You own a boutique risk management firm, Risk Expert Pty. Ltd. Your firm focuses on helping potential new businesses in conducting risk assessment. You have been approached by Sue Green. Sue is planning to set up a new childhood centre. Information about Sue Green and her business plan is outlined below.
Sue Green graduated with Bachelor of Education (Early Childhood) from one of the Australian top universities in 2010. After graduation, she started to work at Beezzy Kids Early Childhood Centre in Maroubra, NSW. The centre is one of the three childcare centres owned by Brilliant Bees Pty. Ltd. All the three centres located in the NSW. The centre in Maroubra was the first centre opened by Brilliant Bees Pty. Ltd. Sue joined the centre two months after it was opened. She gets a chance to see at firsthand how the business has expanded since then.
Sue takes the opportunity of working at Beezzy Kids to equip her with the necessary skills andknowledge about the operational aspects of a childcare centre. It has been Sue’s ambition since hergraduation that one day she will operate her own centre. She has been working tirelessly in trying to achieve this ambition.
Starting from the beginning of last year, that is after working for several years at the centre, Sue has been preparing a proposal to open her own childcare centre. She conducted a comprehensive analysis of the competition and the demand in the market. Apart from talking to the owner of Brilliant Bees, Sue also conducted a survey among relatives, friends and the general public, to see if a childcare business has a good potential. She also collected other relevant data from various reliable sources, including from the Australian Bureau of Statistics (ABS).
Her analysis reveals that there is a huge opportunity in this market. Sue has determined that there is more than enough demand for childcare services, especially in highly populated areas within 50 km radius from the Sydney Central Business District (CBD). Based on her experience and knowledge in childcare operation, Sue is very confident that she will be able to run a very successful childcare centre.
However, establishing a childcare centre requires huge capital outlay. Sue herself does not have sufficient capital to establish the centre. Coming from an average family implies that assistance from her parents would not be a viable option. Borrowing from a bank is also not an alternative for Sue as her business is yet to start and she does not own any assets that can be used as collateral. In order to proceed with her plan, she needs to find an investor who is willing to provide her with financial support.
Three weeks ago, when she was walking in the Sydney CBD, Sue bumped into her high school friend, Mary Wilson. Given that they had lost contact since their high school days, they decided to catch up over a coffee. During their conversation, they both talked about their career and plans for the future.
Sue told Mary that she is planning to start her own childcare centre but having difficulties getting the necessary capital to start the business. She also explained to her that she is currently looking for an investor to help her finance the business.
Mary told Sue that her uncle, Nick, might be able to help her. Nick Wilson is a wealthy businessman who is known to have been helping many young entrepreneurs to start their business. Mary asked Sue if she wants her to arrange an appointment with Nick. Sue was glad to hear that. A week later they went to see Nick. Sue explained in detail about her business proposal to Nick. She also showed Nick the comprehensive business analysis that she has done. Nick agreed that a childcare business has great potential.
However, being a highly experienced businessman, Nick is very careful in analysing risks associated with any business venture, especially when considering whether to invest in a new business. Nick told Sue that she needed to provide him with a comprehensive risk assessment for the childcare centre that she is proposing. Sue needs to identify the potential risks and explain how she plans to address those risks. He will make his decision based on the risk assessment report. According to Nick, if he is happy with the risk assessment report, he will fund the business. Nick also told Sue that he will exit the business within five years, provided that he can get a reasonable return within that period. After five years (or earlier), he will sell all his shares in the business to Sue.
Sue is very happy with the positive outcomes of the meeting with Nick. After the meeting, she makesan appointment to see you at the Risk Expert Pty. Ltd.’s office.In your meeting with her, Sue has requested for your help to prepare the risk assessment report for her proposed business.
THE TASK
Prepare the risk assessment report for Sue.You are required to identify various risks for Sue’s venture.These risks should cover the following areas:
▪ At least three of the risks must be related to the compliance with legislation/regulation with which the organisation will need to, or it would be wise to, comply (workplace standards, codes of conduct and so on).
▪ At least two of the risks must be related to the operational aspects of the business [operational risks].
▪ At least one of the risks must be related to information technology [IT related risks]
▪ At least one of the risks must be related to social or environment [social or environmental
risk]
▪ At least one of the risks must be related to the financial or political aspects [financial or political risk]
In carrying out the risk assessment for Sue’s business you should use as many of the 21 risk analysistools that you have been exposed to in this unit. Note that not all tools are relevant to this case study and so it is up to you to determine which of the tools are appropriate in helping to prepare the risk assessment report.
In preparing your report you are to follow the format detailed below.
Title page:include client’s name in full and the Risk Management Pty. Ltd.name in full,consultant’s name and date. Please give your report an appropriate title. Consider creating andusing a professional looking logo. This title page will include no information that suggests that the report is for a student assignment. Include student information in the TSBE assignment cover sheet.
Executive summary:Briefly explain the purpose of the report, the client and the client’sneeds, the method of analysis used for the investigation, an overview of conclusions reached (findings) and clear recommendation/s based on the analysis completed, consistent with theclient’s purpose of commissioning the work.
Table of contents:generatedautomaticallythrough Word. You can generate a TOC automatically in Microsoft Word– Go to “References”Table of Contents.
Introduction: An introduction is different to an abstract. Briefly mention the client, the preparers, and the aim and purpose of the investigation. Start page numbering from page 1 from the start of the introduction. Use third person for your report.
The body of the report: divided into subsections with a heading for each.Do not call anyof this section “body”:Name it appropriately for your purpose. Include tables/matrices whereappropriate. Give each table or figure a number, for example “Table 1”, or “Figure 2”.Also give each figure and table a title. Refer to each table or figure within the text of the report, stating, for example “Figure 1”.Explain within the text what each figure or table shows. State any sources as a citation with a matching reference in a list of references. Separate your analysis and results.
Conclusion: will relate the results of the risk management investigation set out in the body, to the purpose for writing the business report. Separate the conclusions from the recommendation/s.
Recommendation: Write a clear recommendation that addresses the purpose of the work you have done. Remember why Sue Green has commissioned the risk management work.
Reflections:Provide a reflection on what you found interesting in your study of Enterprise Risk Management.
References: Set out in Harvard style. A web address alone is not a full reference.
Task Length: Maximum length 3,500 words (excluding tables, figures, and references.