Grow Management Consultants

Case Study – Grow Management Consultants

Overview

Grow Management Consultants is a small management consultancy business specialising in leadership development services. The company offers a range of services to assist companies to assess leadership behaviour of existing managers and performance metrics. They also design and implement customised leadership programs based on the assessment. Services are offered Australia-wide.

The company employs a General Manager (you), 2 Principal Consultants (who are also Directors), 1 Senior Consultant, an Administration Officer and Receptionist.

Over the last two years, the company has diversified, and now offers regular professional development workshops on all aspects of leading and managing staff. These workshops are conducted approximately every 3 months in all major cities including Sydney, Brisbane and Melbourne. In 2017 – 2018, the company ran a total of 36 workshops. The company has also recently produced an E-book about leadership techniques.

The intention is to replace the workshops with the annual conference in the next financial year, as the workshops were not well attended. Client feedback and continued business indicates a personalized, company focused approach in the form of consulting services is the service of choice.

The E-book has had reasonable sales, but there needs to be a wider selection of books, as well as more marketing. The plan is to generate $10,000 worth of sales for the e-books during the next financial year and increasing over time.

As the General Manager for the company and with responsibility for finances, you are currently completing the financial planning for the year ahead. This involves a review of the company’s business plan, previous year’s profit and loss statement, the current business plan and strategic directions and cash flow statements. Based on the review, you will be establishing budgets and allocating funds.

In developing the budget, you are to assume a 5% increase in expenses, as well as a 10% increase in sales for consulting services and executive search.

As set out in the business plan, the company plans to run an annual conference each year starting in 2019. The costs for the conference have been estimated by the Principal Consultant and are set out in the Estimated Costs and Income document. Conference attendance is aimed at 100 people paying $750 each.

The Principal Consultant has also asked you to review the current accounting software used by business. The company is currently using MYOB but as it has grown, the Principal Consultant wishes to review whether this is the best accounting software available for their needs. He has also requested that the software have a cloud feature.

With the growth in the client base, The Principal consultant has identified the need for an Account Officer to join the team. Additionally, as this will be a very busy and crucial role, it’s decided that this role is going to be available as a job share arrangement between two individuals. The position will be shared and offered as a 5-day fortnight role to each candidate. The idea is that this role will take away some of the administration from Paul Burns himself and assist the Client relations manager in the

Strategic Plan

2020 – 2024

Grow Management Consultants

Welcome

Welcome to the Strategic Plan for Grow Management Consultants.

This document sets out our vision for the next three years and how we hope to achieve it.

We hope you enjoy reading this document.

Paul Burns

CEO

Grow Management Consultants

Executive Summary

Established in 2010, Grow Management Consultants is a management consultancy company specialising in providing services to companies to assist them to improve the leadership performance of their staff. Grow Management Consultancy draws on its up-to-date knowledge and skills in best practice leadership concepts to assist clients with leadership performance

Mission Statement

Grow Management Consultants are committed to promoting individual and organisational leadership excellence. We do this by providing mentoring training, coaching, consultation and program evaluation; offering cutting edge tools, resources and expert advice; sharing best and next practices; leading organizations through the process of creating a leadership culture; and, recognising and celebrating excellence in leadership.

Our values are:

Core values underpinning our activities are:

Quality

Innovation

Respect

Reliability.

Business goals

Income from consultancy fees should increase at least 10% annually

Generate $10,000 worth of sales for the e-books during 2021, with a 10% increase yearly.

Second e-book to be written by December 31, 2021.

The executive Search Service should generate at least $120,000 in 2020/21, and increase at least 10% annually

Hold an annual conference, the first in February 2020, which should run at a profit.

Strategic Priorities

To be well led, high performing, profitable and accountable

Ensure that all financial operations, performance indicators and results support the strategic policies

Identify new and expand existing sources of revenue, including establishing a training college to offer accredited training in leadership

Achieve profits of at least 10% per annum.

Develop services to meet customer needs and aspirations

Increase range of services offered to include change management and diversity

Plan for and establish an annual conference, starting in 2021.

Increase range of e-books commencing with Organisational Change e-book to be published during 2021.

Continue building deeper customer relationships

Customer-centred practice, with a focus on meeting their total needs for a high quality home

Strengthen the skills of our people, to better support customers

Drive innovation to better meet customer demands.

Attract, engage and develop the best staff

Continuing the drive to a customer centred, high performance workforce and culture

Strengthening the skills of our people, to better support customer needs

Empowering innovation and responsiveness to change

Continuing to enhance the diversity of our workforce.

Employing additional consultants

Employing an Account officer to support our office team and provide better service to our customers

Developing our human resources by implementing a formal human resources framework

Exploring the use of technology in human resources.

The Market

The Management Consulting industry has grown weakly over the past five years. Poor demand from downstream markets constrained industry revenue growth, with financial services and resources firms cutting spending on management consultants due to economic uncertainty and falling commodity prices.

