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Tenders, business planning and partnership

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Title: Tenders, business planning and partnership


1
Tenders, business planning and partnership
  • Wingspan Consulting


2
About this course approach
  • Wingspan Consulting
  • Building on your knowledge
  • Tools and tips
  • Exercises
  • Presentations

3
Background and Purpose
  • Wingspan Consulting
  • Previous tendering round
  • Some issues and challenges around delivery not
    being quite as envisaged
  • Some lessons learned
  • Exact form of new tenders not finalised.but

4
Background and Purpose
  • Wingspan Consulting
  • Care Sector Alliance asked by CCC to offer some
    support and training on
  • Robust business and service planning (and in
    particular on costings and on the staffing side
    of planning)
  • Partnership working
  • Transition from current to new arrangements

5
Outline Day One
  • Wingspan Consulting
  • Business planning
  • Purpose
  • People (Sandy)
  • Costings
  • Financial information
  • Management information
  • Marketing
  • Putting this into action

6
Outline Day Two
  • Wingspan Consulting
  • Tendering (Mike)
  • Partnership working
  • Overview
  • Experience (Sheila)
  • Business planning for partnerships
  • What if?
  • Risk and risk management
  • Planning for the outcomes of the tenders
  • QA

7
People
  • Wingspan Consulting
  • Sandy Armstrong CSAC Recruitment and Retention
    Officer
  • Mike Farren - CCC Senior Procurement And
    Contracts Manager
  • Sheila Gregory CEO Carlisle Mencap
  • Guy Huxtable Wingspan Consulting

8
Introductions
  • Wingspan Consulting
  • Who are you?
  • Why are you here?
  • Competition and confidentiality

9
Content and purpose of a business plan
  • Wingspan Consulting
  • What is it? And what would you expect it to
    contain?
  • Why bother? Whats it for?
  • Should every business have one?

10
Plans and Planning
11
  • Wingspan Consulting

12
Recruitment and Retention
  • Wingspan Consulting
  • Service industries staff the most important
    element
  • Particular challenge for domiciliary care?
  • Needs to be addressed in business plans

13
Sandy Armstrong CSAC Recruitment and Retention
Officer
  • Wingspan Consulting

14
Costings how much to charge?
  • Wingspan Consulting

15
Costings exercise
  • Wingspan Consulting
  • Handout with information on
  • Staff roles, numbers, salaries etc
  • Capital items
  • Maintenance contracts
  • Other costs
  • VAT does not exist

16
Questions to answer
  • Wingspan Consulting
  • (Using the costs stated) what are your total
    annual costs for running the business before you
    make any sales at all?
  • Can you think of other costs not mentioned on the
    form which should be taken into account when
    producing costings?
  • Realistically, what is the maximum annual number
    of chargeable hours you might be able to sell?
  • If your drivers are busy (charging clients) for
    75 of the maximum number of chargeable hours,
    what price should you set to break even?

17
Costs of running the business
  • Wingspan Consulting
  • Staff is largest

Job Salary Pension contribution NI cost Cost per person No of people Total cost
5 13.80
Driver 20,000 1,000 1,662 22,662 10 226,621
Manager 30,000 1,500 3,042 34,542 1 34,542
Admin 15,000 750 972 16,722 3 50,166
311,329
18
Costs of running the business
  • Wingspan Consulting

Rent 15,600
Stationery 1,000
Depreciation 2,000
ICT 1,500
Radio 500
Phone 750
Accountancy 1,000
HR advice 300
Insurance 1,200
Total 23,850

Total costs for running the business 335,179
19
Other costs
  • Training courses
  • Signwriting
  • Lawyers
  • Management consultants
  • Repairs
  • Refunds
  • No shows
  • Correcting errors
  • Business cards/ flyers
  • One off advertising opportunities
  • Membership of trade organisations
  • Software costs
  • Bad debts
  • And.add a ?

20
Costs of running the business
  • Wingspan Consulting

Other costs
Rent 15,600
Stationery 1,000
Depreciation 2,000
ICT 1,500
Radio 500
Phone 750
Accountancy 1,000
HR advice 300
Insurance 1,200
Other (_at_ 2 of total costs) 6,704
Total 23,850 30,554
Total costs for running the business 335,179 341,883
21
Maximum numbers of chargeable hours
  • Wingspan Consulting
  • Travelling to the client plus.what else?

