms of business
- Any agreed amendments to the terms of business
- Contact details
9
Q
What is meant by client care?
A
- Continuous process of concept or understanding clients requirements, suggestions, complaints etc. and analysing it to find a solution suitable to client requirements and to enhance service delivery. This can include.
- Understanding the clients needs & requirements.
- Complaint handling procedures
- Quality assurance procedures
- Key performance indicators
- Customer satisfaction questionnaire
- Looking out for their best interests (Client feedback forms)
- Client feedback meetings
- Lessons learned workshops
- Identify scope of service
- Defining the client brief
10
Q
Why is client care important
A
- Builds good reputation which leads to repeat work and recommendation to other clients.
- Reduces the likelihood of conflict protecting the companies PI insurance.
11
Q
What is a client brief?
A
- A document that captures the clients requirements.
- A formal document setting out the objectives and requirements of a completed project.
- Provides sufficient detail for the integrated project team to execute.
12
Q
What information would you expect to see in a clients brief?
A
- Services required.
- Insurances required.
- Terms of appointment.
- Fee.
- Duration of appointment.
- Identify client procedures and policies that need to be followed.
13
Q
When should you decline work for a client?
A
- Do not have the capacity.
- Conflict of interest exists.
- Do not have the required technical expertise.
- Client not prepared to pay the appropriate fee.
14
Q
A client wants to pay in advance for your services, how would you deal with this?
A
- Set up a separate account which is properly named and clearly identifiable.
- Refer to rule 8 for firm’s client money handling
- Clients must always have access to funds
- Provide the client with a statement.
- Inform the client of when and how much the monies will be drawn down, providing a statement each time.
- Once services are complete send a complete statement detailing all the transactions.
- Make sure everything done is transparent and auditable and money has been checked for laundering.
15
Q
What makes up a bid?
A
- Executive summary including a scope or solution
- The client’s needs and drivers
- Project issues
- Benefits for the clients and their experience
- Conditions of engagement and terms and conditions
- Methodology for delivering the work, information about the organisation, CVS of project team and examples of case study projects previously delivered
- Confirmation of proposed fees
16
Q
How do you avoid complaints from clients?
A
- Good record keeping.
- Clearly defined brief.
- Not acting outside the boundaries of your services scope.
- Always follow RICS guidance notes
- Good communication.
17
Q
How do you calculate fees on a project?
A
- Percentage based.
- Time charged.
- Lump sum.
18
Q
What forms of appointment documents are you familiar with?
A
- Company own
- Client issued
- RICS appointment
- JCT appointment
- NEC PSC
19
Q
What would you expect to see in an appointment document?
A
- Interpretation and definitions
- Scope of services
- Parties
- Obligations
- Personnel
- Collateral warranties and third party rights
- Copyright
- Insurances
- Assignment
- Novation
- Payment
- Clients duties
- Suspension
- Termination
- Consequences of termination
- Liabilities
- Notices
- Third party rights
- ADR
20
Q
What’s included within your companies T&C’s?
A
- Definitions and interpretation
- Appointment and duration
- Consultant obligations
- Clients obligations
- Variation or additional services
- Fee’s and payment
- Intellectual property rights
- Confidentiality
- Liability and insurance
- Termination
- Force Majeure
- Variation
- Waiver
- Severance
- Entire Agreement
- Assignment and subcontracting
- No partnership
- Rights of third parties
- Notices
- Counterparts
- Governing law and jurisdiction
21
Q
What is often contentious in T&C’s?
A
- Level of liability
- Every claims vs aggregate
- Payment terms
22
Q
How do you calculate fee’s?
A
- Percentage basis
- Cost per Hour vs time required at each activity
- Framework
- Cost reimbursable/ Time charge
23
Q
Can you give me an example of how you have calculated fees on one of your projects?
A
- Percentage basis: 2-5% of construction cost, cost per Hour vs time required at each activity, work out salary rates per hour, add overhead of 70%, add margin 8%
- Total rate per hour: multiply by number of days/hours required for each activity within each design stage
- Framework: As above but based on agreed framework rates, option exists to abate rates to be more competitive, agreed % of overall construction costs
- Cost reimbursable/ Time charge: based on transparent process on pre-agreed rates
24
Q
What are KPI’s?
A
- Key performance indicators: a measure of a factor critical to success
25
What is the purpose of KPI’s?
- The aim of KPIs is to provide a consistent measure of the organisational and project performance.
- These can be used against benchmarking figures with the intention of identifying shortcomings, leading to action plans to enable better results: by providing a simple method of establishing a performance management system, by providing organisations with a straightforward method of benchmarking their performances against others in the construction industry; and by allowing organisations to track long-term trends in performance.
26
How do you set up KPI’s?
- Planning: clearly establish what needs to be improved. Make sure it is important to you and your customers and determine the data collection methodology to be used (including any KPIs).
- Analysis: gather the data and determine the current performance gap – against a competitor, the industry or internally – and identify the reasons for the difference.
- Action: develop and implement improvement plans and performance targets.
- Review: monitor performance against the performance targets.
- Repeat: repeat the whole process. Benchmarking needs to become a habit if you are serious about improving your performance.
27
Does the JCT allow for KPI’s?
- Yes- Schedule 2- supplemental provision 9- Performance indicators and monitoring
- Employer shall monitor and assess contractors performance- KPI’s stated in the contract documents
- The contractor shall provide all relevant documentation on how they are achieving those KPI’s
- Where the contractor is not meeting them he will propose how he will achieve the KPI’s
28
Can you give me some examples of KPI’s?
- client satisfaction – overall
- client satisfaction – value for money
- client satisfaction – quality of service
- Client satisfaction - quality of timely delivery.
- Client satisfaction - H&S awareness.
- Reporting metric - on budget or better
- Reporting metrics - £/m² GIFA
- Reporting metrics - £/bedroom
29
What about Contractors?
- Construction cost- Improvement of capital cost year-on-year
- Construction time- Improvement of time year on year
- Predictability cost- Actual cost against the cost predicted at tender
- Predictability time- Actual time against the time predicted at tender
- Client satisfaction product- Client satisfaction with the delivered product
- Client satisfaction service- Client satisfaction with the service provided by the project team
- Defects- Impact of the defects of the final product
- Productivity- Value added per person working on the project
- Profitability- Profitability of the construction company
- Safety- Accident incident rate for the company