However, businesses using management consultants to introduce new business processes and enhance operating efficiencies have partly offset this trend. Industry operators have also increasingly incorporated analytics into their services, which offer clients greater understanding of their business and clients. Demand for services backed by analytics is expected to contribute to growth of 3.8% in 2020-2021.

Research also shows that there is a need for workers to have strong leadership and management skills to support collaborative management, managing teams for a distance, empowering others and business acumen. Thus the demand for leadership consultancy services is still strong.

Situation Analysis

Strengths

Weaknesses

Value and quality

Strong management

Customer loyalty

Friendly organisational culture

Level of available finance for investment

Brand name not developed as yet

Small organisation

Opportunities

Threats

Leadership skills in demand

Opportunities to offer a range of services

High level of competition

Economic downturn meaning less spent on consultants

Failing to satisfy clients demands

Marketing Strategies

Our marketing strategies aim to:

build our brand

generate leads now

help to convert those leads quickly

form ongoing relationships and referrals.

We plan to develop our market share by:

Improving our marketing and advertising

Continually improving the quality of service given to clients

Maintaining effective communication channels with all stakeholders to ascertain industry requirements and then develop products and manage services accordingly

Continually improving communication channels with all our stakeholders, ensuring a flow of timely and accurate information to facilitate effective planning and decision making

Targeting identified growth markets with planned, market appropriate campaigns employing a variety of promotional strategies and advertising mediums

Offering attractive fee structures to our clients

Continually improving the skills, knowledge and effectiveness of Grow Management Consultants through our commitment to training and development

Regularly reviewing the effectiveness of all our operations and making improvements when and where necessary

Operational priorities

Design and develop a monthly newsletter to send out to all clients (Responsibility: Principal Consultant; Timeline: newsletter to be in operation by September 2021)

Create a blog page on web site to provide regular latest news (Responsibility: Principal Consultant; Timeline: immediately)

Employ new full-time Accounts Manager (Responsibility: Principal Consultant/Human Resources Manager; Timeline: Accounts Manager employed by July 2021)

Offer senior consultants the opportunity to become permanent employees (Responsibility: Human Resources Manager; Timeline: Permanent status finalized by end June 2021, contracts revised)

Recruit two new senior consultants on a contract basis (Responsibility: Principal Consultant/Human Resources Manager; Timeline: New senior consultants appointed by August 2021)

Conduct research on the use of social media in human resources recruitment and identify incorporation into human resources practices.

Grow Management Consultants Financial management Policy and Procedures

Grow Management Consultants Budget Policy and Procedures

Purpose of the Policy

Grow Management Consultants will operate in a financially sustainable manner balancing revenue and expenditure.

Our financial planning process are as follows:

Financial objectives set for each year.

Budgets set for each year.

Procedures

Budgets are set for each applicable department. Budgets are based on expected sales and expenses. Budgets will be set by the finance team. Each manager must review their budget and may contact the finance team for any revisions. They must present a clear argument for any changes.

A contingency amount is usually included in each budget to account for unexpected costs.

Managers are expected to inform their team of the budget and to provide them with the required resources and systems so as to fulfill their roles. Generally this will include regular meetings to monitor the budget. Team members are expected to report all expenses to managers by providing receipts and so on.

Budgets should be monitored by each Manager every month using our accounting system, Quickbooks, to make sure expenses are on track. Where changes are required, the finance team may be contacted to discuss this. This should also include where contingency amounts need to be varied.

Each manager must review their budget amount versus actual amount at the end of the reporting period. Variances of up to 5% over budget are acceptable. Differences between actual and budgeted amounts must be described, as well as justifications for such.

Grow Management Consultants Finance Authorisation Policy and Procedures

Purpose of the Policy

All finance transactions as noted in this policy are to be authorised by the noted authorised person prior to the transaction being undertaken.

This policy is to be read in conjunction with other specific finance policies where relevant.

Procedures

Prior to any of the following finance transactions being undertaken, the authorising person noted must authorise the transaction.

Where additional policy is noted, this policy must also be adhered to when undertaking the finance transaction.

Finance Transaction

General Manager/CEO

Bank Accounts

General Manager/CEO

Issuing Petty Cash

General Manager

Business Credit Card

General Manager

Authorising New Customers

General Manager

Authorising New Suppliers

General Manager

Purchasing Stock

General Manager/CEO

Purchasing Assets/ Equipment

General Manager/CEO

Debt Collection

General Manager

Payment of Invoices

General Manager

The General Manager is to report to the CEO on a monthly basis regarding profit and loss and cash flow.

Petty Cash Policy

Purpose of the Policy

Petty cash should be used to pay for small business expenses up to $100 where payments through accounts payable or credit card are not justified or appropriate

Procedures

Issuing Petty Cash

Petty cash vouchers must be completed before any cash is taken from the petty cash float.

Only up to $100 can be disbursed at any one time.

All petty cash vouchers issued must be approved by a Senior Manager.

