business practice for complementary therapies -...

Aromalyne Training Business Practice for Complementary Therapies (ABC)

Christina Lyne Ltd©2014

Business Practice for Complementary Therapies

Key Business Criteria Required for Complementary Therapies (Learning Outcome 1) LEGAL REQUIREMENTS There is a legal responsibility to protect the health and safety of your staff and other people – such as customers and members of the public. Many of the Acts have been included in the Health, Safety and Hygiene Unit. However, the following deserve a special mention. Trade Descriptions Act 1968 and 1972 Any statement about the properties of goods or the nature of services offered which is false, misleading or inaccurate can give rise to prosecution. Therapists must give accurate information at all times about the treatment and its benefits. We must not say that our therapy can cure a skin disorder if that information is inaccurate. Relevance for therapists:

we would not claim to cure

we would not make false claims of an ability to diagnose specific ailments

we would not make false claims as to the service offered

we would not make false claims about the effectiveness of a treatment

Prohibited Appellation Legislation This legislation is in two parts:

Statutory Instrument – the purpose of this legislation is to allow the public to distinguish between those who are professionally qualified and those who are not. The law makes it a criminal offence for anyone who does not hold the appropriate qualifications to use any of the titles below or to use any other title or description which suggests that he or she is on the statutory register of the persons who hold those qualifications. The titles are: Chemist, Chiropodist, Dental Practitioner, Dental Surgeon, Dentist, Dietician, Doctor, General Practitioner, Medical Laboratory Practitioner, Midwife, Nurse, Occupational Therapist, Optician, Pharmacist, Physiotherapist, Radiographer, Remedial Gymnast, Surgeon, Veterinary Practitioner, Veterinary Surgeon.

Serious Ailments List – it is illegal to advertise to treat the diseases on this list. Brights disease Cancer Cataract Diabetes Mellitus Epilepsy Glaucoma Locomotor ataxy Paralysis Tuberculosis Relevance for therapists: There is no problem treating a client for the above diseases, we must not advertise that we can treat them.

Business Practice Handout - 2011 1

INSURANCE Insurance is always advisable when running any business and is in certain cases legally necessary eg Employers’ Liability Insurance. Essentially, business insurance falls into two categories: the compulsory and the optional. There are three types of mandatory insurance. Any business that employs staff must have employers' liability insurance. Any business that runs company cars or vehicles must have motor insurance. And any business that operates in certain professions, such as the law or providing treatment on the public, must have professional indemnity and public liability insurance.

Public Liability Insurance is needed to protect clients if they have an accident. It is known as the ‘trip or slip ‘cover. If a client were to slip or fall and hurt themselves, they could be seriously injured. The therapist could be sued for an allegation of negligence. The therapist has a responsibility to ensure that premises are safe and any potentially hazardous items are not left lying around.

Professional Indemnity covers the therapist should they be accused of neglect or injury to the client, maybe resulting in loss of earnings.

Enhanced Motor Insurance: this may be required if using a private vehicle for business purposes, other than to travel to and from work.

Employers Liability Insurance places a duty on employers to take out and maintain approved insurance policies with authorised insurers against liability for bodily injury or disease sustained by their employees during their employment. An employer must be insured for at least £2 million in respect of claims arising from one occurrence.

Of course, a business may also want to look at protecting itself with other, non-compulsory insurance. These might include cover for equipment, interruption to business, goods kept in stock, goods in transit, money, loan repayments, product liability, partnership protection, health, critical illness and legal expenses.

Household / Contents Insurance is needed if the therapist is working from home. A standard household policy will cover such things as fire, overflow of water, explosion, malicious damage, theft, etc. Most policies offer an extension for accidental damage such as staining, breaking, tearing and scratching insured items. A standard household policy is intended for a home which is occupied residentially. Many insurance companies will not provide cover where there is business use, especially not if members of the public are routinely coming in. Some insurers take the view that the risk changes, so it is important that the therapist advises his/her insurer and that they preferably obtain a satisfactory response in writing, otherwise a claim will almost certainly be invalid. Practitioners working from home should give special attention to the terms of their lease or other title deeds and any local government regulations limiting such practice or requiring the premises to be licensed. The Trading Standards and Environmental Health Departments of local authorities have a variety of information leaflets on legislation.

Personal Accident & Sickness Insurance is important if a therapist is unable to work because of an accident and has no other source of income. Cover can be arranged for ‘personal accident ‘which tends to be relatively inexpensive, or for ‘personal accident and sickness‘, which tends to be more expensive. These types of policies generally provide world-wide cover and they typically pay out for up to two years. This can help with monthly commitments such as a mortgage, rent, utility bills and every day living expenses like food and clothing.


