Undertake a critical evaluation of an Entrepreneurial (Small, Medium or Large) Australian business. Essay Example
Small Business Evaluation in Western Australia 3
Small Business Evaluation in Western Australia
The important elements in business formulation should be well reflected in a professionally drafted business plan of the organization. This is an important tool in evaluation of a newly established business since it serves as a measure of how best a new business has been able to achieve its objectives. The basic component of the business plan should include the following;
The mission statement capturing the entrepreneur’s vision of what he is trying to articulate, a business description touching on the company’s products and services, how his products are different and why he believes that he is going to achieve the market share from the competitors. A market analysis is the next important tool and should discuss the possible challenges, entry behavior, business SWOT analysis, external and internal environment and finally the market share that the proprietor believes he can secure.The management of the section should describe the managerial team including their professional training and experience. A cash flow statement should then follow describing the future growth, current needs, and possible revenue projections.
Evaluation of a business is a vital practice in management, an equivalent in bigger businesses known as company valuations. It is company evaluation is done in quest to acquire the monetary value of a company. The different methods used in measurement of a company’s worth may give a wide range of different results as the approaches may differ. Some methods rely on financial statements while others depend largely on the revenue generated by the company or the average amount of money that buyers are willing to spend for full acquisition of the company’s assets, and clients depending on the type of company (David J., 2011).
The net worth of a company may be used to deliver evaluation. It involves an analysis of the company’s financial records like the balance sheets. The balance sheet is a record of the company’s assets and liabilities and forms a basis of evaluation of the company’s worth. The assets constitute the items or gadgets that a company uses to generate its revenue. This may include equipments, intellectual properties and software depending on the type of company. The liabilities on the other hand reflect what the company owes other institutions such as bank loans, accounts payable credits and so on. The company’s net worth is obtained by calculating the difference between the assets and liabilities ( Hoggarth & Comfort 2010). .
The other method used in determining a company’s value is the comparable company analysis method. This method involves comparing a target company to a similar company in the market. The value of the competitor gives the evaluators a benchmark for the potential value of the firm targeted. This may involve such factors in the two companies as their entry behavior in the industry, the individual market share, managerial approaches and the economic forces under which the company exists.
The analyses of leverage ratios involve the analysis of debts. Most small companies use debts to finance their startup operations and expansion. Analysis of the ratios between a company’s debts to the other business facets helps the evaluators to estimate the debt load that a company carries. Examples of leverage ratios are; debt to equity ratio, debt to assets ratio, and the interest payouts to the cash flow. More complex leverage ratios include interest payout to earnings before interests, taxes, depreciation and amortization (EBITDA). Most investors use this analytical method typically viewed as high-risk, high reward opportunity (David J., 2011).
Income analysis is also a key factor in small business analysis. The ability of a business to generate income is in most cases its primary goal in the market. It is the single most success factor in an industry. A strong cash flow for a company represents an excellent opportunity for investors and therefore a higher value on the business or so will be the bids incase a business is being sold. Similarly, evaluators are likely to examine each foundation of this income for abundance, reliability, and overhead in determining the possible returns of potential investments.
An important human resource practice is employee evaluation which gives the employees and managers an ample moment in reflecting the past, exchange of ideas and learning new methods towards relations, strengths and weaknesses of different employees. This is an important part in employee professional and work career development. An example of practice based on this is the annual evaluation adopted by most companies the level of motivation and strength on the staff similarly is an asset as opposed to poorly motivated and less trained workers who are likely to reveal poorer results. Similarly assessing the academic training, professional research or works of a particular staff is likely to be a win for the company in terms of worth.
The business of choice for evaluation was business.gov.au an Australian web based information solution site which forms a source of information on all Commonwealth, federal and local government undertakings and online forms and tools for business aid. It is aimed at aggregating information and government transactions from the three levels of government and provision of updated information pertinent to the three levels of government.
