FLR4537 - Module 3

DIPLOMA IN MARINE
SURVEYING
Module 3: Business Skills for Surveyors
Paul Russell
MSc, BA (Hons), MIMarEST
Managing Director and Founder
Thamesview Maritime Limited
Updated By:
Allan T Larsen
EurIng, CEng, CMarEng, FRINA, FIMarEST, FCMS, AVI
Managing Director
Larsens Marine Surveyors & Consultants Ltd
Content
1. Introduction to The Module ............................................................................................................ 5
1.1 Introduction............................................................................................................................. 8
1.2 Starting a New Business .......................................................................................................... 8
1.3 Developing an Existing Business ............................................................................................ 11
1.4 Bringing Your New or Existing Business to Market ............................................................... 15
2. Producing a Business Plan ............................................................................................................. 17
2.1 Introduction........................................................................................................................... 17
2.2 Business Planning in Larger Companies ................................................................................ 19
2.2.1 Determining the Best Strategy ...................................................................................... 19
2.3 External Considerations ........................................................................................................ 20
2.3.1 Business ......................................................................................................................... 20
2.3.2 Political: ......................................................................................................................... 21
2.3.3 Economic ....................................................................................................................... 22
2.3.4 Social.............................................................................................................................. 23
2.3.5 Technological ................................................................................................................. 23
2.4 Production of Business Plans................................................................................................. 26
2.5 Business Plan Structure ......................................................................................................... 27
3. Obtaining Financial Support .......................................................................................................... 28
3.1 Introduction........................................................................................................................... 28
3.2 Bank Loan .............................................................................................................................. 28
3.3 Crowd Funding ...................................................................................................................... 29
3.4 Unconventional Sources........................................................................................................ 29
4. Survey Report Writing ................................................................................................................... 30
4.1 Introduction........................................................................................................................... 30
4.2 The Focus of the Report ........................................................................................................ 30
5. Problems Peculiar to the Marine Industry .................................................................................... 33
5.1 Preparation and Information Required ................................................................................. 35
6. Gathering Information – Time Management ................................................................................ 38
6.1 How your time is spent ......................................................................................................... 38
6.2 The Time Audit ...................................................................................................................... 39
6.3 Time Bandits .......................................................................................................................... 39
6.4 Practical Preparation Required ............................................................................................. 40
6.5 Structure and Style ................................................................................................................ 41
6.6 Grammar ............................................................................................................................... 42
6.7 Spelling .................................................................................................................................. 43
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6.8 Presentation .......................................................................................................................... 43
6.9 The Use of Pictures ................................................................................................................ 44
6.10 Writing Reports ..................................................................................................................... 48
6.11 Typical Report Sections ......................................................................................................... 48
6.11.1 Title / Cover Page .......................................................................................................... 48
6.11.2 Declaration .................................................................................................................... 48
6.11.3 Acknowledgement......................................................................................................... 49
6.11.4 Contents Page................................................................................................................ 49
6.12 Report Guide ......................................................................................................................... 50
6.12.1 Abstract or Executive Summary .................................................................................... 50
6.12.2 Introduction ................................................................................................................... 50
6.12.3 Glossary ......................................................................................................................... 51
6.12.4 Main Technical Chapters ............................................................................................... 51
6.12.5 Conclusions.................................................................................................................... 51
6.12.6 References ..................................................................................................................... 52
6.12.7 Listing of References ..................................................................................................... 53
6.12.8 Appendices .................................................................................................................... 53
6.12.9 Completion .................................................................................................................... 54
7. Protecting Your Company and Its Employees ............................................................................... 56
7.1 Introduction........................................................................................................................... 56
7.2 Risk Assessed Action.............................................................................................................. 56
7.3 Insurance ............................................................................................................................... 56
7.4 Pensions................................................................................................................................. 57
7.5 Additional Employment Benefits........................................................................................... 57
8. Financial Skills for Surveyors ......................................................................................................... 58
8.1 Introduction........................................................................................................................... 58
8.2 Budgeting .............................................................................................................................. 58
8.2.1 Profiling Budgets ........................................................................................................... 59
8.2.2 Reporting Budgets ......................................................................................................... 59
8.3 Costing ................................................................................................................................... 60
8.3.1 Direct Costs.................................................................................................................... 60
8.3.2 Indirect Costs ................................................................................................................. 60
8.3.3 Fixed Costs ..................................................................................................................... 61
8.3.4 Overheads ..................................................................................................................... 61
8.3.5 Depreciation .................................................................................................................. 61
8.4 Cash Flow............................................................................................................................... 62
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8.5 Management Accounts ......................................................................................................... 62
8.6 Other Financial Statements ................................................................................................... 63
8.6.1 Accruals System of Accounting ..................................................................................... 63
8.7 Income and Expenditure ....................................................................................................... 64
8.7.1 Profit and Loss Account ................................................................................................. 64
8.7.2 Cash Flow Statement ..................................................................................................... 64
8.7.3 The Balance Sheet ......................................................................................................... 65
Bibliography........................................................................................................................................... 67
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1. Introduction to The Module
Learning Outcomes
On successfully completing this module, you will be able to:
• Produce an effective business plan
• Analyse figures to produce financial forecasts
• Write a professional report
Welcome to module 3 of the Lloyds Maritime Academy Diploma in Marine Surveying.
The maritime industry is a very interesting business to work within. It has many different areas of
concern and has various professions which support the core activity of operating ships engaged in
recreation, national or international trade. The industry is also very complex and ships themselves
are becoming necessarily ever more sophisticated and technically advanced.
The requirement to operate a safe commercial business brings an interesting relationship between
the owners and the industry regulators:
• on the one hand, the owners are intent on maximising their own, or their shareholders,
return on investment (ROI) by maximising income, reducing costs as much as possible; and
• on the other hand, we have the regulators upholding the need for a safe working
environment which will involve a cost.
Therefore, ship owners and ship management companies (the surveyors’ customers) in their pursuit
of lower costs might, for example, be tempted to cut short on the quality of staff, equipment, or
support. This gives an interesting backdrop to the initiation and development of running a marine
survey business.
Given the intricate nature of ships and the shipping industry there can be no substitute for practical
experience, and “hands on” practical experience must also be supported by an in-depth knowledge
of the ship’s structure and/or equipment.
This is the reason why some surveyors come from a seagoing background and hold Certificates of
Competency (CoC) and, Certificates of Equivalent Competency (CEC), or will have developed their
career through shipyards, as well as gaining further relevant academic qualifications.
In either case, the need to gain experience as a surveyor is essential.
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Figure 1: Oil tanker main deck. Image: Tradewinds.
Figure 2: A private yacht and a large commercial cruise ship.
Figure 3: A 2865GT oil/chemical tanker vessel.
Such a diverse industry, from oil tankers to private yachts to chemical carriers (as shown in figures 1,
2 and 3), presents many opportunities for marine surveyors and at times clients will rely heavily on
the experience of the marine surveyor, especially when difficult decisions need to be taken.
Surveying ships may or may not benefit from the support of a CoC but some would say that by far the
best way to learn about the class of vessel, large or small, to be surveyed, is through the practical
experience of operating, building or surveying them previously.
Running a business on the other hand will often be undertaken without prior experience of this. In
fact, the on-board international seafaring career is not the best at all for learning about running a
business.
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Traditionally this aspect would have been undertaken by the mentorship of suitable candidates that
would have had the necessary technical experience. However, in the modern world “mentorship”
implies “additional” staffing which is not usually embraced by every business.
One way of circumventing this problem is with professional development programs, such as this
continuing professional development diploma course. These can be formal or informal. However,
many prospective employers would prefer to see a certificate issued by a third party as an indication
that a person has undergone some kind of formal instruction.
Directed Learning
1. Please follow this link for an example of a websites which aids professional people seeking to
move from seagoing employment to shoreside employment. Careers at Sea.
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1.1 Introduction
The concept of marketing is interesting – some refer to it as a modern term for selling but that is not
quite correct. A more accurate assessment is that “correct marketing makes selling unnecessary”.
The thinking is that if you are providing a product or service at the right price, that someone else
needs, then you will not have to persuade them to buy it. You will still have to promote your service,
of course, but the “hard sell” should not be necessary.
There will always be a discussion about how your products or services meet the needs of customers
or how they can be modified to fulfil the role or, how they might be better than your competitors.
Therefore, a primary necessity for running a modern business is “knowing your customers” and
matching your product or service to their needs. If you are supplying something that they need then
you will be pushing against an opening door when it comes to placing your services on the market.
Planning will also be a key feature of any business. However, the degree of detail and level of
sophistication of the plans will depend upon the size and complexity of the business. A person with a
small marine surveying company employing one or two people will not need the same level of detail
as a large multi-national surveying company. The larger companies will have many plans and will
need to disseminate the information through “policies” which will cover:
• human resource (HR) management;
• financial management;
• physical resource management; as well as
• business planning and management.
Therefore, during the next few chapters, marketing will be approached as part of starting a new
business, as well as developing a new business.
1.2 Starting a New Business

