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ict application for fish enterprise management - ACP Fish II PDF

80 Pages·2013·2.15 MB·English
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Annex 6 ICT APPLICATIONS FOR FISH ENTERPRISE MANAGEMENT Advance Fisherfolks Management Training Course (AFTC) FIVE – DAY TRAINING MANUAL REGINALD OLIVER SEVERIN NOVEMBER 2012 A GUIDE TO FISH ENTERPRISE MANAGEMENT Computer-Based Advance Training Manual Table of Contents Acknowledgement .............................................................................................................. ii Foreword ........................................................................................................................... iii Training Objectives ........................................................................................................... iv Topics Covered ............................................................................................................. v - vi About Sponsors and Authur ............................................................................................... ix Modules …………………………………………………………………..……..…. 1- 67 MODULE I UNIT 1: MANAGEMENT AS A WAY TO INCREASE PROFITS Fishers are continually being exposed to changes that compel them to adjust their operations in order to increase profitability and competitiveness. These changes stem from the market, the development of new technologies and policy shifts. They impact on the type of enterprises held, the quantity of inputs and supplies required and the method and destination of fish products sold. Better management skills are needed by fishers to respond to these changes. This Unit starts with an examination of management and the decision making process and concludes with a number of practical exercises. RATIONALE......................................................................................................................2 SESSION 1.1 WHAT IS MANAGEMENT?...............................................................3 SESSION 1.2 WHY IS BUSINESS MANAGEMENT IMPORTANT?.....................7 UNIT 2: THE PLANNING PROCESS The purpose of planning is to place the fisher in the best possible position to make decisions about the future. Once the fisher has defined his/her objective(s) the next step is to develop a plan to achieve them within the opportunities offered by the marketplace. This unit analyses the planning process! The real value of creating a fishing enterprise plan is not in having the finished product in hand; rather, the value lies in the process of researching and thinking about 2 Copyright © ROSSEAGR SERVICES (2012) your business in a systematic way. The act of planning helps you to think things through thoroughly, study and research if you are not sure of the facts, and look at your ideas critically. It takes time now, but avoids costly, perhaps disastrous, mistakes later. RATIONALE......................................................................................................................8 SESSION 2.1 THE PLANNING PROCESS...............................................................9 SESSION 2.2 WHAT ARE THE FISHER'S OBJECTIVES?....................................13 SESSION 1.3 HOW DO FISHERS DECIDE?..........................................................14 UNIT 3: UNDERSTANDING FISHING AS A BUSINESS (WITH INTRO TO COMPUTERS) This Unit explains the concept of the fishing operations and its different enterprises and introduces the trainee to some of the key terms used in management. These are costs of sales, gross income, gross margin, enterprise profitability and gross profit (net income). RATIONALE .....................................................................................................................16 SESSION 3.1 UNDERSTANDING AGRICULTURAL ENTERPRISES ................16 Gross Income .............................................................................................................16 Costs of Extraction ..................................................... Error! Bookmark not defined. Fixed & Variable Costs ..............................................................................................19 SESSION 3.2 GROSS MARGIN................................................................................21 SESSION 3.3 ENTERPRISE PROFITABILITY ........................................................21 SESSION 3.4 GROSS PROFIT (NET INCOME)...................................................... 23 MODULE II UNIT 4: ACCOUNTING FOR FISHERS Accounting for Agriculture deals with the collection and analysis of financial information (data) and resources. The knowledge of the type, quality, and quantity of resources available (Assets) and the obligations or debts owned by the farm (Liabilities) are needed to ensure that all resources are managed properly. Fishers are required to know and keep up-to-date records of sales (Income) and costs (Expenses) as it impacts on overall profitability. The training also describes the calculation of Net Worth, examines the definition and use of and preparation of Financial Statements, and assists the fisher in analyzing these financial statements. 