Business equipment / stock Insurance is necessary if a healing centre is being set up. Items such as massage tables, computers, telephone, copier, music centre, desks / chairs, carpets, curtains, etc are covered and these kind of policies provide loss or damage cover on all contents, plus money, business interruption ( following a fire, etc), glass / sanitary ware, breakage, etc. It is sensible to arrange cover wherever the therapist is working in the UK, including at clients’ houses and while transporting equipment in the car. It may come as a surprise, but a lot of massage couches are an attractive target for a thief and many have been stolen from unattended vehicles. MARKETING

The first thing any business needs to understand is how the market they operate in works. The term marketing is frequently used, but rarely understood. It is not just about advertising. Marketing is about:

Identifying customer needs and meeting them

Anticipating what customers and potential customers will want in the future

Satisfying the demand profitably (and making sure that customers don’t have an excuse to use another business) This is often summarised as the “4 P’s”

Product – understand the product or service

Price – be clear what price to offer the product or service and why

Promotion – know how to promote

Place – know the best place to promote

Before anyone takes the decision to start up a business, it is absolutely vital that they understand the market they are planning to operate in. Market Research All businesses will need to carry out some market research to assist them in the development of their business initially, and into the future. The following questions need to be asked: Where are they trying to sell their services or products? Is the geographical area local, regional or national? Who will buy the products or services that they offer? Who buys their competitors’ products or services? What are their potential customers’ current and future needs and wants? How can those needs and wants be satisfied? Is the business capable of providing products or services that their customers and potential customers will value? How much are people prepared to pay for the product or service? What sales levels can the business realistically forecast? (How do they know?) What makes the product or service different from everybody else’s? Why do some people continue to buy from the business and others change to another supplier? What would happen if the business raised or reduced prices? What would happen if the business increased spending on advertising? What image does the business have? Is this the image that it wants and needs? Does it need a different image and is it possible to change it?


Unique Selling Point (USP) All business owners and their employees would be able to answer the question: “why should a customer see this business rather than another?” To a certain extent this is asking them to decide exactly what they are selling. For someone operating their own small business the answer is “yourself”, but this is too simplistic, and they need to be clear in their own mind what benefits they are offering to the customer. These key benefits might include: Their skills and knowledge The quality of their service skills The quality of the products that the business sells or uses and the service that it provides The prices that they charge The value for money that their work represents Being able to provide the service at a time and place convenient to the customer Their honesty and integrity The uniqueness of what the business offers The range of choices available to the customer When someone representing the business speaks to a potential customer they will need to be clear in their own mind what they are selling and what marks their offer as different from their competitors. Competitors There are two reasons why it is important for any business to know as much about its competitors as possible:

So that it can create barriers to protect itself from them

So that it can meet the needs of potential customers in a different way The business will therefore need to know: Who their main competitors are The products and services that they supply Their size, and whether they operate locally, regionally or nationally What customers like or dislike about them Why the customers might prefer them What their strengths and weaknesses are Where their competitive edge lies Whether it is possible to compete with them (on occasions it is important to recognise that competing with some businesses in particular markets is unlikely to be a successful venture and will result in business failure) Promoting a Business Once the business has decided exactly what it is trying to sell and whom it is trying to sell to, it is in a position to decide how best to promote its service or products. The individuals responsible for this aspect of the business’s operations have a wide variety of promotional methods at their disposal. It is therefore important they are clear at which section of the market they are aiming each of their activities. It is also worth remembering that it will often be necessary to use more than one method of advertising or promotion to reach the potential customers that the business is trying to contact.


These methods might include: Repeat business and word of mouth recommendations:

The easiest customers to reach are those already using the business. It is absolutely essential to keep as many existing customers as possible - so good customer service is therefore a vital part of any successful business. Statistically between 80 – 85% of all business will come from repeat or word-of-mouth recommendation. Additionally statistics show that a satisfied customer will tell four others and a dissatisfied customer will tell seven, reinforcing the importance of keeping existing customers happy.

Advertising: The general term “advertising” covers a wide range of ways of reaching potential customers and for the majority of smaller businesses might include:

o Local newspapers o Local free newspapers o Local magazines o Parish magazines o Leaflets o Thomson Directory and Yellow Pages o The Internet o Local radio

Larger businesses may spend huge sums of money on television advertising, adverts in national newspapers and poster campaigns. Most businesses will need to advertise at some stage; however, advertising a lot is expensive and it is easy to waste money on it. Good advertising will help to:

o Raise the profile of the business o Generate interest in the products and services that the business provides

But it will be a waste of resources unless:

o It looks professional o It is in the right place and gets to the right people o It is clear what response is required from the person reading it (phone call, visit,

email enquiry) o The message is clear o It is likely to bring in more income than it costs

Newspaper articles:

Local newspapers can often be used by businesses to get their message out to the general public at no cost (other than time). However, local newspapers are often searching for stories to print which are of interest to their readers. The opening of a new business or branch, participation in a community event or winning an award would more likely merit some mention, particularly if the timing is right. Some businesses make a link with the paper and write a regular column, giving advice on their area of expertise. Even if they do not get paid for the column, it is excellent publicity for the business.

