Trade Training Centres in Schools program

Business Strategy and Business Plan template

Published by the

Department of Education and Training

Melbourne
April 2015

©State of Victoria (Department of Education and Training) 2015

The copyright in this document is owned by the State of Victoria (Department of Education and Training), or in
the case of some materials, by third parties (third party materials). No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968, the National Education Access Licence for Schools (NEALS) (see below) or with permission.

An educational institution situated in Australia which is not conducted for profit, or a body responsible for administering such an institution may copy and communicate the materials, other than third party materials, for the educational purposes of the institution.

Authorised by the Department of Education and Training

1.	Notes on this template	3

Definitions	4

2.	Background	5

Strategic principles	5

3.	Current state	6

Stakeholders	6

Performance	6

4.	Future state	8

Targets	8

5.	Strategy	9

Strategic initiatives	9

6.	Business plan	12

Initiatives	12

Outcomes	14

Budget	14

Notes on this template

This template is a companion to the DET publication ‘Trade Training Centres in Schools program – Managing a Trade Training Centre’. In that document it is highly recommended that Trade Training Centres (TTCs) have a documented business strategy and business plan.

There is no best format for business strategies or plans. This template is intended to be a default format if no other can be found and a guide to help TTC operators document their strategy. Users of this template should feel free to add new headings, expand existing ones and modify the template as necessary to achieve the end result – a document which accurately reflects a shared vision of the TTC at the end of the strategy along with a detailed plan for the coming year.

Strategies do not need to be complex and in fact are more effective when they are simple, making them easier to approve and communicate. The key is that they describe what will be achieved and how it will be achieved. If either of these is not credible, then the strategy is likely to fail. If both are convincing, then the strategy is likely to succeed.

The DET publication ‘Trade Training Centres in Schools program – Managing a Trade Training Centre’ includes a process diagram for creating a strategy and business plan, and is reproduced here:

It is recommended that this template or a similar tool be used to inform each of the activities above.

Developing a strategy document can be iterative in several ways. The future targets may inspire the creation of initiatives to achieve them, but in the end the targets may need adjusting to match the initiatives that are selected. Some of the current performance measures may become irrelevant and can be replaced with others that better match the initiatives in the strategy. Do not be concerned if there are radical adjustments to the strategy as you move through the process. This is normal.

Definitions

For the purposes of this document these definitions apply:

Business strategy

A long term (3 to 5 year) description of how to achieve a future vision

Business plan

A one-year plan of how to progress the strategy in the current year

Business planning

An annual process that establishes or updates the business strategy and creates the coming year’s business plan

Target

A specific measurement that the strategy aims to achieve. There can be several targets in a strategy.

Baseline

A measurement which future results will be compared with. For example a baseline measure of 1200 students today might be compared with a target increase in students of 300 in three years’ time.

Initiative

A practical exercise, activity or project that will contribute to achieving one or more of the targets in the strategy.

The above section can / should be removed by the user. Italic blue text in the remainder of this template is instructional and should be removed when the template has been completed (if you are familiar with styles in Microsoft Word, select all instances of the ‘Guide text’ style and delete). Other text is suggested wording and can be retained or modified by the user.

Background

For the benefit of readers and stakeholders who have not been involved in the TTC from the outset, a brief history of how the TTC came into being and how it has been governed and managed to this point should be included here. Relevant facts about the forces and circumstances which have impacted the TTC in the past should also be included. A description of previous strategies, their successes and shortcomings and any learnings may also be useful.

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Strategic principles

If there are any principles, aspirations or philosophies that underpin the TTC they should be described here. For example, a common aspiration might be to become the very best in what they delivery.

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Current state

This section should describe the TTC as it is now; the courses it offers, the demographic it serves, the way it is managed and governed and any challenges it faces. Include any external factors that are having an influence on the TTC (e.g. expected teacher retirements, changes to legislation, nearby training facilities due to open, major employers shutting down, falling enrolments, parent and student expectations, etc.).