Once the petty cash is spent, a receipt or invoice should be attached to the voucher and returned to petty cash with any balance of monies unspent

All completed vouchers must have the following details included:

Issue date of voucher;

Name of person who issued the voucher;

Amount of monies disbursed;

Details of expense;

Invoice or receipt

Signature of approval person

Reconciling Petty Cash

Petty cash float is to be reconciled at least monthly. This is the responsibility of {insert relevant job title here}

All petty cash expenditure must be entered into the financial system once the petty cash has been reconciled.

The balance of monies and vouchers must equal the petty cash float amount before reimbursement can be made.

Reimbursement of petty cash will be authorised by a Senior Manager.

Use of Business Credit Card Policy

Purpose of the Policy

This policy provides guidelines for the issue and use of business credit cards.

Procedures

An employee will only be issued a credit card once the Credit Card Authorisation Form has been completed.

The business credit card can only be used for travel, authorised entertainment and purchases of small value expenses or equipment up to the value of $500.

No cash advances are to be taken using the business credit card unless authorised by the Finance Manager.

Where a business credit card is lost or stolen, the owner of this card is to notify the Finance Manager, who is responsible for notifying the issuing agency and ensuring the card is cancelled.

The business credit card is not to be used for personal expenses.

All holders of business credit cards are required to reconcile the monthly credit card statement to the expense form, attach all receipts for payments made on the credit card and have the expense statement authorised by the Finance Manager.

Upon completion and authorisation of the monthly expense statement, these documents are to be forwarded to the Finance Manager for payment of the credit card statement.

All business credit cards are to be returned to the business when the person is requested to by the Finance Manager or where they are no longer an employee of the business.

New Supplier Policy

Purpose

All new suppliers to the business must be reviewed and accepted in accordance with this policy to ensure that the supplier service is aligned with the business objectives.

Procedures

Choosing a New Supplier

A new supplier must provide our business with quality products, great service, competitive pricing and efficient delivery.

The following information table must be completed prior to agreeing to services

Supplier Selection Background Information

Business Name of Supplier:

Location of Supplier:

Products/Services provided by supplier: (Attach a list if necessary)

Name of business owner/ sales representative:

For how many years has the supplier been trading?

Supplier Selection Review Checklist

For each new supplier being considered the following checklist must be completed:

Is the supplier pricing competitive?

What are the payment terms for this supplier?

What is the return policy for this supplier?

Does the supplier provide warranties, guarantees etc.?

Are the suppliers’ representatives knowledgeable of the products/services and industry?

Is there an alternative to this supplier, has the alternative supplier been considered?

What are the delivery services of the supplier?

Has a credit check been undertaken for the supplier? (attach to this checklist)

Has the Personal Property Securities Register (PPSR). been reviewed?

Has the supplier been trade checked? (attach this to this checklist)

Insert relevant additional information to assist in the decision of appointing a new supplier

Appointment of Supplier

The appointment of a new supplier will be authorised by the Finance Manager.

All relevant details of the supplier will be entered into the financial system by Administration Assistance once approval is obtained from the Finance Manager.

The Finance Manager will review information entered into the financial system and independently verify the bank account or other payment details of the supplier to ensure payments made are to the correct supplier

Supplier Payment Terms

All purchases from suppliers must be supported by a purchase order.

Payment terms for all suppliers must be reviewed by {Insert relevant job title here} every {Insert timing of review here, recommended at least once a year}. Following this review each supplier must be approached to seek improved payment terms by Finance Manager.

All supplier payment terms must be a minimum of 30 days.

Any variation to the above must be authorised by Finance Manager.

All supplier payments are to be reviewed once a quarter to ensure that payment terms are adhered to. For payments made to any suppliers earlier or later than the agreed terms. The Finance Manager will prepare a report that details the reasons why payment terms have not been adhered to.

This report will be reviewed and authorised by the CEO.

Please review this report in order to be able to complete Section 3 of your Portfolio.

Profit and loss and cash flow review

It is now 1 year later, and you are required to review the profit and loss account for 2020 – 2021, as well as the Cash Flow Statement.

The Principal Consultant has asked you to review the conference costs, as the conference will not be repeated if it continues to lose money. Revisions need to be made to the conference budget and the conference fee increased to make it profitable. The review will be submitted to the company’s management as a bid to host the conference again.

To ensure that the revised conference budget is accepted with confidence by management, you are required to state the source of the data that you use. This will make it easier for them to be checked and verified.

The Principal Consultant would like you to propose a cost-covering conference fee given a 10% increase in all the recorded costs for the conference as shown in the profit and loss statement (and that match the conference costs for the document you reviewed in Assessment Task 2) and assuming 70 people will attend the 2022 conference. The Principal Consultant would like a 20% return on the conference costs.

The Principal Consultant has also advised on the following general issues concerning budgeting:

Monthly monitoring missed on three occasions.

Staff report difficulty in understanding how to monitor budgets.