Exhibition or Trade Fairs: These can be either local or national and be useful in allowing businesses to publicise what they do and speak directly to their potential customers. They work best if they are trade specific. It is important to ensure the venue meets the professional standards of the business and that it will attract the types of potential customer the business wants to meet. Finally it is important to remember that most of these events will have a cost attached to them; the business needs to consider whether the benefits attached to attending will outweigh the financial cost of fees and staffing the event.


Professional Organisations: Using membership organisations specifically related to the trade of the business can help establish the credentials of the business. Advertising in trade publications run by these organisations ensures the advertising gets to those individuals and organisations that are actually interested in what the business has to offer. Professional organisations are also extremely useful because they provide the business with networking opportunities. They usually have an annual membership fee.

Direct Mail: Using the postal service can help the smaller business to reach a lot of people at local level and enables all organisations to target people and businesses that they want to contact more easily. Good market research is vital if the business is to get a useful response and not waste money sending out a large volume of mail to people who are unlikely to be interested. Generally the response to direct mail is very poor - a response of 5% would be very good and 1-2% much more likely.

E-commerce and Websites: A good website can be a major help to a business, but as with all advertising, a badly designed one where the information is difficult to find gives a bad impression and can deter potential customers. Much of the population rely on the internet to provide them with information and expect businesses to have a website. The cost of setting up a website can be kept relatively low as they can be as simple or as complex as the business wants or needs them to be. As a general rule it is vital to give as much information about the business as possible. This will normally include the location, contact details (not just an email address – many people will want to telephone), opening times, details of services that the business offers, a list of products that the business sells and the prices that it charges.


Public Relations PR is the aspect of communication that involves promoting a desirable image for a person, group or business seeking public attention. It originated in the U.S. in the early 20th century with pioneers such as Edward L. Bernays and Ivy Ledbetter Lee. Government agencies in Britain and the U.S. soon began hiring publicists to engineer support for their policies and programs, and the public-relations business boomed after World War II. Clients may include individuals such as politicians, performers, and authors, and groups such as business corporations, government agencies, charities, and religious bodies. The audience addressed may be as narrow as male alternative-music fans between the ages of 21 and 30 or as broad as the world at large. A publicist's functions include generating favourable publicity and knowing what kind of story is likely to be printed or broadcast. The task is complicated by the variety of existing media: besides newspapers, magazines, radio, and television, there are publications of professional associations, direct-mail lists, on-site promotional events, and so on. It consists largely of optimizing good news and forestalling bad news; if disaster strikes, the publicist must assess the situation, organises the client's response so as to minimise damage, and marshal and present information to the media.

Advantages:

1. The promotional techniques used in public relations are relatively cheap in comparison to other marketing methods.

2. Public relations campaigns can provide potential customers with more information on a product or company than many other marketing techniques are able to. For example, a story in the media which describes a product in a positive way can provide more detail than a small advertisement in print or a television commercial can.

3. In many cases, an audience is more likely to read a news article than an advertisement which can be skipped through and lost amongst many others.

4. The methods that public relations experts use to promote a product are often seen by the public as being more trustworthy than other forms of advertising. The media outlets that provide favourable coverage of a product or company are often viewed as third parties offering an independent and unbiased point of view.

5. One advantage of public relations is its ability to expand its influence beyond the reaches of its original campaign. This can be seen in forms of media promotion such as magazine stories. The original story mentioning a product or company, once published, may then be used by other media channels in order to write their own story on the same subject.

6. The effectiveness of a public relations campaign is often felt to have a greater longevity than many other marketing methods. A positive impression will usually last until proven otherwise and a favourable company or product image helps to minimise any future problems that may occur.

Disadvantages:

1. Problems can occur if an organisation’s public relations and marketing departments work independently of each other and do not communicate with each other effectively. If there is a lack of consistency in the messages that a potential customer is receiving, the promotional efforts of all departments may become less effective.

2. The level of a control that a public relations expert has over their promotional campaigns is less than that of other marketing professionals. For example, a person who is promoting a product through public relations strategies could spend a great deal of time talking to a journalist who is writing an industry article but, upon publication of the article, find that the product or company that


they have been promoting has not been mentioned at all. This differs from other marketing professionals who can develop an advertisement and be in complete control over what the public sees and when and where they see it. 3. Another risk of promoting a product through another person’s story in the media is that the intended message can be lost or distorted as a result of the information being re-told by a third party.