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Stakeholders

Identify and list all the stakeholders in the TTC with a brief description of the reason for their interest and how each stakeholder currently engages with the TTC. Stakeholders should include the group who govern the TTC. Stakeholders are the people who should be invited to help formulate the strategy. A suggested table format (with example text) is provided below.

Table 1 - TTC Stakeholders

Stakeholder	Interest	Method of engagement
A Smith	One of six cluster principals on the original TTC funding application	Chair of TTC governance committee
B Jones	Lead school principal	Member of TTC governance committee
C Brown	Head of lead school Parent Reference Group	Consulted by TTC manager on a monthly basis
D Green	Training manager for XYZ company, who hires the TTC for summer months to run adult education	Regular contact with TTC manager
E Frank	Manager of TTC	Manages the TTC on a daily basis. Attends TTC governance committee, leads annual TTC business planning
Etc.

Performance

This subsection should detail specific measures about the current state of the TTC such as revenue, annual cost of operation, profit or loss, student numbers, cost per student, staff numbers, course enrolments, student performance measures, staff performance measures, staff turnover & etc.

Keep in mind that some of these metrics will serve as the baseline for the strategy (i.e. a target will be set and future results will be compared with the baseline and the target). These will measure and demonstrate the outcomes of the strategy described in Section 5.

Some metrics already being reported to DET or the Federal Department of Education may be suitable. A suggested table format with examples is provided below.

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Table 2 - TTC Performance Measures

Measure (Last Financial Year)	Value
Total revenue	$354 950
Total cost of operation	$367 114
Profit / loss	-$12 164
Number of students	227 (87 year 9, 81 year 10, 59 year 11)
Cost per student per annum	$1 564
Number of staff	5 (3 Full-time)
Number of courses	7
Enrolments per course	Automotive (Mechanical) 29 Automotive (Technology) 21 Hairdressing 33 Hospitality 51 Electro-tech 19 Horticulture 23 Construction 47
Number of qualifications attained	91
Etc.

Future state

This section should summarise how the TTC will be at the end of the strategy. Try to describe how the future state relates to the principles, aspirations or philosophies described in Section 2. If there are any new or changed principles, aspirations or philosophies, they should be detailed here.

This section should nominate the span of the strategy in years (usually three or five years) and any characteristics of the TTC that will be different from the current state described above.

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Targets

Nominate targets to be achieved by the end of the strategy in this section. Select targets that will demonstrate the success (or failure) of the strategy.

Wherever possible, targets should be based on metrics described in the Performance section above. There is no ‘right’ number of targets but less is normally better, as long as the targets will clearly demonstrate that the strategy has been achieved at the end of its life. It follows that the targets should measure the important things in the strategy. For example, if the future state includes increased enrolments, it would be important to set a target around enrolments.

Wherever possible, use numbers to be specific about changes. For example, don’t use ‘increased student enrolments’. Instead, use ‘300 student enrolments per annum’.

Where numbers are not feasible, be specific about what will be achieved so that there will be no ambiguity in the future about whether it was achieved or not. For example, don’t use ‘improved accounting discipline’. Instead use, ‘all TTC revenue and payments will be processed through a single accounting system exclusively’.

A suggested table format with examples is provided below.

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Table 3 - Strategic targets

Metric	Current performance	Target
Total revenue	$354 950	$475 000 per annum
Profit / loss	-$12 164	$20 000
Number of students	227 (87 year 9, 81 year 10, 59 year 11)	300 per annum
Cost per student per annum	$1 564	Less than $1 625
Number of courses	7	8
Number of qualifications attained	91	More than 110 per annum
Accounting discipline	Inadequate	All TTC revenue and payments will be processed through a single accounting system exclusively
Etc.