3 Copyright © ROSSEAGR SERVICES (2012) The training course seeks to improve fishers’ appreciation for accounting and provide guidance for developing, interpreting, and using accounting and record keeping systems. RATIONALE .....................................................................................................................24 ACCOUNTING FOR FISHERS .......................................................................................24 SESSION 4.2 RECORDS AND ACCOUNTS...........................................................26 SESSION 4.3 INTRODUCTION TO FINANCIAL RECORDS................................29 SESSION 4.4 DEFINING FINANCIAL ACCOUNTS..............................................34 SESSION 4.6 BALANCE SHEET.............................................................................38 SESSION 4.7 PROFIT AND LOSS STATEMENTS.................................................40 SESSION 4.8 INTERPRETATION AND ANALYSIS OF ACCOUNTS…..…..….44 MODULE III UNIT 5: CASH FLOW MANAGEMENT This Unit will examine the use of the Cash Flow in planning and as a tool for evaluating the financial performance of the enterprise as a whole. A cash flow budget guides decision makers in assessing whether the enterprise is able to generate a cash surplus or incur a cash deficit and to find the time of the year where additional financial resources may be required. The unit reviews the concept of cash flow and discusses ideas for improving cash flow performance. RATIONALE……………………………………………………………………………47 SESSION 5.1 DEFINITION OF CASH FLOW…………………………………….47 SESSION 5.1 CASH FLOW ANALYSIS……………………………….………….48 CASH FLOW MANAGEMENT……………………………………………….………..49 CASH INFLOWS……………………….………………………………………………49 CASH INFLOWS……………………….………………………………………………50 SESSION 5.3 PRACTICAL APPLICATION OF CASH FLOW...…….………….48 SOLUTIONS TO CASH SHORTFALLS………………………………………………53 UNIT 6: PARTIAL BUDGETS AS A DECISION-MAKING TOOL Management is concerned with the ways in which the fisher obtains and organizes scarce resources to achieve the goals set by the business or family. Most decisions in a 4 Copyright © ROSSEAGR SERVICES (2012) small fishing enterprise involve only one aspect of the entire operations; it may be the need to upgrade the boat, adopt a new fishing technology or choose between one technology, method, or technique over another. Partial budgeting is a valuable instrument that assesses the effect of marginal changes on overall profitability and enables the decision maker to select between different. This Unit examines the use of Partial Budgeting in planning as a tool to assess the profitability associated with changes that effect only part of the business. RATIONALE....................................................................................................................54 SESSION 6.1 THE USE OF PARTIAL BUDGETING IN PLANNINGError! Bookmark not defined. SESSION 6.2 STEPS IN PREPARING A PARTIAL BUDGET .............................56 UNIT 7: FISHING PERFORMANCE ANALYSIS A performance analysis indicates if the fishing operation is functioning as it should. Analysis of performance can be used to identify why certain operations are more profitable than others. Data needs to be collected that accurately reflects the performance and a set of standards should be selected for measurement. A performance analysis should be conducted periodically. Performance indicators can draw on data collected over time from a particular one operation/fisher or to other fishers located in the area. RATIONALE .....................................................................................................................60 SESSION 7.1 SEQUENCE FOR UNDERTAKING PERFORMANCE ANALYSIS 60 SESSION 7.2 BENCHMARKING............................................................................. 64 SESSION 7.3 ANALYSING OVERALL PERFORMANCE .................................... 64 REFERENCES About the only thing that can be achieved without much effort is failure! Wes Izzard 5 Copyright © ROSSEAGR SERVICES (2012) ACKNOWLEDGEMENTS I give special thanks to the many individuals who has helped to develop this training program which started out in 2005. Of particular importance is Mr. Norman Norris of the Fisheries Division for his continued support of the Basic Course leading up to this Advance Course along with his colleagues at the Division. Special thank you goes out to Sandra Grant of the ACP FISH II Regional Manager for the Caribbean, Mr. Gustavo Miranda, ACP Fish II Programme Coordinator, and his colleagues Cristina Gonzalez Martin, John Purvis, and Alice Bulgarelli in Brussels who made this management training programme possible. I wish to acknowledge the valuable contributions of Marie-Bethsabee Santana, Michaelle Nicholas, Mara Abraham, Stacy Jacobs, for keyboarding and data entry services and Derrick Theophile in providing data. I thank the Hon. Prime Minister, Roosevelt Skerrit for extending the opportunity