Branding Branding is a way of clearly highlighting what makes your product or service different to and more attractive than your competitors'. A brand goes much deeper than just your company logo. You could define a brand as a set of associations that an existing or potential customer has of a company, product, service or individual. These associations can be the result of your own efforts and actively promoted through marketing and corporate identity. Branding also reflects your customers' experiences of your business and affects every interaction you have with your customers and suppliers. The intelligent use of design, advertising, marketing, service proposition, and corporate culture can all help to generate associations in people's minds that will benefit your business. Branding is your attempt to harness these associations to help your business perform better. Any business or organisation can benefit enormously by creating an accurate brand, i.e. one that represents their true values. Therefore, it is important to always be clear about what your business stands for. Successful branding is about promoting the strengths of the business. You need to be sure that you can always deliver your promises using these strengths, sometimes referred to as 'brand values'. You can start by thinking about what your business is good at and what you believe in as a business. For example:

the particular skills your business has

your high-quality customer service

the best value for money you provide in your marketplace

your innovative approach

Every business wants to be a customer's first choice. Building and managing a brand can play a significant part in making that happen. Brand management techniques Once you have established what your brand identity will be, you have to decide how to get your message across. You can do this through advertising, events and staff training. However, the following techniques are also worth considering: Storytelling - telling your business' story through corporate identity, packaging, stationery, marketing materials etc. Credibility - your brand's claims must be credible and appropriate to your values. Details of qualifications or professional membership bodies can help here. Differentiation - presenting a point of differentiation from your competitors. Engaging with customers - if you stand out from the crowd for positive reasons and your tone of voice and communications are credible, customers will look at what you have to offer.


Focusing your product portfolio - shifting your focus onto a smaller number of key products or services may make your offer easier for your consumers to understand. Multiple brands and brand 'stretch' - if your company operates in more than one sector you need to consider how you present the business in each area. You could apply a single brand identity to other products or services for the areas you operate in - this is called 'brand stretch'. However, sometimes it may be more effective to develop a completely distinct brand to meet new markets. Endorsed brands - you can create a new brand in its own right but use the 'parent' brand of your main company to endorse the new brand. Reinvigorating your brand - keeping your communications fresh is essential, and you don't necessarily have to start from the very beginning or reconsider your big idea, vision or personality. Naming - brand names are important in setting the tone and personality of your brand, and a key element in marketing activity. Your brand name should reflect your overall brand strategy. Ensure you check that names aren't already in use and protected by law. Consistency - you should build the same attributes and characteristics into all areas of your business' operations. A set standard should be used whenever the brand appears: typography, graphics, colours, materials and templates. Hire a designer - you can hire a designer to look at the current state of your company and explore possibilities for developing it.


Research a Business Concept (Learning outcome 2)

BUSINESS TYPES

Sole Trader A sole trader is any business that is owned and managed by one person who is responsible for all the debts of the business. This is also known as unlimited liability. Most people start as a sole trader when they first set up a business.

Advantages Disadvantages

It is quick and easy to set up the business. All the new owner needs to do is register with Her Majesties Revenue & Customs (HRMC). The sole trader is both the owner and the manager and will have complete control over the business. Record keeping is kept to a minimum, although good record keeping is absolutely vital if the business is going to succeed. All the profits belong to the owner. Unless the business generates high earnings, tax payments are likely to be lower than if the owner had set up a limited company. It is easy to close the business.

The owner has unlimited liability and personal liability for all the debts of the business. The owner will suffer the full impact of any losses even to the extent of losing their personal possessions. Options for raising money are limited as potential lenders often view this type of business as high risk. The business can be hard, if not impossible, to sell or pass on as it is usually dependent on the individual skills of the owner. The owner will often be operating by him or herself and as a result can feel isolated. All the burdens and pressures of the business will fall on them. Any individual will have a limited set of skills. This will limit their effectiveness.

Partnership A partnership is a business owned by at least two and no more than 20 people, who share the responsibility for running and financing the business as well as the risks. The owners of the partnership have unlimited liability like the sole trader, but are also subject to joint and several liability. Joint and several liability means that if one partner creates debts for the business, all the partners are liable for those debts. If the business has debts and there is only one partner with assets, a house for example, those assets can be used to pay off all the debts of the business. Although a verbal partnership agreement is technically binding, by law it is difficult to prove and enforce. The most suitable course of action is to get a solicitor to draw up a proper deed of partnership, which itemises all roles, rights and responsibilities.


It is quick and easy to set up and register the business. As there are more people involved, there are more skills available to the business. As there are more people involved there will be more initial capital available than a sole trader would have. As there are more people involved it means that the risks and stress of being in business is shared.