Strategy

This section of the document describes what the TTC plans to do over the coming years in two aspects:

What the TTC plans to do to meet predicted challenges, events and trends

Reiterate and expand on the predictable impacts to the TTC already mentioned in Section 3 (e.g. expected teacher retirements, changes to legislation, nearby training facilities due to open, major employers shutting down, falling enrolments, parent and student expectations, etc.). Explain how the strategy responds to those events and trends.

What the TTC plans to do to fulfil its principles, aspirations and philosophies.

Write here the rationale for the strategy – for example, why you are choosing to grow enrolments or invite a new school to the cluster. These choices are often explained by referring back to the principles, aspirations or philosophies of the TTC.

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Strategic initiatives

This section describes the initiatives that have been chosen which, if delivered successfully, will deliver on the overall strategy and targets.

Each activity or initiative should be described briefly and its contribution to the targets in Section 4 nominated.

It is not necessary to provide exhaustive detail about each initiative in this part of the document. The level of detail should only be enough so that a stakeholder who is familiar with the TTC understands immediately what the initiative is. Naturally, it is vital that the stakeholder group has high confidence that each initiative is achievable and will contribute to the targets or respond to events and trends in the way that is specified. Sometimes it may pay to mention the initiatives which were considered and discarded, to ensure they do not resurface.

Approving the strategy does not lock in the initiatives and their results. It must be recognised that no-one can predict the future with certainty and when time comes to undertake an initiative it is possible that unrealistic optimism, unforeseen circumstances or changes in the TTC’s environment have made it unwise to proceed. The annual business planning process is the opportunity to re-plan initiatives based on new information, dropping out any that have become unviable and adding any new and promising ideas which will help to deliver the strategy.

Some suggested wording and a table format with examples is provided below.

Below is a list of initiatives that will work together to achieve the future state described in Section 4 above. These initiatives have been selected and prioritised by working with a range of TTC stakeholders. Each initiative’s contribution to strategic targets is nominated below.

Table 4 – Strategic initiatives and targets

Initiative	Cost	Timing	Contribution to targets
Market automotive courses Increase awareness and enrolments in automotive by adding feature in newsletter before enrolments close each semester. Commence accepting mid-year enrolments for automotive.	$600 per annum 10 days’ effort from existing staff.	Commences mid-year 2014.	Increase automotive enrolments by 15 students per annum Increase revenue by $22 500 per annum Increase of 6 qualifications per annum
Third party usage Develop a revenue stream by engaging a 3rd party to use TTC facilities during idle hours (Tuesdays and weekends)	$2 500 25 days effort from existing staff.	Revenue commences Jan 2015.	Estimated revenue $25 000 per annum
Offer a new course Survey all Yr 8 students in cluster and their parents for course preferences, select new course, hire teacher, acquire equipment, arrange auspicing and update PSS.	Up to $30 000 in equipment costs Up to $70 000 per annum in auspice, teaching and consumable costs 20 days effort from existing staff.	New course from Jan 2016.	Offer one new course Target of 38 enrolments per annum. Estimated revenue $57 000 per annum Increase attainment of qualifications by 17% (15 quals)
Address governance committee concerns with TTC accounting Work with DET to establish separate accounting for the TTC. Train staff and ensure all transactions are accounted for. Include TTC books in annual auditing.	$5 000 $1 000 per annum 20 days effort from existing staff	Initiative complete by Jul 2015.	All TTC revenue and payments will be processed through a single accounting system exclusively
Invite new school to the cluster Funding has been rejected for a neighbouring TTC cluster – take this opportunity to invite the nearest school in that cluster to join the TTC. Update the PSS if successful.	4 days effort from existing staff	Apr 2014	Target of 20 enrolments per annum Estimated revenue $30 000 per annum Increase of 8 qualifications per annum
Etc	Etc	Etc	Etc
Overall	$37 500 one-off costs $71 600 per annum 79 days effort from existing staff	Strategy delivered by Jan 2016	73 extra enrolments per annum Revenue increased by $134500 per annum One new course offered Increase of 29 qualifications per annum Accounting discipline target met.