to work with the Fishers in Dominica and to my children and my dearest mum, Rosianna Rosette Williams who remains my greatest inspiration. I thank GOD for the gift to create and teach. Thank you Lord! 6 Copyright © ROSSEAGR SERVICES (2012) FOREWORD Dominica has chosen the cooperative business structure as the medium by which fisher folk organizations are formed and developed. There are ten (10) Primary Fisherfolk Organizations (PFO) that works at the community level addressing common problems of fishers. The National Association of Fisherfolk Cooperative (NAFCOOP) is a national umbrella organization that comprises the ten PFO. It was established for the purpose of getting fisherfolks to be more involved in the decision making process and to be a partner in co-management with the Government of Dominica on matters relating to fisheries. NAFCOOP functions as the advocacy group for all its members. The Government of Dominica would like to give more responsibility to these organization such as the maintenance and management of Fish Aggregating Devices (FADs) sponsored by Government of Japan under the Fisheries Master Plan pilot project, license to import fishing gear and tackle, and to serve as the medium through which it could most effectively grant rebate on fuel to fishermen. The Cooperatives do not yet possess the necessary capacity to do. The PFO’s are at varying stages of development, in-terms of strengths and level of organization. Some are well organized with physical infrastructure, serve as marketing agents for their members, and are experience in financial management. Others have no infrastructure, assets or any defined strategy of achieving economic viability. This poses a disincentive to the members which is the main cause of such groups falling apart. There is a great need for institutional strengthening and capacity building among the primary fisheries groups. This will allow for some degree of organization and growth of the local economies of fishing communities and improvement in the livelihood of fisherfolks. This training is therefore designed to build the necessary capacity and to strengthen the membership of NAFCOOP for financial and operations management and to boost the confidence of the members of the PFOs. This will help to strengthen and build the smaller primary cooperatives which comprise NAFCOOP. Capacity building of these institutions will enable them to take up their role as a group of direct stakeholders in the management and development of the fishing industry in Dominica. This Computer-Based Management Training Programme (CBMTP) is prepared for the Fisheries Division based on recommendations and suggestion of the Agricultural Management, Marketing and Finance Service of the Food and Agriculture Organization (AGSF) , the Young Farmers Programme (YFP) Training Programme (2005) and the Basic Fisherfolks Training Course (BFTC). The programme has been designed particularly for use in Dominica amongst fisherfolks desirous to developing commercially-oriented and technologically-driven fishing enterprises. The manual addresses the current challenges facing fishers, their need for a market-oriented approach to their trade and the development of management and computer skills to enhance their competitiveness in both domestic and regional markets. 7 Copyright © ROSSEAGR SERVICES (2012) The training is comprehensive in the range of topics covered and includes a combination of classroom instructions and presentations, practical computer-based or aided exercises, participatory group discussions and a model exercise. The main points of each module are highlighted by a presentation of a basic computer application with focus on Microsoft Excel application in fishing business management training. The topics covered in the training will be delivered in three modules in actual training situations and the sharing of experiences of many fisher folks operating in Dominica and the experience gained has been incorporated into the training course material. OBJECTIVES OF THE TRAINING MANUAL The purpose of this training manual is to provide Dominica’s fishers, fisheries regulators, and fishers’ co-ops with materials on the basic principles and tools of management. Some fishers are generally technically proficient in fishing but often lack understanding of business, internet and computer technologies (ICT), and economics and their use in planning and operating profitable, efficient, and productive enterprises. This programme provides advance training to these fishers. It is expected that with this exposure to computer based business management training, they will be better equipped to improving their management skills and love for record keeping. Furthermore due to technological advances, smaller vessels operators/fishers are getting much more effective at locating and catching fish and they are increasingly engaged in fisheries that aim for marketing the products on the international market. Due to increased pressures on inshore areas there is now mounting pressure to “professionalize” the small-scale fisheries sector so as to make fishing effort commensurate with the productive capacity of the resources. The Manual and spreadsheets are useful tools for trainers, fisheries officers, fisheries co-operative management, and other agricultural extension personnel to provide fishers more specifically with: 1. An understanding of the principles of technical and financial efficiency; 2. Procedures for identifying technical and economic constraints in fishing; 3. Computer-based methods to analyze the performance of individual enterprises and operations; 4. Skills in basic planning and management that assist fishers to respond to new market opportunities. 