The owners have unlimited liability. The owners are subject to “joint and several liability”. There is the possibility of disagreement between partners. There are legal costs involved in setting up a deed of partnership. Partnerships will not find it much easier than a sole trader to raise additional finance.


Limited Company A limited company is a business registered at Companies House that has its own legal identity separate from those who own and manage it. The company’s liability to pay its own debts is limited to the value of its own assets. The owners (shareholders) liability for the debts of the business is limited to the money that they have invested in it. When a limited company is created, the owner(s) become the shareholder(s). The company might be valued at £1,000 and have 1,000 £1 shares all owned by the one owner. These shares can only be bought at the invitation of the existing shareholders. Shareholders are rewarded for the risks they take in owning the company by payment of a dividend. This is a portion of the company’s profits declared as “x” pence per share. Setting up a limited company costs money. It can be done for as little as £50 on the Internet, although £300 - £500 would be a more realistic figure. The cheaper version does not provide a seal and certificate, which banks will insist on seeing if the company wants to borrow money from them. All limited companies must have the word “Limited” in their name.


Limited liability. It is easier to raise money through borrowing or by selling a stake in the business. The company has a separate legal existence from the owner. There are possible tax advantages. Losses are business losses and not personal losses.

It costs money to set up a limited company. The administration involved in setting up a limited company can be complex and it might be better to pay for specialist help. Annual accounts are more complex and have to be filed at Companies House. National Insurance payments are higher. It is more difficult to wind up the company. The regulations involved in a limited company are more complex than for partnerships and sole traders.

Franchise A franchise is not actually a separate form of business. The individual or owner purchases specific rights to sell goods or services under a trade name using the branding associated with the parent business. Each franchise organisation has its own franchise agreement, but in general the individual owner or manager at “branch” level will have less direct control over the decisions that they make than they would if they were an independent business. There are many well-known organisations that operate as franchises: McDonalds, Toni & Guy and Dyno Rod are three well-known names but there are many others. Public Limited Company A public Limited Company (PLC) has many similarities to a Limited Company. The main difference is that their shares can be bought and sold on the Stock Exchange without reference to the owners. Many PLC’s are extremely large and can be worth millions of pounds. As a result they will have a similarly large number of shares. The shareholders meet annually at an Annual General Meeting (AGM) to appoint Directors who run the company on their behalf. A PLC has to make substantial profits to keep the shareholders happy. The shareholders need not just be private individuals; they may also be large organisations like pension funds, insurance companies, banks etc. Limited Liability Partnership Despite the name this is not a partnership, but a corporate body with its own legal identity. The “partners” are not personally liable for the debts of the business. This type of business was introduced in 2000 to give some form of limited liability to organisations such as accountants and solicitors, who for legal reasons cannot form limited companies or who would prefer to keep the “partnership” aspect in their business title.


Social Enterprise A social enterprise is an organisation that invests profits back into the enterprise or community rather than distributing them to shareholders. There are a number of different types of social enterprises, which include trusts, co-operatives and community interest companies. Employer An employer is an organisation, company, small business or individual who employs or gives work to an employee. An employer will pay compensation (salary or wage) in exchange for the employees work or services. Employers are responsible for paying and taking care of tax, National Insurance, etc. Depending on how large the company is, most employers will offer employees a comprehensive employee benefits package – including health insurance, paid time off, sick pay, holidays, etc. Employee An employee is an individual who is hired by an employer to provide a service or to carry out a specific job. They are not responsible for running the business, advertising, accounting or sorting out the business insurance. An employee works on a regular basis in exchange for regular, guaranteed compensation (salary or wage). Employees do not provide these services as part of an independent business. Volunteer This is a person who performs or offers to perform a service voluntarily. They may do charitable or helpful work without pay e.g. work in a hospice, rest / nursing home, etc. Volunteering can be very rewarding and can give experience treating people who would not normally come for a treatment. Sometimes, where a therapist has been able to show significant benefits to his/her clients, the hospice or other organisation may decide to employ him/her as a paid employee. Sometimes relatives, seeing the benefit that the patient is receiving, book in for a treatment too. One disadvantage, is that volunteering is not paid and can cost therapists money. Many hospices will pay expenses, but this doesn’t normally include essential items such as insurance and membership of professional organisations.