People will be tempted into starting a new business, or development of an existing business, for a
whole host of different reasons. During the past two decades, many small businesses were started
due to people being made redundant from their regular job. More recently however, the drive to
opening a new business tends to come more from a personal desire to do so. That said, the Covid
pandemic has also led to an increase in small “home based “businesses being developed in the new
business landscape.
Others might like to think that they can do the job better than the people they know that are running
a similar company or, it may be that they have identified a gap in the market that is not currently
being served.
There are also many details to think about when planning to start a new business.
It is a big step, possibly one where a person has very few options and possibly where there is no time
to think about planning a strategy. However, the temptation to delve into running a company
without a strategy in place should not be encouraged.
With marine surveying, it will most likely be that a new business is being started by one or two
people who are already working in the maritime industry and may also have some experience of
conducting ship surveys.
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Therefore, given the introduction just covered, marketing your new business will be about placing
your business in the right position so that you are supplying exactly what customer’s need.
The key to identifying the needs of customers of a new business is to “know your market” (the
area/place where you are selling your goods or services). If you are monitoring all the regular places,
where people are actively working in the same sector as you, then you will be able to identify areas
where your skills/products can be matched to the gaps which exist in the market.
Careful thought must be given to how the time will be spent in moving the business forward. It may
be that important professional contacts are already known, and these people just need to be
informed about the new service. Breaking into a new area of business where there is no track record
is particularly difficult.
The existing suppliers will not want to give up their regular customers and the companies concerned
will be reluctant to trust an un-proven person/company that is new to them. Trust is very important
and despite having assurances about the ability to deliver and with penalty clauses being in place, it
will still be difficult for a company to move away from a supplier with a proven track record.
If you or others within your new company already have a good reputation for success, then this can
obviously be a bonus and play a significant part in securing a first contract.
Having identified a good idea and confirmed internally that you have the ability to deliver, the next
step is to get your company noticed in front of the competition. Cold calling is not always the best
method and is carefully regulated via the European and UK wide General Data Protection Regulations
(GDPR) which have to be obeyed and make this even more difficult. “Targeted” advertising might be
a successful tactic and meeting at business conferences and seminars is a good approach – make sure
you have a good supply of business cards with you when attending such events.
Another method could be to send out newsletters or “white papers”. These are advertising under the
guise of giving information. Newsletters are more about a service and white papers tend to be more
about the technicalities or science behind a product.
Both can be a very useful way of receiving and giving information about your company and about the
services that you provide. They have the added advantage that they can be sent to specific people as
they are often in electronic format.
It may be that you find your company has a specific skill set and just happens to be in the right place
at the right time, in which case a new customer might be willing to pay a premium for the “special”
service that only you can supply.
It might also be that by carefully watching the industry you identify a gap that your company is able
to fill, where there are no other competitors, or where you have reacted more quickly than anyone
else.
Again, you might be able to charge a premium under these circumstances, especially if you must
invest in new resources to complete the task and can justify the higher price.
It is true that it is not a good idea to overcharge. Customers that feel “ripped off” or “unfairly
treated” will not be long term or loyal customers. It is reasonable to charge a premium for a “value
added” service, as there are usually substantial hidden costs that are required in either setting up or
maintaining that value service.
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However, it is generally considered to be best policy to be open and upfront about the considerable
effort being made to meet the added requirements of the customer.
Despite the additional effort, customers need to have the idea that they are buying value for money.
Therefore, without inventing costs and work that is not true, make sure that your customers know
about all the extra effort (for not enough reward) you are going to do on their behalf.
If as the owner you think that the regular service offered by your company will impress a new
customer, then you might want to offer an introductory discount which might even be at or below
cost price. This is known as a “loss leader” because the company make a loss initially in the hope of a
larger contract leading to bigger profits in the future.
Volume discounts also must be handled carefully. If you are able to reduce your “unit cost” due to
the order high volume, then a discount can be passed on to the client. Judging what is a “high
volume” is the all-important question which must be answered.
What may be high cost to a customer may not be high cost in the overall scheme of your business.
This will be an important decision to make and owners of new businesses must give some thought to
this before the question arises. If thought has been given to this aspect, then a quick and confident
answer can be supplied when the customer asks.
Another fundamental question to be considered by anyone starting a new business is whether the
company should be a “limited” company or not.
In the UK, it is tempting for individuals to set-up as “sole traders”. This is where individuals set up
their own business instead of being employed by an organisation but without registering as a limited
company.
It is often preferable to open a business as a Limited Company as this provides a level of protection
to the individual opening the company.
Other reasons are that the “director(s)” of a company has “employed” status which is important in
the modern age when it comes to simple things such as car or house insurance, applying for loans,
including a mortgage or credit cards (Although it is wise to confirm the banks position on this prior to
proceeding with an application). The “self-employed” or “sole trader” status has considerable
negativity attached to it due to the uncertainty of continued employment. The difficulty stretches
from gaining loans to taking out insurance.
It will always be better if a new business is started with some of the owner’s capital. Obviously, the
size of the undertaking will determine the size of the capital required. It will almost certainly be that
there are some costs to the business before income starts to flow.
It may be that if one is starting a small marine surveying business, for example, the owner will
already have a computer, a printer and office stationery and equipment. However, it may be the case
that these will need to be purchased and there will probably be travel cost to cover before
completing a first survey and report.
There will then be a delay before an invoice is paid covering all the “up-front” costs for the job and
making a contribution to any overheads.
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This area of accounting relating to the problem of having the cash to pay bills is called “cash flow” or
“liquidity”. This subject will be covered later in the section about finance.
However, it is important to know that if the time lag between completing work and getting paid is
too long, then cash in the bank that will be used to pay the suppliers’ bills will become less and less
until at some stage it will be difficult to pay the creditors.
The suppliers, banks and credit card companies will withdraw their service and the company will
cease to operate if payments are missed or consistently late. This may not be due to unprofitability
but simply because there have not been sufficient funds collected in time to pay the bills.
This demonstrates that the early production of sales invoices is very important. This action reduces
the gap between completing the task (survey) and being paid for the work completed.
Once a working capital has been built into the business, either through a borrowed sum or initial
owner’s equity or, by drawing out a bare minimum in the form of wages, then more can be achieved
in terms of “pump priming” the business development (see the next few paragraphs).
1.3 Developing an Existing Business

