M02 - Business Planning Flashcards
What is a business plan and why would you need one?
- Formal statement of business goals, reasons they are attainable, and plans for reaching them
- Primary reason for a business plan is to help raise capital/funding
You become chartered tomorrow and decide to start your own business. What do you need to do it?
- Advise RICS that you are starting a business
- Register business
- Inform HMRC
- Insurances - Professional Indemnity / Directors & Officers Liability / Buildings insurance
- Company and Client bank accounts
- Complaints Handling Procedure
- Abide by Rules of Conduct for Firms
You mentioned in your summary of experience that you help to prepare bids. How do you put together a fee? What would be the average percentage you include?
I would assist preparing bids normally from a ‘bottom up’ method, apportioning hours of work against rates and people and building it up that way. I would then benchmark the amount against the project budget. Professional fees in my experience on projects normally come in around 8 - 12%, with the QS portion of that being 0.5 - 3%
How will the construction industry change in the next twelve months in your opinion?
- I believe the industry will keep making steady progress, and with more confidence in the overall state of the economy
- Lenders will again feel comfortable financing projects
- Growth may not be consistent all over, with regions perhaps moving slower than main trade centres
- Good signs locally with numerous tower cranes in the city centre
What % of level of fees would you quote a Client for initial guidance?
- if 10 - 12% was total professional fee for all disciplines, QS fee could be 0.5 - 3% of that depending on project size & scope
Could there be any issues with having all services delivered by one company?
- Harder to be critical of colleagues than team members in other companies
- Perceived conflict of interest in regards challenging designers
In terms of record keeping, what can have an impact on how long documents are stored for?
Limitation Act 1980
- Under Hand = 6 years from date of Practical Completion
- Deed = 12 years from date of Practical Completion
What is a short term goal?
Company 5 year plan
Example of a long term goal?
To become a market leader in a chosen sector
i.e Modular, cut and carve project.
What goals/objectives if you had your own company?
- Conduct business in a professional manner and as per ethical standards
- Provide high standard of service
- Maintain and grow Client base
What do you need to consider when appointed by a Client?
- Scope/brief
- Price
- Insurances
- Form of contract
What are your future career aspirations, should you be informed that you have passed?
- I would like to climb the ladder in my current company and reach Associate level in 5-10 years
How does a business identify its ‘needs’?
- A business strategy can be produced – to understand long term goals
- Identify stakeholders and their needs
- Carry out SWOT analysis
What is an Investment Appraisal?
Techniques used to assess whether a business / project would be a worthwhile investment:
- Payback period
- Rate of Return
- Discounted Cash Flows
- Net Present Value
What do you understand by an outline business case?
- It is an early reporting of the reasoning for initiating a project or task
- Information could be the background of the project, the expected business benefits, some basic options considered (with reasons for rejecting or carrying forward each option), basic estimates of the costs of the project and the expected risks
- Consideration would also be given to the option of doing nothing including the costs and risks of inactivity
- From this information, the justification for developing the project further until a Final Business Case can be submitted is derived