Potential Business Location Advantages of working from home

Working in one’s own environment - space is set up exactly as you would like it

Flexibility of working hours

No travel expenses

No transportation of equipment

Security of working in own home

No rental payments

If client cancels, therapist can get on with other things around the home. Disadvantages of working from home

Distractions

Necessary to have a specific treatment area - reduction in living space

Restriction on certain activities ( family members ) when clients in the house

‘ Tied ‘ to the house

Lack of security

Legal and possible mortgage deeds restrictions

May be liable for capital gains when you come to sell the house Advantages of working in a clinic / natural health centre

Correct facilities - waiting area, reception

Correct and secure environment - rooms set up appropriately

Working / interaction with other professionals

Possibility of referrals

Good place to advertise Disadvantages of working in a clinic / natural health centre

Necessary to travel and related costs

Little control over working hours / room availability

Business rates

Cost of lease / rent

May need to take your own equipment with you Advantages of carrying out home visits (being mobile)

Client feels more relaxed in their own home

Client can stay where they are at the end of the treatment - and relax

Useful for people who are elderly / disabled / housebound

No rental or utilities costs

Flexibility

Start up costs are minimal Disadvantages of carrying out home visits / being mobile

Transporting heavy equipment - equipment must be portable. Therapist has to be fit

Travel costs - car insurance

Client’s home may lack privacy or be unhygienic

Personal safety and security must be a priority

Travelling time uses up more valuable working time

No control over working environment - pets, noisy children, other distractions


Advantages of working in a voluntary capacity / hospice / nursing home

Satisfaction of knowing you have helped

Can be very rewarding - feeling useful and valued

Increases experience

Get CPD points ( once qualified and an MAR )

Helps people who might not otherwise have been able to have these treatments

Satisfaction of feeling you are giving something back Disadvantages of working in a voluntary capacity / hospice / nursing home

No pay

Have to pay for own travelling costs

May find it difficult to deal with grief and own emotions

Can be depressing

Requires commitment, which may affect your business should it become busy


Employing People It is absolutely essential for a business to ensure that it employs the right person to fill any job vacancy that it might have. As a result the business needs to answer three important questions before writing a job advertisement or telephoning an agency to fill the post: Is it worth employing someone to do this job? (job analysis) What exactly is this person required to do? (job description) What characteristics should the person have in order to do this job effectively? (person specification) This needs to be thought through carefully or the business might end up re-advertising the job over and over again because the new employee either cannot cope with the work involved or decided that the job is inappropriate for their career development. Job Analysis In order to decide whether employing somebody is necessary, businesses should carry out a job analysis. This is a process used to collect information about the duties, responsibilities, necessary skills, outcomes and work environment of a particular job. The business will need to gather as much information as possible through this process so that it can put together a job description and person specification, and these will often be the result of the job analysis. Review job responsibilities of current employees Research and view sample job descriptions for similar jobs being advertised Analyse the work duties, tasks and responsibilities that need to be accomplished by the employee filling the position Draw up a person specification that highlights the ideal personal qualities and qualifications required of the person who will fill the position Give a clear idea of how the business will benefit from employing somebody to do the job or jobs being identified Will employing this person increase the profits of the business? Look at the current employees of the business and see if any of them might be able to do the job The more information gathered here, the easier it will be to write a job description. Job Description A job analysis tells the business whether the job is needed. A job description shows what the job is. Job descriptions are written statements that should describe the following: The duties of the job The responsibilities of the person undertaking the role The contributions /tasks expected from the job and the outcomes expected from it A clear statement outlining who the person reports to and their relationship with other employees within the business The educational qualifications needed for the position Experiences needed General and particular skills needed Job descriptions are based on objective information obtained through the job analysis, an understanding of the competencies and skills required to accomplish the tasks and the needs of the organisation to produce work. Job descriptions clearly identify and spell out the responsibilities of a specific job. They should also include information about the day to day duties expected from each employee in all departments, working conditions, tools, equipment used and the relationships of the job with other positions.


Employment Law There are laws relating to the contracts of employment and the rights and responsibilities of employers and employees. It is absolutely essential for any employer to be aware of the basic legislations and to comply with it at all times. It is also important to seek specialist help when confronted with problems in this area, either from the legal profession or from bodies like the Advisory Conciliation & Arbitration Service (ACAS). Contract of Employment The Contract of Employment is the key to employing people. A good contract will help ensure everybody is clear about what each employee is expected to do and what the rights and responsibilities of both the employer and employee are. The essential elements of the contract are:

All employees should be given a contract of employment whether they are full or part time

If the business does not issue a written contract, it has a legal duty to provide employees with a written statement of their terms and conditions of service within two months of their employment The terms of a contract of employment may be oral, written, implied or a mixture of all three. An oral contract is as binding as a written one, though its terms may be more difficult to prove. A basic contract should set out the following terms and conditions:

o Date employment started o Place of work o Nature of job o Hours of work o Probationary period o Wage / salary / commission and when they are paid o Holiday entitlement / maternity entitlement / sick leave o Period of notice (from either party) o H&S Policy / Grievance Procedure / Disciplinary Procedures

Redundancy occurs when the job that an individual has been doing is no longer needed by the business. Provided that this is actually the case and that the correct procedures have been followed, it is a perfectly legal action. Constructive dismissal is illegal under employment law. This occurs when an employee resigns because the actions of the employer have been unreasonable. Unfair dismissal occurs when an employee is dismissed, but there is no just reason by law. Wrongful dismissal is based on contract law and occurs when an employee is dismissed but the provisions of the contract are not met. The most frequent example occurs when an employee is given an incorrect period of notice. Advantages of employing staff

Can offer more therapies / expand the services offered

Don’t always have to be on the premises - have an experienced deputy

Can still be earning money while you go on training courses, exhibitions, etc.

