Assignment Task
Activity 1: Develop budget
Additional scenario
As being new to role you wish to make a good impression to the owner by increasing business profits by 20% over the coming year. You will attempt to cut costs where possible by looking for ways to cut costs, avoid spending money on items that are not essential to business operations and increase cash flow.
There is a business that opened across the street in late March that has similar food but is more of a bar restaurant.
Your Task
Purpose
For this task, students are required to analyse financial and other business information to prepare and monitor budgets. Students are to draft and negotiate budgets, identify deviations, and manage the delivery of successful budgetary performance.
Role and participants
Operations Manager
Assume that you are a newly appointment Operation Manager. You are responsible for overseeing business operations.
Owner of the Business
The owner has recently stepped back from the business and hired an Operations Manager to fitful the role of the manager, including finance and operations management.
Head Chef
The head chef in charge of Feast of Flavours kitchen and is responsible for preparing the dishes and meeting the special customer request as per the order taken by the wait staff. The head chef is responsible to the kitchen team and the quality of products. They ensure that the kitchen performs as a team, as well as ordering and maintain food stock and interacting with suppliers. The Head Chef is responsible for designs and costing of menus in consultation with the Operations Manager.
Front of House Manager
The front of house manager is responsible for the effective running of the wait staff as well as the bar staff. They are responsible to ensure that customers are receiving fast and efficient service. They are responsible for ordering and maintaining beverage stock and interacting with suppliers.
Events Manager
The events manager is responsible for any events held at the restaurant. They must communicate with both the front of house and the kitchen when preparing for an event. The event manager ensures that any event runs smoothly through pre-planning activities and determining what the customer wants. They are responsible for creating project budgets for each event held at the restaurant in consultation with the Operations Manager.
Note: This assessment will occur under workplace conditions or in a simulated
workplace, whichever meets the RTO requirements
Tasks to be performed
Decide and provide a summary of what is to be achieved in the new budget from the discussion with the Owner upon commencing the new role. Complete the first section of the budget preparation report.
Review the previous budget and the business profit and loss statements and complete the budget preparation report including:
- Review any deviations and identify reasons for the deviation
- Provide a summary of the findings from previous records
- Research each aspect of the budget to determine expenses that could be decreased and list the sources
- Decide on whom you would consult with and why
- Identify the technique for estimating that will be used to develop the new budget
- Research and describe any external factors that could impact the budget in regards to growth, opportunities and other types of budgets that similar businesses are using.
- Research and describe any internal factors that could affect the budget in regards to staff, service levels, business objectives, and suppliers.
- Recommendations for improvements
Role-play meeting with the heads of the departments (Head Chef, Front of House Manager and Events Manger). Consult the team on the reason for the previous budgets variances, any upcoming projects (events), and any recommendations identified from the budget preparation report. Ensure you ask for their input and ideas (for the purpose of this task the Trainer/Assessor and two fellow students will play the roles of the heads of departments). During the role-play ensure that you:
Use effective communication:
- Speaking clearly and concisely.
- Using non-verbal communication to assist with understanding.
- Asking questions to identify required information.
- Responding to questions as required.
Act as positive role model:
- Have a positive attitude
- Provide information and experience to others
- Be patient
- Be encouraging and supportive
- Be caring and interested in staff growth
- Demonstrate knowledgeable and experienced and be committed to improving
- Be energetic and enthusiastic
Draft a Budget using the businesses standard format from the feedback from the meeting and findings from the Budget Preparation Report and email the draft budget to: the Owner, the Head Chef, the Front of House Manager and the Events Manager asking for feedback and agreement (for the purpose of this task the staff is your Trainer/Assessor.) Ensure that the email has no spelling or grammar mistakes, is professional and is written in a polite business style.
Include in the email:
- A copy of the draft budget
- A copy of the Budget Preparation Report
The owner reply’s to the email stating that the Professional memberships needs to be re-evaluated as it is no longer required to be as high as it is. The initial reason was due to being a new business and that the rental lessor has informed that the property rent will increase to $12,000 per month from the 1st of January.
The Events Manager reply’s to the email stating that they have just had a new event booked for next month that will generate an income of $38,000 and COGS will be $7,835.
Make the required changes to the budget and send an email to the Owner to gain approval (for the purpose of this task the staff is your Trainer/Assessor.) Ensure that the email has no spelling or grammar mistakes, is professional and written in a polite business style.
