Preparing to Plan and to Manage

Unit 4The Operating Plan

You are the Owner and Operator

• What does that mean?

1. Planning2. Organizing3. Directing4. Controlling all aspects of the

business

• Primary focus is on:•PEOPLE – Employees, Customers, Vendors

(who you buy from)– Monthly meetings with these groups

looking for FEEDBACK and giving FEEDBACK

•$$$– Monthly Income Statements must be

created:»Financial report stating SALES and

EXPENSES »Calculate either: LOSS, PROFIT or

BREAKING-EVEN

Planning: the act of setting goals, developing strategies

and outlining tasks and timelines to meet your

business objectivesThree types:1. Strategic Plans – long term (3 – 5 yr goals)2. Tactical Plans – midrange (within the Year)3. Operational Plans – short-term, small goals

that help you reach your tactical plan• Day-to-day budget, policies, rules

Establish a positive Climate – business atmosphere

• Three key elements:1. Image

– Strength of your brand– How are you perceived??

2. Team building– With your employees– Happy employees work harder!

3. Communication– With employees, customers and vendors

As an Owner, develop your Management Skills

• What type of manager are you?1. Power-oriented style

1. Use power to maintain control

2. Routine-oriented style1. More concerned with the daily operations running

smoothly than long-term goals2. Allows the employees to independently follow the

“rules” and just enforces them

3. Achievement oriented style1. Open to new ideas, rewards behavior, seeks and

encourages feedback 2. Reflects on daily happenings

Terms

• Define all terms in Chapter 14– Pg. 304-316– Complete the 10 mult choice questions

Human Resource Management• A business major that prepares you to:

– Hire the right employees that are a fit to the company’s mission statement and core values

– Qualified through education and experience– Willing and able to perform

– Retain the employees through professional development – LOYALTY and HAPPY emps

– OFFER GROWTH AND A CAREER PATH

– Maintain healthy relationships through payroll and medical and educational benefits administration

– Expert on employment law – when to fire the employee; how to avoid being sued by employees

• Know the employees’ rights and the employer’s rights

– Expert on Reading a Resume– Expert on Conducing an Interview

• Resume gets you the interview– Shows your qualified on paper

• Interview gets you the job offer

http://www.youtube.com/watch?v=S1ucmfPOBV8&feature=related&safety_mode=true&persist_safety_mode=1

http://www.youtube.com/watch?v=gHXKitKAT1E&feature=related&safety_mode=true&persist_safety_mode=1

Employee Handbook and Human Resource Management:

Policies • Page 1: Cover page – include company name, logo, slogan,

address, ‘EMPLOYEE HANDBOOK

• Page 2: Policies – in Table formatIssue Policy Consequence1. Telephone and Computer Use Policy

• Cell Phone Usage• Internet Use at Work• Internet Postings and Social Media• Email Policy (work and personal)

2. Attendance Policy- lateness AND consequences3. Family Medical Leave - 6 weeks or 12 weeks; write the

reason why they could use FMLA – search Google

4. Pay and Compensation Package (write BELOW for your policy!)

• Employees are paid on the 1st and 15th of each month by direct deposit ONLY– Required Tax deductions: Federal, State,

Local, Social Security, Medicare, Unemployment

– Optional Deductions offered: 401k plan, 529 plan, Medical Benefits, Dental Benefits, » 401k and 529 plans offered through Vanguard

or Fidelity» Health Benefits offered through Personal Choice» 8% of gross pay

6. Vacation Days– how many7. Holidays – list which ones you are celebrating8. Personal Days – how many8. Sick Days – how many9. Equal Employment Policy – • write the Law, search Google for EEO 10. Termination

– list 5 reasons you can terminate ‘on the spot’11. Drug and Alcohol Policy 12. Dress Code Policy 13. Tuition Reimbursement

– % you are willing to contribute for pursing a relevant degree or training

Laws to Know!

• FMLA: Family Medical Leave Act• How can you qualify:

– The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons

– with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave.

Eligible employees are entitled to:

• Twelve work weeks of leave in a 12-month period for: 1.the birth of a child and to care for the newborn

child within one year of birth; 2.the child for adoption or foster care and to

care for the newly placed child within one year of placement;

3.to care for the employee’s spouse, child, or parent who has a serious health condition;

4.a serious health condition that makes the employee unable to perform the essential functions of his or her job;

5.the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty;”

EEO: Rooted in the Civil Rights Act of 1964

• The U.S. Equal Employment Opportunity Act is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information.