When developing an existing business there are similarities with starting a business. The most
important is to be “customer focused”. A marine surveyor running his or her own business or
managing a surveying business for an owner, is trying to have customers choose to purchase his/her
company’s service over a competitor. Then the fundamental question to answer is, what is our
unique selling point (USP)?
And
What do our customers want?
There should not be any second guessing here. History is littered with failed businesses who thought
they knew what their customers wanted better than their customers did.
Therefore, the best approach to this is to ask the customers themselves what it is that they want.
This does not have to be by formal research, although that does have its place, but it is best to visit
and talk to potential customers to be able to get to know their situation and needs fully.
Usually people like to feel special, pampered, appreciated, or just recognised as being important.
Customers are people and as such they have feelings. Therefore, it is not good for business to upset
customers which is why it is important for everyone in the organisation to be focused on the needs
of customers.
The customer’s needs will include their thoughts and feelings. Therefore, simple things such as being
polite and courteous are always important. In recent times, it has become quite popular to have your
monthly shopping delivered to your door. The delivery drivers are impressive and perhaps not how
you would expect. Nothing seems to be too much trouble, they are helpful, quick, and efficient, have
good product knowledge and if something is wrong, then they will do all in their power to put it right.
This approach is important as a customer might not be happy for a reason that you may not consider
to be so important or even, as a business manager, know about. Therefore, every member of staff
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that interacts with customers has the potential to drive that customer away and they should be
taught this as part of a staff development/induction programme.
For example, most of the cruise line companies ensure that all of their officers and crew know that
passengers require a first-class service irrespective of who they are, or which cabin they have
occupied.
The cruise industry thrives on “repeat business” and if passengers are not made to feel “special” then
they will not return. A most important lesson to learn is that unhappy customers may not tell you
that they are unhappy, but they will tell their friends and colleagues without hesitation. They may
even post their opinion on social media sites. The first that you know of this dissatisfaction is when
your business starts to suffer, and the competitors are taking what was your share of the market.
It is important that the company makes the needs of customers a priority. However, it is no good
promising the customer a high value service at a low price if the company cannot deliver on time.
This is where a business owner/manager is most important.
How many times have we heard stories of staff struggling to complete their task due to the
company’s ability being over sold?
It is very important that the ship managers know exactly the resources available and the capability of
the staff to deliver the correct service.
However, in every case, customers expect that the product or service being sold to them is:
• at the right price; and
• of the right quality; and
• delivered on time.
The other benefit of satisfied customers is happier staff as they are then working in an environment
where they have the satisfaction of doing a good job and are not continually having to deal with
customer complaints.
The company is also better off as it does not have to spend a considerable amount of time on finding
new customers to replace the ones that have left. More time can be spent on the important task of
continually evolving to meet the changing needs of customers.
It is important for all staff to know the commercial advantages that the company is seeking over its
rivals. All the staff can then contribute and take decisions that are beneficial to the commercial aims
of the company.
These could be for the company to aim at offering a wide service that covers all types of survey
rather than just hull and machinery for example. If the employed surveyors know the capability of
the company then they can offer additional services if the question arises while they are completing
their function.
It will be the responsibility of top management to ensure that the team of marine surveyors are just
as aware of their important commercial contribution as are the office-based staff.
This should start during the initial induction or company training. If the candidates are proud to be
part of the company, then they will also be pleased to learn about the commercial reasons for the
company being in business.
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Ship’s staff in an oil company for example, should be aware of the need to present a clean and
efficient ship.
Therefore, the lesson is that if you supply what your customers want then you have a chance to keep
their business. If you give them added value, then you are more likely to keep their business and
have the possibility of charging a premium fee for your service at the same time.
Successful surveyors or surveying companies will ensure that their customers are happy with the
timely nature of the service, the thoroughness of the inspection and the quality of the report and
subsequent action such as the recommendation of repairs etc. The best way to establish a
customer’s needs is to talk to them, but how do you do this without becoming a pest and resulting in
pushing them away?
Professional institutes such as the Institute of Marine Engineering, Science and Technology
(IMarEST), The Nautical Institute (NI) and the Royal Institution of Naval Architects (RINA) have a
significant role to play. Technical meetings, social events and other functions all serve to bring
suppliers and customers together where they could have in-depth discussions about progressing
their relative businesses. This is, however, another area of business which has fallen foul of the Covid
pandemic and gatherings have become “video” based through platforms such as Microsoft Teams
and Zoom.
However, email and other forms of electronic communication such as webinars, had already, pre
Covid, caused a reduction in the need for frequent face to face meetings. This had led to a rise in the
number of unsolicited emails and “SPAM” whilst also seeing the end of many worthwhile (and
enjoyable) professional / social events.
Commercially organised technical events, conferences and seminars have somewhat replaced the
traditional role of the professional institutes. These can be ideal places to meet your customers
without appearing to pester them.
Attending events such as those shown in figure 4, with a specialist maritime agenda, will produce rich
networking opportunities. Figure 4 shows a selection of some of the events being run by the Royal
Institution of Naval Architects in 2023.
Figure 4: Example of a networking opportunity. (RINA, 2022)

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The modern “buzz” word to success is “networking” but it cannot be over emphasised how
important this activity is. You may work for a very large shipping line but talking to people at
seminars and events will often extract the phrase:
“I didn’t know that your company provided that”.
The other most important aspect of networking is that you don’t know how and when your
conversation will be repeated which could then lead to further business opportunities (see above for
the variety of events just from one company).
One of the most important activities to be undertaken by both you and your staff is returning a call,
email or other contact from a customer. You delay at your peril, especially currently when globally
businesses are showing an upturn.
It is logical to say that if you can keep existing customers happy then you will not have to spend so
much time on finding new customers to replace customers that have moved away.
Therefore, the effort spent on finding new customers will be to grow the business and not just to
stand still. It is interesting to know that where the studies have been completed it was found that
keeping existing customers is profitable.
You will probably spend five to seven times longer in researching, finding, attracting, and building a
relationship with a new customer than you will in retaining an existing customer.
Further studies show that losing customers can be due to something as simple as having been
impolite. All the staff that interact directly with customers need to know this fact and that it could be
up to them to ensure that customers always have a positive experience when interacting with the
company at all levels.
It will probably transpire that if a customer leaves, you will find it very difficult to find out the reason
why.
Some teaching states that as much as 80% of management time and budgets should be spent on
keeping existing customers. Have a look at the following link for some compelling reasons to put your
concentration on “keeping and growing existing customers”:
https://leadershipcloseup.com/
The effort in keeping existing customers is considerable. However, some of the work will be because
of normal market research, keeping up to date and as a result of your own company’s operation. It
may even be worth considering providing an information service or “newsletter” to your customers.
This could have a two-fold benefit:
• the first being that it is a “value added” service; and
• the second benefit is that it keeps a regular link with existing customers.
It is beneficial to look after your customers at every opportunity. Sponsoring (i.e., paying for) a table
at an industry function and inviting several customers will be quite a cost-effective way to make an
impression in a relaxed atmosphere.
Ensuring that you keep in touch does not have to be costly. Christmas cards for example, may be
appreciated by your customers. Other options could include drinks coasters, desk calendars or
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mouse mats as useful ways of keeping your name in front of customers. These will keep your name
on a customer’s desk every day.
Of course, it is most beneficial to employ a range of strategies which will be focused and improved as
your experience in the job grows and you start to learn which of the methods works best for your
company and their customers.
It will help enormously if your company has a strong brand, and you can work on building a positive
image where people recognise the name and the logo and associate that with quality.
1.4 Bringing Your New or Existing Business to Market

The importance of “personal recommendation” and a “good reputation” cannot be emphasised too
much. This is probably the best form of promoting your business and must be given a very high
priority in the planning and operation of a business.
Having said that, these things can only go ahead if people have engaged with the company in the first
place. Therefore, spreading the word to your identified target of potential customers means that
there will inevitably be a cost involved.
Advertising in trade journals is not cheap and it may be that to start with you might be able to pick
up work from people that you already know or that you have dealt with in the past. When working
for a large organisation I have always worked on the philosophy that if I can help, or give support,
which may not have a direct benefit at the time, then I will.
People respond to that approach and trust is built which then could pay dividends in the future.
There should be a similar approach to staff when they want to move on. I would always respect their
decision and wish them well for the future. It is no one’s interest to part acrimoniously as
circumstances may well change in the future and parting on good terms might prove fruitful to you in
the future.
People run businesses and building relationships helps to progress development. Attending trade
events and leaving business cards is a very good way to discuss your business with potential
customers. When more funds become available it may be worthwhile to have a stand of your own at
some choice events.
One of the most important things to have these days is a website. It is quite often the first place that
people look when they require a product, a service or just information.
Increasingly it is also helpful, attracts possible customers and gets more people looking at your site, if
you supply technical information. This could be in the form of projects that you have been involved in
or just an overview of the technicalities of surveying.
Another more recent trend that is vital is participation in social media. It is not necessary to link with
all your friends, but platforms such as “LinkedIn” and “Facebook” do build up business contacts and
information about your business can be transmitted via this medium.
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Directed Learning
• The site at the following link will help with identifying some of the decisions to be made when
starting a new company - smallbusiness.co.uk
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2. Producing a Business Plan
2.1 Introduction
Irrespective of the size of a business some planning is essential. One person, for example, starting a
small surveying company might find it necessary to take out a business loan to purchase equipment
such as Personal Protective Equipment (PPE), atmosphere testing (multigas) meters or Non-
Destructive Testing (NDT) equipment and, depending upon the quality of the equipment, the loan
could be a sizeable sum.
Taking out even a relatively small business loan these days will depend upon the quality of a business
plan. To some people focused on starting and developing a small business, taking time away from
focusing on the core activities may seem like a waste of time. This could be especially true if plans for
external bodies, such as banks, are not required.
Even if you can keep the plans in your head and do not feel the need to write them down it is still
worth taking the time to plan. The planning might be as simple as prioritising activity, time
management or resource planning.
For small businesses it is vital that time is planned for producing high quality, accurate and timely
sales invoices. For the marine surveyor starting or developing their own business, thinking about, and
carefully constructing these vital documents, is probably the next most important job after producing
a quality survey report.
It is therefore also important to gather the required information for the invoice as the job
progresses. If an hourly rate has been negotiated, then it will be important to record everything that
has been done during that time. If different parts of the vessel have been surveyed, then again it
might be necessary to keep a record about what work was completed and its location.
The sales invoice must contain all the relevant information required by the customer. If purchase
orders are used by the customer, then the number must appear on the invoice. If a special
instruction has been followed, then the correct information about this must appear on the invoice.
The invoice must also contain the following information:

• Date of the invoice.
• Date on which the services were provided.
• Date when payment is due.
• Address and telephone and/or email of the company sending out the invoice.
• Address of the company receiving the invoice.
• Total amount payable.
• Details about the work completed.
• Any special requirements required by the customer (such as a purchase order number).
• Payment method and details – BACS transfer information, for example.
• If the company sending out the invoice is a limited company, then the company number
must be included on the invoice.
• If Value Added Tax (VAT) is involved, then the company VAT number should also be included
in the invoice.
This information is the minimum required but company branding, contact names and telephone
numbers might also be included on the invoice. Don’t forget, quite a lot of the information can be set
17
out on a “standardised” document and, therefore, only the customer and job details need to be
changed.
The reason for all this attention to detail is that the company completing the work needs to ensure
that there is no reason at all for the invoice to be questioned, held up or, rejected by the customer.
More and more finance departments work off a “monthly” payment run. This means that all the
work needed to select payment then to have the cheques printed and signed, all takes place at the
same time each month.
If an invoice is delayed it might miss a monthly payment run and there will then be a four week wait
until the next monthly payment run. The financial procedures already contain enough complication
for the staff to introduce a delay in payment without the added complication of there being an error
on the invoice.
Therefore, some planning is essential when running any business. Other than planning your time and
prioritising activities in your head the next step is to think about the formal records that will be
needed for taxation purposes. The level of detail will again depend upon the type of company that is
being operated.
A business bank account is not 100% necessary for every business, but it does make sense and all
good business advice is to keep any business finances separate from personal finance. There could be
tax implications if confusion or doubt exists over legitimate cost to the company. In the UK, Her
Majesties Revenue & Customs (HMRC) might subject the company or person to an in-depth audit of
their accounts if there is any suspicion of malpractice or miss-accounting.
The best advice is that as a minimum for any business there should be:
• A name for the business/company.
• A bank account in the company name.
• Insurance covering work, travel, third party damages/injury and professional indemnity.
• Sales invoices produced correctly and on time.
• All receipts for expenditure related to the business.
• Careful recording of all income and expenditure.
• Contact with and timely production of all tax requirements from HMRC.
• Equipment to produce documents.
• Storage space for company administration.
• Equipment to contact customers and suppliers (i.e., telephones and computers etc).
Increasingly it makes sense to employ the services of an accountant. If a limited company is being
considered, then this is essential. The accounts must be produced in a specific way to comply with
legal requirements.
This requirement can be completed by people that are not trained accountants, especially with
computer solutions such as “Sage Business Accounting”, “Quickbooks” or “Xero” (amongst many
others) which are available on a subscription basis and are increasingly cloud based (i.e., accessible
via the internet). However, it will often not be the simplest or necessarily the most cost-effective way
to proceed by doing this yourself.
If a limited company has been set-up then it is best to employ the services of an accountant to give
advice and prepare the final accounts ready for recording with “Companies House” in the UK, or
other government organisations in other countries. If all the sales invoices and the expenditure
receipts have been entered into the accounting software (which may be one of those listed above),
18
then the time required by the accountant will be minimal but very worthwhile. You could also benefit
from the accountant setting up the accounting system for you (at a cost), and possibly share in a
“volume user discount” as your accountant may be using the same software across all clients.
2.2 Business Planning in Larger Companies

2.2.1 Determining the Best Strategy
The use of the term “strategy” may conjure up visions of generals looking at the large-scale model of
a battlefield, or players agonising over a chessboard. This is in its way useful in conceptualising a
meaning of the word strategy.
Formulating a strategy is a long-term planning process. It is about leaving the short-term battles to
others, while the strategists are concentrating on winning the war.
Final decisions about the direction of an organisation rest with the most senior staff members as any
mistakes in this area can be the costliest. The strategy sets everyone off in the same direction and if
that is moving in the wrong direction then it will take considerable time and effort on behalf of
everyone to turn the strategy around.
Everyone will also know that the organisation was taken in the wrong direction and, therefore, some
confidence in the senior management will be lost both by the staff and the shareholders.
Take the concept of the “liner” trade. A company running this service will be aiming to place a ship or
ships, on a regular run to be in a specific port at a specific time. This means that the customers can
organise their products or raw materials to be transported on time.
When “containerisation” and ro-ro vessels appeared, and their numbers grew during the end of the
1960s through the 1970s and 1980s, the efficiency of moving goods vastly improved.
During the end of the 1960s, for example, Atlantic Container Line (ACL) started a five-week round
trip, with five ro-ro/container ships – from Europe/UK to North America/Canada. Liverpool was
designated as the port of call on a Wednesday.
This arrangement placed an ACL ro-ro container ship on the berth in Liverpool every Wednesday.
This meant that if shippers in the UK could get their goods, in a container, to Liverpool on a
Wednesday the goods would sail for Europe or North America.
Please visit the ACL Cargo website, to see how well that service is doing today. Note how it has
changed very little in the last 45 years. This strategy was designed well and has stood the test of
time.
It is not only the route and the customers; everything has come together to ensure that the
customers are pleased with the product. The ships, for example, are flexible in that they can carry
cars, farm machinery, caravans – in fact any plant that will fit on a low loader trailer as well as any
containers including reefer and “hiCube”. The latest vessels are just the right size and have been in
service since 1984/1985 when they were built.
Some strategic decisions have not been so successful. In 1968, Port Line built two ships specifically to
carry frozen meat from Australia/New Zealand to the UK. Failure to visualise the impact of
containerisation and the UK’s entry to the European “Common Market” in 1973, meant that the
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ships ran out of business by 1976 and were laid up, sold and eventually scrapped after a short life,
whereas the ACT containerships built just afterwards were re-engined after 20 years and went on for
a further 10 years of service.
Marine surveying is a very important part of the wider maritime industry and as such it will have to
move with the changes that are required by the industry.
2.3 External Considerations

Cole (1996) argues that an understanding of the external environment in which an organisation
operates is a crucial part of strategic management this understanding must be accompanied by an
assessment of the organisation’s internal environment.
Cole (1994) goes on to suggest that a PEST analysis is required. This is the study of the external
environment under the headings of:
• Political.
• Economic.
• Social.
• Technological.
If we have a quick look at some of these areas related to the maritime environment we might like to
consider:
2.3.1 Business
The state of the industry:

• Stability:
Business managers often talk about having a stable and slow changing backdrop to
conducting the management of their company. Over recent years, the maritime industry has
had a fast-moving backdrop. Following the global banking crisis of 2008, manufacturing
reduced and subsequently the demand for raw materials also went down. Therefore,
international shipping suffered a downturn.
As the markets recovered, uncertainty hit the oil market, as well as the added technical
issues with emissions (including exhaust emissions as represented in figure 5) and MARPOL
compliance, including the management of ballast water, become apparent.
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Figure 5: Exhaust emissions are now heavily regulated by the MARPOL Convention.
• The Market:
If you are running a marine surveying company specialising in container ships or cruise ships,
you might be asking:
o What will be the problems if larger ships are built?
The largest container shipowners/operators in the world are currently planning or carrying
out a new build programme:
o How will survey techniques change with an increase in size and sophistication?
Managers of survey companies will be looking at current and projected demand, market
segments and potential niche markets.
• Competitors – Market Share:
Some companies will be looking to be market leaders, with a quality brand and will not be so
concerned about being the biggest. Others will fulfil a niche in the market, e.g., companies
that concentrate on narrow boats or superyachts.
• Suppliers:
The important question here is:
o Do my existing suppliers support my needs well enough for me to run my business
without any delay caused by them?
It is also vitally important that you also impress upon your team that they ask the same
question of any suppliers that interact with them. For example, any recommendation for
engineering repairs:
o Are they completed on time and are the spares used of the correct quality?
2.3.2 Political:
• Legislation
The marine industry has the UK legislator in the Maritime Coastguard Agency (MCA) which
looks to the International Maritime Organization (IMO) for regulations to follow. For
example, the Standards for Training and Certification of Watchkeepers 78 (as amended)
(STCW) Convention is now having the 2010 Manila amendments implemented and this must
be complied with as required.
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We have then “compliance” where marine consultants might advise ship managers to set up
expensive departments with the sole purpose of ensuring that their company vessels remain
compliant with current and impending legislation.
• Political Changes that will Affect the Existing Market:

For example, within the past 20 years, the Port of Salalah was a development that came
about as a result of a political assessment of the region.
The issue here was that Salalah is situated close to the Oman/Yemen boarder, and it was not
until the fighting between the two countries came to an end that the development of the
port could be considered.
Salalah, as shown in figure 6, became a “hub” port which meant that the large container
ships did not have to traverse the “Straits of Hormuz” and visit Abu Dhabi and Bahrain (see
picture below). This voyage can be undertaken by the smaller “feeder” vessels, making for an
overall efficient operation. In more recent times, DP World have invested in building a new
container terminal in the River Thames. Called the London Gateway, it represents significant
investment for both the company and the port.
Figure 6: Salalah as a hub port.
2.3.3 Economic
• Interest rates.
• Employment levels.
• Inflation.
• Exchange rates.
• Developing nation economies.
• Terms of trade.
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This area is very interesting and probably needs more research than the others as this area may not
come so naturally to the average person entering surveying management, especially if from a sea
going background. Employment has been of major concern for several years.
The modern concern around employment relates to the fact that on any one ship or certainly within
one company the qualifications of seafarers will be from more than one flag administration. This has
been highlighted many times as being a significant issue for the ship or crew manager.
The problem seems to be that the rules for compliance, with the qualification structure of one
administration, do not coincide with the requirements for another administration. This, together
with the growing problem of fraudulent certification, means that more time is being spent on finding
the answers to a complex problem. This could have significant impact on marine surveying
companies:
• firstly, due to the reduction in the ability of the crew to complete a quality job; and
• secondly in the recruitment of suitably experienced and qualified staff.
2.3.4 Social
• Skill levels.
• Population changes.
• Attitudes to work/leisure.
Again, this area is one that is constantly changing. The match of skills required to the skills available
or that are coming out of the training systems may not be the same. The increase in navigation
technology or highly-sophisticated computer systems that check passengers on and off the ship,
allow them to enter their cabin and buy goods in the shop, mean that a different knowledge and
understanding is required than there was in the past.
The advance in social media must be managed carefully with clear guidelines coming from the ship
manager. New entrants coming into seafaring can bring with them a different mind-set and the
“norm” that they have come to expect is not necessarily what is required at sea.
2.3.5 Technological
• Developments in IT.
• Industrial advancements (automation).
• New energy sources.
• Compliance.
Once these influences have been assessed and the likely impact understood then an organisation can
evaluate its own position against each of these headings.
Information gained from this exercise will go toward the SWOT analysis, which may well influence
future policies and plans:
• Strengths.
• Weakness.
• Opportunities.
• Threats.
The SWOT analysis is an acronym for the activity where an organisation identifies the strengths and
weaknesses within itself.
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This could be approached from different angles but should examine the following:
• Organisational structure.
• Organisational ethos.
• Decision making.
• Management chain.
• Management style.
• Management information.
• Profitability.
• Growth in assets.
• Cash flow.
• R&D.
• Product output.
• Market share.
• Personnel and physical resources.
During the past 25 years, international shipping has become much more efficient. The
containerisation of cargoes and the automation of ships, being the two most important reasons.
These efficiency gains have combined with the shipping companies’ choice from an international
labour market, to drastically reduce the need for crews from traditional seafaring nations, which in
turn has reduced personnel for maritime related businesses such as education and training.
The shipping industry has had to compete in increasingly difficult markets and the marine
superintendent will become increasingly involved in this process as the link between sea going and
shoreside experience increases in importance. This has a knock-on effect for the parts of the
industry, such as marine surveying, that have sea-going staff as a traditional source of recruitment
for their own personnel.
Tom Peters (1989) points out that organisations should not be striving to take market share from
competitors but should be researching and discovering new niche markets for existing
products/services. Smith (1994) states that Ansoff’s Matrix describes this strategy as less of a risk to
the organisation than competing with other organisations in their established market, especially as it
might also require a company to develop new products.
Providing the industry with the services or products that it needs when it needs them might put
considerable strain on a company’s limited resources. Therefore, a shipping company must review its
physical resources and if and necessary consider working with other industry partners to expand its
business and look for new opportunities.
Smith (1994) states that the Ansoff Matrix, shown in figure 7 serves as a useful tool in determining
the direction that an organisation may choose to expand.
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Figure 7: Ansoff Matrix
The matrix above suggests four potential strategies and the risks involved:
• The low risk strategy is for an organisation is to extend its market by finding new segments
for existing products.
• A medium risk strategy is to expand the current market by selling more of your service or
product to existing customers or by selling to your competitor’s customers.
• A second medium risk strategy is to market new or modified products or services to existing
customers.
• The high-risk option is to develop new products or services for a new market which Ansoff
calls diversification.
For more information, see the Ansoff Matrix website.
We have covered the concept of marketing and stated how it is much misunderstood and it was
Peter Drucker that is on record as saying that the aim of marketing is to make selling unnecessary
(Drucker 1990).
Cole (1995) described the essence of modern marketing developed by Phillip Kotler as, studying the
market, segmenting it, targeting the groups that you want to service, positioning yourself in the
market, and creating a service that meets the needs of your target group. This is unchanged today.
Kotler called this the Segmenting, Targeting, and Positioning (STP) method of marketing. Drucker
(1990) pointed out that marketing is about understanding why customers choose the products or
services with a company, rather than with a competitor.
Providing for this customer choice is, of course, the key point of marketing. Many companies have
found to their cost, that trying to sell products the market does not want is the road to ruin.
25
Hannagan (1992) suggested that, before reaching the point of making a decision about its market
direction, an organisation would need to consider the product/service, price, place in the market and
the promotion of its products – the four Ps:
• Product.
• Price.
• Place.
• Promotion.
This was for a physical product, whilst for the service (such as surveying), three addition Ps were
added, making up the 7Ps of service marketing:
• Product (service).
• Price.
• Place.
• Promotion.
• People.
• Process.
• Physical Evidence.
It will also have to study its markets, customers, and competitors as well as the overall economic,
political, cultural, and technical environment.
These factors, external to the organisation, are sometimes referred to as the STEP factors:
• Social Factors.
• Technical factors.
• Economic factors.
• Political factors.
Equally as important as knowing the STEP environment, so is carrying out a SWOT analysis. The
SWOT analysis helps the organisation to remain focused on its objectives by, as Hannagan (1992)
stated, building on its strengths, redressing, or allowing for its weaknesses, taking full advantage of
the opportunities, and meeting the threats.
An organisation must at all costs protect its core business. It must also avoid the temptation to
expand too quickly and thereby overextending itself and it must strive to become very good at the
area or areas that it chooses to service.
2.4 Production of Business Plans

Where there are more than just a few people in a company it will be important that senior staff
ensure that everyone has as much ownership of the business plan as possible. One of the best ways
to accomplish this is to give the staff as much “ownership” of the plan as possible.
Consultation with the staff is essential. However, this will not work very well if they do not recognise
the final document. The problem is how do you include the views of everyone in documents that
contain information that is out of some of the staff’s experience.
The answer must be in the way that you ask for contributions to the plan. For example, staff at a
“front desk” might have a valuable contribution to make when it comes to the customer experience
for people visiting a main office but if they had other contributions which were not valuable then it is
important to be transparent about the reasons for not taking up their suggestions.
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Responsibility for writing the plan will rest with the senior management team. However, they will
have to ensure that the staff are willing and able to execute the plan when it is completed. It can be
that staff are forcefully told that they must comply but that is not the way to obtain the best
performance from them. Your “people” skills will be well tested in these situations.
2.5 Business Plan Structure