You can go on holiday and the business will still be earning money

Sharing of the workload

Interaction with fellow professionals


Disadvantages of employing staff

You are responsible for health and safety of staff, personnel issues, etc.

Will have to earn enough money to pay salaries

Responsible for PAYE, Nat Insurance, sickness, holiday pay, etc.

May have to pay more for an experienced therapist

Expanding the business costs money - bigger premises, more equipment, etc.


Plan, Prepare and Maintain a Business Plan (Learning outcome 3)

Business Plan All businesses, regardless of their size and how long they have been operating, should have a current business plan. Banks will almost always want to see one should the business wish to borrow money, but a better reason for producing it is that it will help the business to be successful. A business plan helps the owners and managers of the business to set out what they aim to do and how they intend to do it. The business plan will be:

A working document which the business should constantly review, update and change as it develops

A means of comparing the progress and development of the business with the original plans Business plans will normally fall into three sections: 1. A marketing or sales plan, will set out how much of each product or service the business expects to sell over a given time. It will also indicate the prices that it will sell these quantities at and consequently indicate the likely income for that period of time. 2. A financial plan which takes the likely income from the marketing plan, calculates the cost of producing the products and services, and uses these figures to work out the likely profit (or loss) over the period of time. 3. A statement of all the other key elements that allow the business to operate effectively such as ownership, objectives, premises, IT, legal and resource requirements. There is no set format for a business plan, just remember a few general rules for producing on:

Keep it short and simple – stick to the point and focus on what the reader (bank or business itself) needs to know. Detailed information such as market research or the previous year’s balance sheet and profit and loss account can go in the appendices at the end.

Make it professional – a well-presented plan will help the business create an image it wants to show other organisations.

Include a contents page – there is nothing more irritating to the reader than being unable to locate the section they are looking for.

Ensure it is legible and that it can be emailed – electronic form is more user-friendly these days.

Make sure that is has been proof read and edited properly – this forces somebody in the business to review thoroughly what has been written and to identify any potential errors and issues arising from the plan as a whole. It also shows professionalism.

The contents of a business plan Executive Summary The summary contains key points found in the plan as a whole. Whoever is preparing the plan for the business should write it as if they were explaining the main issues to somebody who is important to the business, but only has time to read one page. Most people, when writing a business plan will write this section last, even though it appears at the front of the plan. This is because it acts as a summary of the plan and cannot be written until the rest of the plan has been completed. The summary highlights the most important points, which are:

The purpose of the plan


The product or service and its benefits to the potential customers

The opportunities open to the business

The management team, its skills, background and track record

The financial projections

The funding requirements

The potential risks and how they will be dealt with Business detail This section should include the names and addresses of the owners and directors of the business. It should also include the address of the business, its legal status (sole trader, limited company etc) and a brief description of its principle objectives. Business objectives In this section the business should explain what its main objectives are. These might for example be long or short-term profit, growth or market shares. Key personnel Readers of the plan who are external to the business (banks or other potential investors) will want to have faith in the management of the business. They will therefore need to know who they are, their relevant experience and background. CV’s can be included in the appendices. The marketing plan This will be the longest section of the plan. The business will need to describe the market, their position in it, and their competitors. This will show that the business is fully aware of the market, its place and any likely trends. The plan will show the business has considered: Its customers Who they are, and what segment of the market the business plans to target (geographical region or age range of potential customers) The key characteristics of the potential customers (age, sex, income) Whether the business already has any existing contracts How many customers does the business have or expect to have in the sections of the market that has been targeted The current trends in the market and how they might affect sales (interest rates, aging population, changes in government legislation) Its products and services What products or services the business is selling or planning to sell What are the features and benefits of each of its products or services What are the unique selling points (USP) of the business’s products or services How can the benefits of these products or services be demonstrated to the customers Are there any weaknesses in the individual products and services or in the range as a whole Its competitors Who, what and where are they What are their strengths and weaknesses How are they different from this business Its market research What research has been done What conclusions have been drawn from the research Is the demand for the products and services stable, increasing or decreasing