Business plan

This section describes in detail the first year of the strategy. It should be very specific about what will be achieved in the coming year and what proportion of the targets will be achieved by then.

This section should also spell out the budget for the coming year including both the cost of operating the TTC and the cost of delivering initiatives for the coming year.

If there are new stakeholders or the operation of the TTC is not well understood, it may be appropriate to use this section to briefly describe the normal operations of the TTC and any detailed changes that can be thought of as business as usual. For example, an intent to recruit two part-time teachers to replace a retiring full-time teacher, or the annual renewal of an equipment maintenance contract.

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Initiatives

Each strategic initiative that will be delivered in the coming year should be described in detail, including justification and rationale for estimates of costs and outcomes.

An example and a table format are provided below. Repeat the table as necessary to describe all the initiatives in the coming year.

In the coming year, the following initiatives will be undertaken.

Initiative 1 – Invite new school to the cluster
Description	An application to the Federal Department of Education for a TTC in a nearby district has been rejected recently. The closest school to us in that cluster was a keen signatory to the rejected PSS and has expressed an interest in joining another cluster rather than simply paying a fee for access to VET courses at another TTC or similar facility. This initiative is to act on their interest and invite them to join our TTC cluster, negotiating terms and conditions which are advantageous to both parties and making the necessary changes to the Memorandum of Understanding (MoU), governance charter and Project Specific Schedule (PSS). This initiative aligns with the strategic intent to grow the TTCs enrolments as a way to achieve financial sustainability.
Resources	TTC Manager and the chair of the TTC governance committee will be needed to approach the other school, negotiate terms and work with DET to draft changes to the MoU and PSS.
Cost	There is no anticipated outgoing cost. Approximately one day’s effort from the Chair of the governance committee Approximately three days’ effort from the manager of the TTC.
Timing	Commence 1 Feb 2014 Terms agreed by 1 Mar 2014 Charter and MoU updated by 15 Mar 2014 Updated PSS approved by DoE 1 Apr 2014
Outcomes	It is estimated that the new school will contribute approximately 20 extra enrolments to the TTC per annum, increasing revenue by approximately $30 000 and qualifications attained by 8 per annum.

Initiative 2 title
Description	Include: A description of the initiative How the TTC will benefit from the initiative The scope of the initiative (i.e. what will be done)
Resources	Nominate the people required to deliver the initiative Describe any equipment that is needed Identify any ongoing consumables, maintenance, management effort, etc.
Cost	Any one-off (capital) costs Include an estimate of any ongoing costs or effort.
Timing	Milestone Date Milestone Date Milestone Date Etc.
Outcomes	Estimate the contribution this initiative will make to strategic targets

Initiative 3 title
Description	Include: A description of the initiative How the TTC will benefit from the initiative The scope of the initiative (i.e. what will be done)
Resources	Nominate the people required to deliver the initiative Describe any equipment that is needed Identify any ongoing consumables, maintenance, management effort, etc.
Cost	Any one-off (capital) costs Include an estimate of any ongoing costs or effort.
Timing	Milestone Date Milestone Date Milestone Date Etc.
Outcomes	Estimate the contribution this initiative will make to strategic targets

Outcomes

Summarise the outcomes from the tables above, showing how much will be achieved by the end of the coming year and the remaining gap to the long term strategic targets.

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Budget

Provide a forecast of the TTCs operating costs for the coming year, including the cost of the initiatives detailed above.

It is recommended that the format should show cashflow (usually necessary in organisations which do not have large cash reserves) to demonstrate when the TTC can afford to spend money on initiatives.

If initiatives can not be funded from cashflow, this section should describe how funds will be raised (e.g. via bank loan, overdraft, etc.). If the fundraising activity is significant (e.g. seeking private sector grants or establishing a new partner relationship) then the fundraising activity should appear as an initiative in the appropriate sections above.

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