The question to answer is:
• What is to be included in our business plan?
The answer is:

• What is most useful to you and your business?
It is important to note that a business plan should be a useful, working document and not something
that is looked at every now and again and placed back on the shelf or in the filing cabinet.
Bearing in mind that you might want to use your business plan to inform other outside persons or
organisations about your intentions it is better to write into the document things that you might take
for granted.
One way of broadcasting the message about the broad aims of the company is with a clear idea
about the “mission” or the view about where the company is heading. If the idea is for the company
to be “the first choice for owners requiring the service of marine surveyors in the super yacht
sector”, then that is what the mission statement should say.
Directed Learning
1. The following link will guide student to more information about starting a small business:
https://smallbusiness.co.uk
2. Discuss your ideas about the most pressing business problems facing the modern marine
surveyor.
Here you will find more information plus some practical tools that could be used.
3. Please have a look at some examples of mission statements at: How to write a mission
statement and discuss the content of these on the forum.
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3. Obtaining Financial Support
3.1 Introduction
Many companies start their business by borrowing money and it may be that only a small amount is
required. However, it goes without saying that very rarely will money become available that does not
have to be paid back.
Depending upon the source of the borrowing will determine the “extra” that requires to be paid for
the privilege of having someone else’s money to work with. The extra will be determined by the
interest rate which is usually set at the time of taking out the loan and usually runs for the full term
or for an intermediate term agreed up front.
One method to access short-term capital funds is through a credit card. In fact, you could have up to
your limit for 0% if the balance is then paid off at the end of the month.
It will always be so much easier to have access to funding if the borrower has a high credit rating. It is
also ironic but if the borrower has not owned a credit card, then his or her rating will be lower than
someone who has owned one.
Being a homeowner or having borrowed money (and paid it back) before will also improve your
chances of obtaining a loan. The same goes for “employment” status which comes through running a
limited company rather than being a “sole-trader”.
3.2 Bank Loan

It is slightly ironic that we have some of the lowest interest rates since record began and yet it can be
very difficult to secure a loan from the bank. Pressure from governments to ensure that both they
and the general public will not be required to again “save” banks from bankruptcy in a future
downturn has meant that they have had to increase their capital reserves and be more cautious in
lending money.
This pressure to ensure that every loan was virtually guaranteed to be paid back without any
defaulters or bad debts means that the banks are now ultra-cautious about lending funds.
For anything but the smallest of loans, the borrower has more chance if he or she already has a track
record of successful business with the bank that is lending the money. The very minimum
requirement will be a detailed business plan including cash flow analysis and some evidence that the
plan was realistic.
The bank will want to complete its own “due diligence” investigations and may well also require
some of the borrower’s existing assets as assurance that the bank would get its money back if the
company defaulted on repayments.
Sometimes, if the loan is big enough and the borrower a significant company, the bank might require
that a member of their staff become an invited member of the borrowing company’s senior
management board. There may also be a requirement from the bank to be consulted on how the
funds are spent.
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3.3 Crowd Funding
Because of the changing financial climate, other ways for companies to borrow money have started
to emerge.
Crowd funding is the act of raising funds from many people usually via posting your idea on the
internet, and companies and organisations have sprung up to manage this. Obviously, the idea would
need many people to come forward and, therefore, a specialist organisation such as a company of
marine surveyors might find this a difficult alternative, expect you will not know until you’ve tried it
and success could depend on the returns you offer.
There are other variations on this theme such as just cash flow (Just Cash Flow website). They have
different types of loans to suit businesses, some are just like the old-fashioned bank loan.
3.4 Unconventional Sources

The UK government have also made other funding opportunities available such as the Regional
Growth Funds (RGF). Loans are applied for in a similar way to the application for a bank loan
described above. The projects are more aligned to simple business propositions such as starting a
new “marine surveying” business.
Usually with these loans the business is required to either match or exceed the loan with funds of its
own. Sometimes, the local council/authority will make the loan a “grant”, so the borrower does not
have to pay the money back. More usually the loan will be an “interest free” loan.
Also, with these loans the borrower will have to demonstrate a commitment to employing local staff
or bringing a tangible benefit to the local area by attracting people or profits to the area.
If a business has a European dimension or partner, they might qualify for European funding to assist
their business. Traditionally, companies and organisations in the EU countries on the continent have
been more successful than UK companies at tapping into this source of funding.
Directed Learning
• For more information about LIBOR, please read further information at Global rates website.
• For more information about this funding opportunity, please read further information at
Crowdfunding website.
• For more information about funding opportunities for businesses from the RGF, please read
further information at UK Regional Growth Fund.
• For more information about European funding opportunities for businesses, please read
further information at EU Funding opportunities.
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4. Survey Report Writing
4.1 Introduction
The ultimate objective for a marine surveyor is to convey the findings of a survey to his or her
client/principal. Marine surveyors are also judged by the standard of their reports and, therefore, it is
important that these reports are constructed correctly and in a professional manner.
This chapter outlines some of the problems that the marine surveyor might encounter for example,
the initial information/instruction might have come from overseas, from a non-specialist. The survey
might also have been completed for a client with a considerable amount of money at stake, and the
final report might contain messages that the customer does not want to hear.
The expertise of collecting information and formulating reports is an important lesson to be learned.
This chapter includes information about the care that should be taken to collect and gather
information and about how you should be methodical in your actions.
It is interesting that the total number of hours available during a given week is 168 and yet we never
seem to have enough time to complete all the tasks that are required. A later chapter has a brief look
at time management and gives some practical ideas for effective time management. This includes
some of the worst “time bandits”.
Practical preparation is required before starting any survey as, once on board you will probably not
be able to just return home or visit a shop to pick up that vital piece of equipment that you have
forgotten. When you are ready to compile the report, you might need technical background
information and, therefore, the module has some information about collecting technical and
specialist information.
Report structure, style, grammar, spelling, and presentation are all very important and the use of
pictures can greatly enhance reports. These are all supplementary to the actual writing of the reports
and contracts. Typical report sections from abstract to references are described as part of the
module.
Reports these days are usually produced using computers. Some of this equipment might be helpful,
while other items could be a costly mistake. For example, tablet computers, such as the iPad, are
very useful due to their small size and ability to connect via wireless and (for some) data networks.
One of the most important lessons is still to ensure that your work is properly saved and that you
make regular back-up copies of your work. These should be on removable media such as USB
memory sticks or cloud-based servers.
4.2 The Focus of the Report