The recommendation proposing its evaluation was placed in 2004 arguing that the performance of business.gov.au needs to undergo regular and routine evaluation. In 2007-2008 the evaluation was conducted contracting of an independent specialist team from the department of Innovation, industry, science and research assisted by policy and initiative operators in conjunction with specialists who undertook a specific economic modeling with an aim to contextualize and inform the findings of the evaluation.
The evaluation team focused on the appropriateness, efficiency integration, effectiveness, strategy policy alignment and the performance assessment of the institution targeted. The attention was particularly focused on the issues of the ability of the institution to reach stakeholders with limited or no access to Information Communication technology (ICT) especially in the rural Australia, future initiatives to be considered to meet the expectations of the target communities, and internal comparative analysis.
The methodology used entailed a thorough comprehensive desktop review, detailed report analysis, market research consultations with the stakeholders, among other qualitative data. The methods of data acquisition were use of questionnaires and interviews where applicable .Over and above, the evaluation reported data comprising of annual, quarterly and monthly performance reports. The evaluation group sought advice from a Reference Group consisting of departmental experts.
The overall evaluation discovered that business.gov.au was among other benefits, able to deliver valuable services to the business communities, well appreciated by business professionals such as financial advisers and accountants. Most interviewees described the resource as being efficiently delivered, with responsible competent employees therefore an evident praise. Analytical findings revealed that every single dollar invested in the institution had a great positive impact to the business community in time and the efficiency gains were tenfold.
Upon evaluation of business.gov.au from an international perspective, it was found that pat the time, it was competitive in terms of reach and scope. Similar comparable initiatives had been put in place to improve the information flow and reduce regulatory burdens faced by the business showing that the international governments made attempts to remedy the shortcomings of the institution.
The evaluation analyzed whether the institution business.gov.au was able to provide services that with its elimination, could be done by the private sector. The analysis revealed that even if it is possible to offer such a service privately, it would require a paid regular subscription. Moreover, many clients at the time would not have enough the funds to use its paid services. Some companies also feared a possible bias and favor to a particular competitor (Department of Innovation industry Science and research. (2002). .
Further, the assessment found that no individual substitute in the government authority would be in a position to offer a service comparable to it whatsoever, whether in terms of its reach, content or fairness. This was ascertained from extensive consultations with both public and private institutions. This assessment found that despite the policy objectives of the institution being well acknowledged, it would be suitable at that particular moment, owing to the change of Government, a reaffirmation to its mandate being performed.
Presently, it is justifiable that the institution, business.gov.au, is capable of identifying areas with duplicative or overlapping regulation but is not capable of reducing the number of business regulation cases. Despite so, the evaluation discovered that the initiative is a vital tool in reduction of the burden related with both detecting and complying with the aspects of regulation in administration. Although the main indicators of performance are at a large-scale being met, the study discovered that they could be enhanced so as to more efficiently measure whether the program is capable of reducing the authoritarian and fulfillment burdens faced by most organizations.
From the evaluation, business.gov.au was found to be generally and socially inclusive since it provides services that are vital in enhancing social justice. This was emphasized by the program’s ubiquity of the information given, universal accessibility and the assistance that it gave to those who were not strongly positioned within the economic margins of the country.
It is goes without saying that business.gov.au is able to deliver a valuable and useful a service to the business community and professionals in Australia. Addressing a considerable market gap, and doing it in a successful and cost effective manner. This evaluation considers that there is a justifiable case in continuation of its operations (Department of Innovation industry Science and research. (2002).
Department of Innovation industry Science and research. (2002). http://www.industry.gov.au/industry/ReportsandStudies/Documents/EvaluationofBusinessgovau.pdf. Available: http://www.industry.gov.au/industry/ReportsandStudies/Documents/EvaluationofBusinessgovau.pdf. Last accessed 21st Apr 2014.
David J. (2011). Predictive evaluation ensuring training delivers business and organizational results. San Francisco: Berrett-Koehler Publishers.
Hoggarth, (2010). Hoggarth Liz, and Hilary Comfort. A practical guide to outcome evaluation. London: Jessica Kingsley Publishers, 2010. Print.. London: Jessica Kingsley Publishers.
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