Include in the email:
- A copy of the finalised Budget
The owner replies that they approve the finalised budget.
Email the final budget to each head of departments separately (for the purpose of this task each head of department will be your Trainer/Assessor.) Include in the emails any information they will require to apply to their work roles or work area. Include if they are any reporting or financial management responsibilities that they will have to comply with, such as provide invoices each Friday (the financial policies and procedures will assist with this information as well as what was agreed on during the consultation meeting in regards to recommendations). Ensure that the email has no spelling or grammar mistakes, is professional and written in a polite business style.
Include in the email:
- A copy of the finalized Budget
Activity 2: Monitor and review budget
Additional scenario
It has been twelve months since the 2023 Budget was created. The budget will need to be analysed against the actual amounts.
You have also been informed that the Events Manager will be going on maternity leave early next year and that the business across the street is closing for renovations in February and will be closed for four months.
Input the actual figures to the budget developed in the previous activity. The actual figures are:
| July | Aug | Sept | Oct | Nov | Dec | Jan | Feb | March | April | May | June | |
| SalesFood | 34600 | 23000 | 49800 | 49800 | 52000 | 98000 | 45600 | 25600 | 29600 | 37800 | 23500 | 38000 |
| Sales Bev | 28900 | 32100 | 44900 | 44500 | 56800 | 86500 | 42000 | 21600 | 31050 | 36200 | 32000 | 39500 |
| Events | 38000 | 42000 | 42000 | 38000 | 30000 | 37500 | 10000 | 40000 | 65000 | 36000 | 35800 | |
| COGS Food | 21300 | 22600 | 22100 | 36200 | 43500 | 74500 | 36800 | 18600 | 26650 | 19500 | 22500 | 315200 |
| COGS Bev | 15600 | 24500 | 26000 | 19800 | 48200 | 69000 | 32000 | 17560 | 27800 | 21300 | 26000 | 31400 |
Assume all other expenses are the same as the budgeted amounts except repairs and maintenance in March is $145 as the blender needed to be replaced in the Bar and wages for November and December were 12% higher than budgeted due to service levels and staff calling in sick and staff turnover.
Your Task.
Purpose
For this task, students are required to analyse financial and other business information to prepare and monitor budgets. Students are to draft and negotiate budgets, identify deviations, and manage the delivery of successful budgetary performance.
Role and participants
Operations Manager
Assume that you are a newly appointment Operation Manager. You are responsible for overseeing business operations.
Owner of the Business
The owner has recently stepped back from the business and hired an Operations Manager to fitful the role of the manager, including finance and operations management.
Head Chef
The head chef in charge of Feast of Flavours kitchen and is responsible for preparing the dishes and meeting the special customer request as per the order taken by the wait staff. The head chef is responsible to the kitchen team and the quality of products. They ensure that the kitchen performs as a team, as well as ordering and maintain food stock and interacting with suppliers. The Head Chef is responsible for designs and costing of menus in consultation with the Operations Manager.
Front of House Manager
The front of house manager is responsible for the effective running of the wait staff as well as the bar staff. They are responsible to ensure that customers are receiving fast and efficient service. They are responsible for ordering and maintaining beverage stock and interacting with suppliers.
Events Manager
The events manager is responsible for any events held at the restaurant. They must communicate with both the front of house and the kitchen when preparing for an event. The event manager ensures that any event runs smoothly through pre-planning activities and determining what the customer wants. They are responsible for creating project budgets for each event held at the restaurant in consultation with the Operations Manager.
Note: This assessment will occur under workplace conditions or in a simulated workplace, whichever meets the RTO requirements
Tasks to be performed
Compare the budgeted verse actuals over the last 12 months by inputting the information provided in the scenario into the finalised budget developed in Activity 1
Complete the business year’s profit and loss statement from the actuals.
Prepare a budget analysis report, that evaluates the:
- Budget performance from comparing projected budget and actual budget
- Deviations from the budget
- Reasons for deviations
- Recommendations for next year’s budget based on performance and changes that will affect the budget as provided in the additional scenario.
Email the Owner and provide a summary of your analyses (for the purpose of this task the staff is your Trainer/Assessor.) Ensure that the email has no spelling or grammar mistakes, is professional and written in a polite business style.
Include in the email:
- A copy of report
- A copy of the completed budget including the actual figures
- A copy for the years profit and loss