The principal aim of the marine surveyor is to convey the findings of a survey to his or her principal
and the report is probably the most important part of that function. The activities involved require
the surveyor to gather relevant information and to focus this as an effective, accurate and concise
report.
It must also be remembered that the surveyor’s role is not over until the information has been
successfully passed to their principal.
30
The emphasis here is on “successfully” because reports can be written in such a way that the
information and facts are so difficult to extract that the report does not fulfil its purpose.
The report is also an extension of you, the writer, and it must be remembered that once in the public
domain your report might be read by people other than the person it was first intended for. It is not
unknown that a marine surveyor is called upon to defend his work in a court of law long after it was
written.
The way that you present the facts and the language you use can change the message that is carried
within a report. This was graphically illustrated some years ago when the British government was
accused of “sexing up” a report to convey its views on the threat to national security. The meaning of
the report was completely changed because of the stronger language that was used.
The change in emphasis will be a subtle process and will involve changing words from say “may be
able to” to “will be able to”. This changes the whole emphasis of the statement. If the surveyor said
in his or her report that a piece of equipment “may fail in the future”, this would convey a different
message from “will fail in the future”. It could be argued that both statements are drawn from the
same basic set of facts, but one carries a stronger message about the likely risk of equipment failure.
It is, therefore, most important that you understand the focus of the report and the rationale that
you have been given by your customer. The two-way flow of information and communication starts
with the information that you receive about the task that you have been asked to accomplish. Any
verbal agreement should always be reinforced in writing to avoid any ambiguity.
You must remember that the initial information might have come from overseas, from a non-
specialist and from someone with a lot of money at stake. Therefore, the information that you
receive might not be as complete or as accurate as you might wish as the stakeholders pursue their
own agenda.
You do not have to look far among shipping professionals to see an illustration of differing points of
view. Take the ship in a discharge port that has to complete the cargo work and carry out a survey on
the cargo-handling equipment.
The chief officer is focused on the cargo and the second engineer on the survey work that has to be
done. If the two do not communicate effectively, then the master and chief engineer may have a
situation where the cargo-handling equipment is in pieces ready for the surveyor and the cargo is still
in the ship.
This situation might be exacerbated if the people are from different nationalities and/or cultures.
Different time zones might also have to be considered and the ever-growing problem of physical and
mental fatigue should be borne in mind by the surveyor as he or she attends a modern ship with the
minimum number of officers and crew, according to the safe manning document, being employed
on-board.
It may be that the initial information received is not extensive and you will have to carry out some
research before starting or accepting the contract for the work. It is, however, very important that
you are happy with the terms of reference before spending too much time and effort on what might
turn out to be a lost cause.
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The International Labour Organization- Maritime Labour Convention (ILO-MLC) seems to be having a
very positive effect on the working hours of seafarers although this continues to be a problem for
some vessels on permanent coastal charters due to the need for officers to be on watch during
arrival, port stay and departure periods.
Directed Learning
• Consider that you have arrived on board a vessel to conduct a survey. The Master is asleep,
and the crew are not expecting your arrival. The Chief Officer explains that he has exceeded
his hours of work as has the Master. The Master has left orders that she is not to be disturbed
other than in an emergency.
• How would you deal with this situation? Discuss on the forum.
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5. Problems Peculiar to the Marine Industry
The first and most important issue is the fact that the marine industry is an international business.
This is an obvious statement, but over the past 20 to 25 years the situation has become much more
complex.
In the past, shipowners employed their own staff, who were predominantly of the same nationality,
operating ships registered in one country and trading back to that country or cross-trading from one
country to another. Therefore, you had a national company operating internationally.
Now however, things are very different. For example, much discussion and debate are conducted
these days about businesses employing staff from countries where the labour costs are lower and
using them to supply services to countries with higher labour costs. The call centre and financial
services businesses are at the forefront of public understanding about this practice.
However, the marine industry is now very experienced in this practice, and in an international
business you view your human resources on an international basis. This means taking the most
appropriate staff from the most cost-effective area in the world.
During times of hardship the shipowner might look to cut costs by reducing the number or changing
the size or age of the tonnage they operate. By contracting out the company’s staffing responsibility
to a manning agent, the shipowner is also relieved of the burden of any redundancy costs for surplus
crews during these changing times.
The major advantages are that:

• good personnel can gain secure positions;
• while at the same time the agency satisfies its customer’s needs;
• if one company fails it should not then affect the best seafarers; and
• structured training systems can be set up.
One disadvantage to the industry is the lack of incentive for the shipowner to pay the manning
agency for training. National recruitment schemes also become redundant and the agencies and/or
shipping companies have to offer their own career guidance.
Another problem arises where a manning agent has supplied 80% or 90% of the crew for a particular
ship and then cannot supply the final 10%. Who would supply the final 10% and who would keep a
record of the correct number of qualifications required to satisfy the safe manning requirements of
the ship, which would be inspected by port state control?
Some agencies have set up their own training centres such as the one shown in figure 8 and figure 9,
to ensure that all their crew, or managed crew, will have the opportunity to gain the basic
qualifications required by the IMO’s 1995 and 2010 amendments to the 1978 Convention on
Standards of Training, Certification and Watchkeeping (STCW).
See the following the IMO website for further reading on this subject.
Having this service means that they can guarantee the training at short notice and be confident
about the quality of that training (note that the 2010 amendments are also known as the Manila
Amendments).
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The Maritime Skills Academy just outside Dover in the UK is one such establishment (see figures 8
showing the facility being built).
Figure 8: A training centre being assembled.
Figure 9: A fire training centre built by Viking Recruitment in Dover.
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One of the major problems with this is the expense of the physical and human resources needed to
gain accreditation to offer the approved training under the latest STCW Regulations. The system is
that the national authority, which in the UK is the Maritime and Coastguard Agency (MCA), police the
design and delivery of the education and training that has been determined internationally by the
IMO. The hope is, therefore, that on a global basis the education and training standard will remain
the same.
To set up its own centre for basic training, for example, a manning agent would have to find
resources to offer sea survival training, as well as an area to provide firefighting training, such as
shown in figure 9.
The modern training of officers to full Certificate of Competency (COC Officer of the Watch) is much
more complicated. The shore-based phase will be straightforward, but the sea phase of a seafarer’s
education will be more difficult to track due to the difficulty with communication.
This will normally be left to specialist organisations and maritime colleges that are familiar with the
requirements of STCW and the need to offer “approved” education and training. Surveyors should be
aware that STCW is the minimum standard required and often on a modern vessel this is not enough,
and officers should have gained experience and professional development over and above this
minimum standard.
5.1 Preparation and Information Required

Planning for collecting your information will depend on the type of research for the survey you are
required to carry out. It will be important to think about your strategy.
For example, if damage has occurred due to a mistake by an operator, crew member or officer, then
the interviews that you will need to carry out will be difficult.
Your review of the documentation will have to be thorough to ensure that nothing has been
removed or, indeed, additional information included that was not part of the original set-up.
When analysing documentary evidence, you must be confident about the validity of the source. It is
always desirable to reference your work so that readers can check for themselves where the
information has come from.
The other big problems that arise with taking information from documentary sources are sampling
and interpretation of the original text. Some documents may not be original source documents and
might well be quoting from other work. If this is the case, then the author might have already
provided an interpretation on the original information.
Taking information and quoting it “out of context” must also be guarded against. This is a great
technique for people who have their own agenda and are using information from any source to
support their cause.
The maritime industry is highly complex and yet some parts have been made straightforward by the
work of the people within the industry. Take initial education and training for example. Most
countries have a well-established system for entry into their country’s merchant marine. This will
now mostly be centred on the international requirements of the IMO.
Whatever the system, the entry and progress to junior officer is relatively straightforward.
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Career prospects, progression, education, and training after the rise through the ranks to master or
chief engineer officer become much more complicated and subsequently the collection of
information about shipping, outside of the immediate needs of the ship, also becomes much more
complicated.
The internet is now one of the most important points of call for information. For example, at
American Bureau of Shipping (ABS) website and all its standards are downloadable free of charge.
You can also subscribe to many different maritime industry news services, some offering free
information, others only the headlines before a subscription is needed to read the full content.
Trade journals, many of which are now online, are an excellent source of information, but:
• Which ones are the best for the market that you are in?
This will have to be an individual choice based on your own circumstances. But for surveyors it is
suggested that shipbuilding and repair publications are a good source.
Professional institutes are worth consideration. The most important to the marine surveyor are the:
• Institute of Marine Engineering, Science and Technology (IMarEST);
• Nautical Institute (NI);
• Royal Institution of Naval Architects (RINA);
• The Society of Consulting Marine Engineers and Ship Surveyors (SCMS); and
• The International Institute of Marine Surveyors (IIMS).
They all produce technical papers, information journals and books to cover a wide range of subjects.
You don’t always have to be a member to get the information although the fee structure would vary
according to membership.
From the IMarEST home page, you have a wealth of information at your fingertips – you can call up a
technical links page which gives quick access to a wide range of technical and standards-based third-
party websites.
As discussed already, networking is certainly one of the most effective ways of building up your
contacts and ensuring that you are known throughout the sector of the industry in which you
operate.
There are very good programmes of events and conferences organised for marine professionals at
different times and places throughout the world. The use of Twitter, Facebook, LinkedIn or any other
of the “social” interactive systems is worth exploring.
The classification societies are a very valuable source of information and the IMO and the
International Association of Classification Societies (IACS) are two more vital areas of information.
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Directed Learning
• For your own future use, make a list of your current professional contact who may be useful to
contact when you begin to operate as a marine surveyor.
• If you are already operating as a marine surveyor, review when you last made contact with
your contacts and consider how often you feel you should do. It is important to remain in
contact without becoming an annoyance.
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6. Gathering Information – Time Management
“There are never enough hours in the day”.
This is a familiar statement that is becoming more and more common these days. The truth is that
we all have the same amount of time and, therefore, it is the way in which we manage that time that
is important because once it is used it is gone forever, we cannot get it back.
Some people will be more successful than others at the management of their time. It helps if we try
to analyse what we spend our time doing. Look at the big picture to give an overview. The pie chart
provided in figure 10 gives a good overview of the time taken on typical activities that a working
person carries out during a week.
Figure 10: Time pie chart.
6.1 How your time is spent