• It is also illegal to discriminate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.

Payroll Systems – p.305

• You must decide how much is each employee “worth”…including yourself!

• Budget for payroll expense each year

• One of your greatest expenses• Tied to law – TAXES!

– www.salary.com

1.Calculate Gross Earnings2.Calculate Payroll Deductions3.Prepare Payroll Records4.Preparing Paychecks5.Record payroll info as an expense of

business (a bill to the owner)6.Report payroll info to the federal, state,

and local governments

1. Calculate Gross Pay per Emp.

• Salaried employees– No matter how many hrs they work,

they earn the same amount $ each pay period

• Hourly employees– Only get paid by the hour

• Gross Salary is Based on education and experience and ZIPCODE– Cost of living!

2. Calculate Payroll Deductions

Required Deductions by Employer

• Federal taxes • (based on income range)

– From 15% - 38%• PA State tax

– 1%• Local Tax

– 1%• Social Security contribution

– 4.2%• Medicare

– 1.5%• Unemployment tax

– 3.5%

Optional Deductions• 401k Retirement Planning

– $ gets invested into the Stock Market (stocks of your choice)

• Usually between 1-10% of gross salary

• Employee chooses the Firm to invest their money – Vanguard and Fidelity

• Medical and Dental Benefits– Ranging from 0-8% depending on the

plan you choose and if the employer contributes to your plan

• AETNA• PERSONAL CHOICE – Blue Cross• Horizon• Cobra• Keystone Health

3. Prepare Payroll Records• use payroll software or hire a 3rd

party do perform their payroll tasks (banks)

4. Preparing Paychecks– Select a bank to issue the checks– Employees must use Direct Deposit!– NET PAY = Gross Salary – Deductions

5. Record payroll info as an expense of business (a bill to the owner)

6. Report payroll info to the federal, state, and local governments

• Manager/Director of Operations/Operator– This is You….$50,000/year

• Customer Service Representative • Cashier• Cook/Waitress/Stock Representative• US Minimum Wage: 7.25/hr

– Work Day – 8 hrs - $58– Work week – 40 hours - $290– Bi-weekly pay - $580– 26 pay periods a year = $15, 080: Gross Salary

• Total Gross Salaries – No more than $100,000

Employee Titles in a Small Business

Know your Expenses!

Create Monthly Income Statement:

• analyzing your Sales – Expenses• Goal: to have a profit

• Payroll is a Major Expense of doing Business

Part 8: The Operating Plan Assignment

1. Create a Payroll schedule for a Max of 5 employees; $100,000 yearly budget

• Use www.salary.com to assign each employee, including yourself, a Gross Income and to find a job description

• Attach a Word document listing each employee’s name, Job Title, Gross Salary, Part-time or Full-Time status, Salaried or Hourly Employee, and a Job Description• Job description includes responsibilities and

expectations• At least ONE Complete Paragraph

2. Plan your Supplies and Equipment Needs• List each and include the Vendor

3. Write an employee policy for conduct and consequences

Employee Handbook and Human Resource Management:

Policies • Page 1: Cover page – include company name, logo, slogan,

address, ‘EMPLOYEE HANDBOOK

• Page 2: Policies – in Table or outline format– Telephone and Computer Use Policy

• Cell Phone Usage• Internet Use at Work• Internet Postings and Social Media• Email Policy

– Attendance Policy- lateness consequences– Family Medical Leave - 6 weeks or 12 weeks; write the

reason why they could use FMLA– Pay and Compensation

• Employees are paid on the 1st and 15th of each month by direct deposit

• Vacation Days– how many• Holidays – list which ones you are celebrating• Personal Days – how many• Sick Days – how many• Health Benefits

– If you opt to use our benefits, Personal Choice is the provider, 8% of gross pay

• Equal Employment Policy – write the Law, EEO • Termination – list reasons you can terminate ‘on

the spot’• Drug and Alcohol Policy • Dress Code Policy • Tuition Reimbursement

– % you are willing to contribute for pursing a relevant degree