22
Numbers of chargeable hours
  • Wingspan Consulting

Drivers hours
Weeks 52
Hours per week 40
Number of drivers 10
Total available hours 20,800
Leave
Weeks 4
Hours 40
Number of drivers 10
Total 1,600
Bank holidays
Days 8
Hours 8
Number of drivers 10
Total 640
Lunch breaks
No of days per week 5
Number of drivers 10
Number of lunch breaks 50
Duration of lunchbreak (hours) 0.5
Lunchbreaks per week 25
Lunchbreak time per year (hours) 1,300
Hours after holidays and breaks 17,260
23
Other things that reduce chargeable hours
  • Wingspan Consulting

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31
Numbers of chargeable hours
  • Wingspan Consulting

Drivers hours
Weeks 52
Hours per week 40
Number of drivers 10
Total available hours 20,800
Leave
Weeks 4
Hours 40
Number of drivers 10
Total 1,600
Bank holidays
Days 8
Hours 8
Number of drivers 10
Total 640
Lunch breaks
No of days per week 5
Number of drivers 10
Number of lunch breaks 50
Duration of lunchbreak (hours) 0.5
Lunchbreaks per week 25
Lunchbreak time per year (hours) 1,300
Hours after holidays and breaks 17,260
32
Numbers of chargeable hours
  • Wingspan Consulting

Contingency for
Pregnancy 1.5
Sickness 3.0
Absenteeism 1.0
Gaps between employment 1.0
Strikes 0.5
Training 1.5
Paternity leave 0.5
Compassionate leave 0.5
Other 1.0
Total 10.5
Hours when drivers can be driving 15,448
Hours when drivers can be charging (taking travel to client into account) 10,298
33
How much to charge?
  • Wingspan Consulting

Hours when drivers can be charging 10,298
Actual hours drivers are charging 75 7,724
Total business costs 335,179
Fixed costs per driven hour 43.40
Miles driven per hour 20
Mileage costs per hour 0.45 9.00
Total cost per hour (break even) 52.40
34
Costing models
  • Wingspan Consulting
  • UKHCA - http//www.ukhca.co.uk/costingmodelperhour
    .aspx
  • Department of Health more residential
    http//www.laingbuisson.co.uk/portals/1/media_pack
    s/Fact_Sheets/Illustrative_Costs_PLD.pdf

35
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36
Financials
  • Wingspan Consulting
  • Financial information is a translation
  • Every statement in the business plan may have
    financial implications
  • Projections over a period so inflation (or
    deflation??) may be relevant

37
Profit and loss
  • Wingspan Consulting

The profit  loss account summarises the income
and expenses generated by a company over an
entire reporting period.  The basic equation on
which a profit loss statement is based is
Income Expenses  Profit.
38
Cashflow
  • Wingspan Consulting

Nobody goes bust because they make a loss they
go bust when they run out of money
39
Cashflow
  • Wingspan Consulting
  • Cash flow is the movement of money into or out of
    a business. It is usually measured during a
    specified, limited period of time
  • Usually done on a spreadsheet (and can be linked
    to PL)
  • Opening and closing balances
  • Shows if you are going to run out of cash
  • Payment terms critical

40
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41
Balance sheet
  • Wingspan Consulting

 
A financial statement that summarizes a company's
assets, liabilities and shareholders' equity at a
specific point in time. These three balance
sheet segments give investors an idea as to what
the company owns and owes, as well as the amount
invested by the shareholders
42
Balance sheet
  • Wingspan Consulting

 
  • Assets
  • Cash
  • Invoices outstanding
  • Capital equipment
  • Stock
  • Debts/ liabilities
  • Invoices owed
  • Bank loans
  • Provision for bad debts

Assets Liabilities Shareholders' Equity
43
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44
Sensitivity analysis
  • Wingspan Consulting
  • Linked to risk management (later)
  • Sensitivity of the business to changes in inputs
    what if
  • Minimum wage changes
  • Petrol costs
  • Reduction of 10 in demand
  • Increase in demand
  • Often use an Excel spreadsheet for this but can
    do this simply, or as a thought experiment

45
Expenditure/ Income -10.0 -5.0 0 5 10
10.0 42,933 34,823 26,714 18,605 10,495
5.0 34,346 26,237 18,128 10,018 1,909
0.0 25,760 17,651 9,541 1,432 - 6,677
-5.0 17,174 9,064 955 - 7,154 - 15,264
-10.0 8,587 478 - 7,631 - 15,741 - 23,850
46
What is marketing?
  • Wingspan Consulting

47
  • Wingspan Consulting

48
Marketing
  • Wingspan Consulting
  • The action or business of promoting and
    selling products or services, including market
    research and advertising (OED)
  • Applies across an organisation from securing
    resources (such as staff) to offering services
    and products to customers
  • Understanding markets is just as/more important
    than selling
  • Lots of acronyms and models (SWOT, PEST(s), 4Ps)
  • Can split into analysis and action

49
Analysis
  • Wingspan Consulting
  • How big is the market?
  • What products and services are sold?
  • What are the changes?
  • What are the trends?
  • What are customers going to do next?
  • What are competitors up to?
  • What factors are going to influence it?

50
Analysis
http//www.cumbriaobservatory.org.uk/instantatlas/
Cumbria_Atlas_Single_Map_Electoral_Wards/atlas.htm
l
51
Exercise
  • Wingspan Consulting
  • PEST focus on trends and changes
  • Political, Economic, Social and Technological
  • Important to define the question.so
  • In the next five years, what are the significant
    changes and trends that are likely to have a
    significant effect on the domiciliary care market
    in the UK? Classify these using the PEST model

52
Promotion
  • Wingspan Consulting
  • Who do you promote your business to?
  • What methods do you use?
  • Do they work?