5. An understanding that the principles and tools of management and planning is important for all fishers. 6. An understanding and greater recognition of computer-based technologies in fisheries management and fishing. 8 Copyright © ROSSEAGR SERVICES (2012) ABOUT THE SPONSORS The ACP Fish II Programme, entitled "Strengthening Fisheries Management in ACP Countries" is funded under the 9th EDF (€30M). Weak and ineffective governance of the world fisheries has led to the widespread degradation and depletion of the natural resource base, resulting in greater poverty among fishing communities, a decline in food security and, in general, in sub-optimal use of fisheries resources. Weak policies and institutional arrangements and ineffective legal frameworks, combined with a lack of sectoral strategy, have been widely acknowledged as being a fundamental obstacle to effective fisheries management, and therefore to poverty alleviation and food security. Ineffective governance has also resulted in high incidence of Illegal, Unreported and Unregulated (IUU) fishing depriving ACP countries of substantial economic revenues. Given that millions of people in ACP countries are dependent on fisheries for livelihood and nutrition, it is crucial that ACP countries strengthen fisheries management, both at the national and regional levels, by developing, implementing and enforcing sound fisheries management measures so as to ensure availability of fish to local communities, fish processors and exporters. Effective and sustainable management of fisheries resources is thus the most important pre-condition to continue harvesting social and economic benefits from fisheries and fish trade. The ACP Fish II Programme, which became operational in June 2009, is primarily designed to improve fisheries management in ACP countries and to reinforce regional cooperation for the management of shared stocks. 9 Copyright © ROSSEAGR SERVICES (2012) ABOUT THE AUTHOR Reginald Oliver Severin (ROSSE AGR SERVICES) Mr. Reginald Severin is the manager of ROSSE AGR SERVICES. He provides business management and entrepreneurial development extension services to small businesses and producers of the agricultural and fisheries sectors in Dominica. Services offered are based sound economic and business principles in agricultural production and aims to reinforce the existing technical-oriented extension services. These services include but not limited to business planning, advising, forecasting, and management capacity development through training. ROSSE AGR services ‘seeks to support and strengthen opportunities that enhance agricultural sustainability and provides the atmosphere for the development and protection of agriculture, rural communities and peoples within a socio-economic and cultural framework.’ Mr. Severin vision lies in promoting agriculture and facilitating improvements in agricultural productivity and management so that agriculture may become an economically viable and socially equitable industry in Dominica. Mr. Severin posses a Certificate in Farm Management and received practical training in small Business Management at the Agricultural-Technical Institute of Ohio State University and Fort Valley State University in Georgia, a Bachelor’s degree with upper class honors in Agriculture Business Management, and graduate studies in Business Statistics, Business Law and Ethics and Macroeconomics at Cameron University in Lawton, Oklahoma, USA. In 2000, Mr. Severin obtained professional training in Sustainable Agriculture and Organic Farming and Marketing at the North Carolina State University (Center for Environmental Farming Systems) in Goldsboro, North Carolina. Upon returning home in 2002, Mr. Severin had an assignment at the Woodford Hill Co- operative Credit Union Ltd. where he developed and implemented the Small Business Enterprise Development Programme while working as a freelance agribusiness development specialist providing enterprise development planning assistance and training to both small businesses and financial institutions in Dominica. As one of the first trainer in the Basic Fishermen Training Course (BFTC) specializing in the Management aspects of the training program, Mr. Severin has provided training services for the Fisheries Division since 2005. 10 Copyright © ROSSEAGR SERVICES (2012)

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