Its image or brand How is the business positioning itself (upmarket, eco-friendly, youth-orientated) Does it need to register a trademark or web domain and what should they be Does the business have or need a corporate logo, typeface, uniform or colours Its pricing How has the business worked out the prices that it charges or plans to charge How do the prices compare with the business’s competitors prices Where prices are different in the same market, why are they different Its marketing objectives How much or many of each product or service is the business planning to sell to each of its customers or type of customers How does the business plan to achieve these sales Sales Regardless of whether the business is a start-up or in operation for a long time, it will need a reliable sales forecast. The business will need to work out how much of each product or service it can expect to sell to each type of customer and to calculate the totals for each month or year of the plan. The forecast must be realistic. Start-up businesses in particular tend to be over optimistic in preparing these forecasts and they will need to guard against this. It would be sensible for these businesses in particular to ask themselves the following questions and to give realistic answers: How soon can the business actually start selling How much will the business be able to sell How long after the sale will it be before the business can collect payment (pre-sale, post-sale, 30 day invoice) Suppliers The business will need to list their suppliers, what it will buy from them and their credit terms. It will also need a fallback plan in case a supplier goes into administration or lets them down in some other way. Distribution The business may need to move products and materials from place to place. In its plan the business will need to:

List the products, materials and resources that will need transporting

List the relevant timescales

List the costs that will be incurred

Describe any security issues or other special requirements (fragile goods) Resources The business will need to state which resources it needs to acquire in the future, but particularly in the time period covered by the business plan. The plan might cover a range of resources and could include equipment, premises, vehicles and people (see staffing). It will also need to explain why it needs them, what it will cost and how it intends to obtain the necessary finance.


Information technology Few businesses in the modern business environment can operate without IT. The business will need to show:

What hardware and software it will need and how it will be supported

Any training that will be required

What security systems will be needed and how data will be backed up

Whether the business has or needs a website and the costs that will be incurred in developing and supporting it Premises The business will need to identify its existing premises. If it is likely to need to obtain more, or to develop its existing premises, it must show how this will be funded. The plan will need to:

List any office space, warehousing, manufacturing or service delivery space required

Outline factors such as access, company image requirements, impact on neighbours etc

Show whether the property will be leased or owned and details of the terms and costs involved

Plus any additional potential costs such as builders, decorators, plumbers, electricians, solicitors etc Legal requirements All businesses have a wide range of legal requirements they have to comply with; some apply to all businesses, others to certain sectors or those working with certain materials. The business should:

Identify the legal and regulatory requirements that it needs to meet

List any policies, licenses and insurances that it needs

Consider whether it needs patents, trademarks, copyrights or other protection

Set out its specific health and safety requirements Staffing Once the business has outlined the potential scale of its operations in its marketing plan, it will need to decide on the staff it needs to achieve the necessary output. The business plan will have to:

State what jobs will be needed to achieve the desired output and outcomes and what skills will be required

Analyse the current staffing of the organisation and assess whether any additional staff will be needed

Demonstrate that any additional staff employed will need to generate more income than they cost the business

Explain how the business will find the right people to fill those roles

Identify what staff training will be necessary, how and where it will be delivered, by whom and at what cost The financial plan The business has already produced a marketing plan. The figures for the volume and value of the estimated sales provided by the marketing plan will provide the basis for the development of the financial plan. The financial projection for the next 12 months is effectively a budgeted profit and loss account. This provides the business with a clear indication of how it is planning to move forwards over the


next year and the profit (or loss) that it is expecting to generate, based on its best estimate of sales for that period. The cash flow forecast based on the same sales figures shows how much cash will be available to the business at each month (and year) end, and effectively tells it whether it will be able to pay its bills. The final section of the financial plan asks the business to consider whether it needs to borrow any money to finance its operations and development. In addition it asks the business to consider whether the loans can be secured and how they might be repaid. Risk analysis The risk analysis asks the business to take a realistic look at what might go wrong with the business plan and consider how it might deal with those issues if they occur. This is an important element of the planning process; any sensible business knows that its plans will not necessarily work out exactly as predicted. It is also usually aware which elements of the plan are most likely to present problems. The risk analysis is an opportunity to think about how those potential issues might be dealt with before they occur, by putting a contingency plan in place to deal with them. Appendices Small businesses with simple business plans may not need appendices, larger companies almost certainly will. The appendices contain the information, particularly detailed figures and support documentation which would make the plan more difficult to follow if it appeared in the main body of the text. For most business plans the appendices will contain documents like:

Balance sheets and profit and loss accounts from previous years

Financial ratios and other account analysis

Sales forecasts

CVs for key personnel

Market research date

Product literature and technical specifications

Customer database

business practice for complementary therapies -...

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