53
Management and Control
  • Wingspan Consulting
  • Under contracts, some monitoring already done by
    CCC
  • Other monitoring from CQC
  • What other management systems do you have (formal
    or not)?

54
Management and control
  • Wingspan Consulting
  • Formal (and often externally audited)
  • ISO9000s, ISO14000s and others
  • BS5750
  • IIP
  • PQASSO
  • EFQM
  • Tools
  • The above adapted for your organisation
  • Balanced scorecard

55
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56
Common features
  • Wingspan Consulting
  • Clear and public objectives
  • Processes in place to monitor against objectives
  • Reviews of systems and processes
  • Reporting mechanisms
  • Spread of measures looking across an organisation
  • But dont over rely!

57
Actions
  • Wingspan Consulting

58
Audience and actions
  • Wingspan Consulting
  • So what?
  • Who cares?

59
Actions
  • Wingspan Consulting
  • Task
  • Quality whats good enough
  • Timescale
  • Resources
  • Responsibility
  • Review

60
Revising the plan
  • Wingspan Consulting

61
Partnership working
  • Wingspan Consulting
  • We all work with other organisations all the time
    (for instance the supply chain) so whats
    different about partnership?
  • What are the pros and cons?
  • What are the requirements for a good partnership?

62
Partnership
  • Pros
  • Cons

Requirements
  • Takes the opposition away increases competitive
    advantage
  • Brings new
  • capacity
  • skills
  • knowledge
  • experience
  • Risk sharing
  • Cost reduction?
  • Culture (yours/ theirs)
  • Cost of running the partnership itself
  • Have to continually seek agreements/ negotiate
  • Longer lines of communication
  • Shared liability
  • Trust
  • Honesty
  • Clarity
  • Fairness
  • Willingness to adapt
  • Willingness to compromise
  • Agreement on systems, quality etc

63
Types of partnership used in delivering
contracts
  • Wingspan Consulting
  • Informal
  • Sub-contracting
  • Consortium
  • Merger/ takeover/ vertical integration
  • Joint venture

64
Experience of partnership working Sheila
Gregory CEO Carlisle Mencap
  • Wingspan Consulting

65
Exercise - What difference would partnership
working make to your plans?
  • Wingspan Consulting
  • Products and services
  • Aims and objectives
  • People
  • Other resources
  • Marketing
  • Regulation
  • Finance
  • Management and control
  • Risk (later!)

66
Risk
  • Wingspan Consulting

The chance of exposure to the adverse
consequences of future events
67
Risk Management
  • Wingspan Consulting
  • Identify
  • Quantify
  • Allocate to owners to manage
  • Report and review

68
Identifying risks
  • Wingspan Consulting
  • All assumptions involve a risk
  • Types of risk
  • Operational
  • Employee
  • Technological
  • Compliance
  • Financial
  • Environmental
  • Political
  • Other (partnership?)

69
Risk Analysis
  • Wingspan Consulting
  • Standard risk analysis likelihood and impact
    similar to HS risk assessments
  • Agree criteria for likelihood and impact
  • Use more than one person
  • Manage both likelihood and impact

70
Which Risks to Manage?
  • Wingspan Consulting

Potential impact Potential impact Potential impact Potential impact Potential impact Potential impact
Prob. 5 4 3 2 1
Prob. 5 25
Prob. 4
Prob. 3 6
Prob. 2
Prob. 1
71
Managing Risks
  • Wingspan Consulting
  • Prevent
  • Reduce
  • Accept
  • Contingency
  • Transfer
  • And build (and cost) these actions back into your
    plans

72
Risk Exercise
  • Wingspan Consulting
  • Identify key risks for delivering your service
  • Identify risk management actions and classify
    (PRACT)
  • Build on your experience!
  • Focus on service delivery rather than the broader
    business plan for this exercise

73
Managing Risks
  • Wingspan Consulting
  • How much resource to allocate?
  • Cost of management vs cost of occurrence x
    probability of occurrence
  • Record and review (risk log?)

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After the bid
  • Wingspan Consulting

You were You are now You are now You are now You are now
Existing A provider Lead Sub-contractor Alone Failed
Existing B provider Lead Sub-contractor Alone Failed
Neither Lead Sub-contractor Alone Failed
78
Exercise
  • Wingspan Consulting
  • Splits into groups of
  • A providers
  • B providers
  • Neither of the above
  • List up to 4 key issues for your business if you
  • Become the lead contractor of a partnership
  • Become a sub-contractor
  • Become the sole contractor
  • Fail to get anything
  • And what you might do about them!

79
Scenarios
  • Wingspan Consulting
  • Need to build time/ resource to deal with these
    scenarios into your planning
  • Early discussions with key stakeholders about the
    scenarios?
  • What are the costs of the various options?

80
Wrapping Up
  • Wingspan Consulting
  • Questions and comments
  • Revisit original objectives
  • Evaluation (SurveyMonkey)

81
Guy Huxtable 017687 80925 guy_at_wingspan-consulting.
co.uk
  • Wingspan Consulting
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