The total number of hours available during the week is 168, of which about 89 hours will be spent on
personal activities such as eating, sleeping, and travelling to and from work. Around 40 hours will be
spent at work and the remainder is ours to manage as we see fit.
If we decide to pursue a job that requires more than 40 hours for it to work, then one of the other
areas that have a call on our time must suffer. This could be at the expense of, for example, personal
development or time spent with your family.
Usually, we will find that we only have a small amount of “discretionary” time and if we are not
careful it will be easy to run out completely. The improvement of time management is difficult. We
must treat it in the same way that other people lose weight or give up smoking.
Improving your time management needs commitment. The first step in the process is to analyse your
starting position and for that you need to gather some information, which is where the time audit
comes in.
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6.2 The Time Audit
Record all your movements, activities, and tasks on a timeline. Your analysis of this activity will
identify the activities that are taking time but not contributing to the important tasks that you have
to accomplish.
For example, it may be that unnecessary telephone calls are being forwarded to you. Phone calls that
could be dealt with by some of the admin staff. Junk mail should be filtered out before it reaches
your desk.
There might well be activities that could be carried out by other staff if you give them some simple
training or information. The activity of delegation is not only important; it is essential and must be
carried out sensibly and fairly.
Those of you who operate on your own may well be saying delegate – to whom? There comes a time
in the expansion of a business when taking on extra staff is cheaper than using your time when you
could be bringing in more business. If you have a temporary backlog of work, it might be cost-
effective to employ agency staff for a short period to clear the work and get you up to date.
A useful approach to completing a time audit can be simple. Find a timer that can be set to give an
alarm at regular intervals. This could be 30 minutes or 1 hour. Set the timer and when the period is
up, record what you are doing. This will be disruptive, but not for more than a few seconds.
Using the data gained you can analyse your work pattern. Use at least three levels of:
• Very important.
• Not so important.
• Worthless.
When you look at this record, do not be surprised if you end up spending most of your time at the
bottom two levels. The next step is to try and modify your behaviour to increase your productivity be
spending more time on the important activity.
6.3 Time Bandits

Time bandits may be important or something that we are obliged to carry out, but they will be
activities that keep us from doing things that have more value or importance in achieving our
considered goals and targets. However, you have to work out the source of individual problems:
• Was the distraction due to too much work?
• If so, have you taken on too much?
• Are the distractions important or are they due to your inability to say “no”? Routine tasks
can be delegated, and meetings can be more focused.
• One of the worse “time bandits” is inaction or a laissez faire attitude toward important or
difficult tasks. We all accomplish some activities better or more easily than other activities.
How many times have you been determined to complete a task that you have prioritised and
allocated time to, only to be thwarted by lack of motivation or being side-tracked by another
task that is not as important? The second task may be more desirable or interesting, and
before you know it time has run out.
For example, all surveyors will have to produce reports. This will not be the most desirable of jobs
and there may be other work coming in that needs your attention. However, a survey is not
complete until the report is finished and delivered.
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Therefore, rather than struggle, it will be better to find ways of making the production of the report
easier by using standard templates or an easy way to transfer pictures or recording information by a
voice recorder.
It is essential to think about what you are going to do and carry out a little planning before starting a
large or difficult task. Ask yourself:
• Is it possible to break up the task into more manageable sizes?
• Is it possible to delegate some of the task(s)?
Organise yourself so that it is easy to carry on with what you are doing, try to remove all other
distractions such as trade journals and access to the internet, switch off your email inbox reminder.
It is very difficult to stay focused on a task, especially if it is one that you do not enjoy. It is a big
failing of people running small businesses that the “paperwork” is not up to standard, or the receipts
are missing to complete the accounts. This is especially true if the business activity is of a practical
nature and the office side is completely different from the core business activity.
People will find all manner of things to do rather than complete the administration. For example, if
the documentation to produce the sales invoice is not completed in a reasonable timescale, this has
a knock-on effect because the cash flow of the company starts to deteriorate, and it is then difficult
to pay the suppliers.
The suppliers are reluctant to extend credit to the business and the cash flow gets worse, to the
point where the lack of cash brings the company down.
6.4 Practical Preparation Required

Collecting the technical and specialist information required for some reports will be time-consuming
and present specific problems as already specified. However, the surveying work that is of a practical
nature will bring its own problems.
If, for example, the surveyor is required to attend a ship and produce a report on some aspect
relating to the ship then he or she will have to make several preparations.
The first thing to remember is that you must gather all the information that you require for that one
visit. Normally the ship will not be staying in one place for long and several key people may have
been gathered in the one place at the one time.
The surveyor faces the logistical problem of getting to the allotted place at the time required. This
could be just before or after Christmas. It could be in an inaccessible port, or the weather conditions
might make travelling difficult.
You will need to take all the equipment with you that is necessary to carry out the task that you have
been commissioned to do. A second chance to collect information later may not be possible or
practical. It may be possible, however, to borrow some equipment when you arrive on board, but it is
better to have equipment that you know is reliable and works.
Ensure that you know the local circumstances relating to the work to be done. For example, on
tankers, gas and chemical carriers, there will be large areas where you will only be able to take
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intrinsically safe equipment. This means that a manual camera may be needed, and your own torch
should be intrinsically safe.
Ensure that you take your own Personal Protective Equipment (PPE). On some ships that you visit,
this good working practice might not be taken as seriously as it should be.
It is obvious, but you must take all the details of the ship and the names of the staff with you. The
new regulations on security will mean that in larger ports it will not be possible to visit a ship without
establishing good reason before entering the port and be entered onto the ship’s “visitors” list which
will be available to the security staff before you arrive. If the communication has not been as good as
it should be then you will lose a lot of time trying to establish with the port authorities that you have
legitimate business with the ship’s staff.
It would be a good idea to contact the ship before you set out. If you can ask them to confirm details
of the Estimated Time of Arrival (ETA) and names of the ship’s officers, then you have a positive
record of your expected arrival. Not only can you show this to officials, but it will also be a record for
the detail of your report. If you have access to secretarial support, then you do not have to write out
the details again.
6.5 Structure and Style

If you are carrying out a document review/study, such as research into the history of a ship’s
voyages, surveys and maintenance, then it will be important to explain the method used in
conducting the study. It is important to remember that research studies are meant to be repeatable
and if this is to be so then the next researcher must have all the relevant information. It is also
important, as part of academic study, to publish the results of your study and they should be
included in a separate section.
If you are attending a ship for a specific purpose, it is also important to set out the conditions under
which you are completing the task. For example, if you have been asked to survey the condition of a
propeller but the vessel is still in the water, then the survey will be subjected to obvious limitations
which will need explaining at the start of your report.
Attention should be given to the presentation of the report. The information should be presented in
as concise a way as possible, and do not forget your audience may not have English as their first
language.
Draw your conclusions from the evidence presented and leave any subjective statements until after
the project. Try to be as objective as possible. Drawing conclusions is not the job of the marine
surveyor. He or she should be concerned with presenting the facts and leaving the apportionment of
blame to others such as insurer or flag state.
It is important to reference your work correctly. The referencing should not interrupt the flow of the
document, but it should support what you are saying and give strength to your own arguments.
Whilst English is an international language, and is the language of science, technology, international
air traffic and, of course, maritime operations, different dialects, and the use of English as a second
language means that you must be as clear and use as simple language, as possible. If people are
stressed, then the situation will be even more difficult to manage.
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6.6 Grammar
“If language is not correct, then what is said is not what is meant; if what is said is not what is meant, then
what ought to be done remains undone.”
Confucius (Simons and Naylor-Stables, 1997)
As with any form of communication, it is important to use the correct rules, structure, and syntax if
you are to get your message across in the correct way.
The modern usage of the structure of written English includes keeping sentences short, but also
varying the length slightly to keep the reader interested in your work.
Sentences should contain information about one subject in order to avoid confusion and the
paragraphs should contain up to around four or five sentences. This clear, concise way is especially
important in the marine industry, as some of the readers might not have English as their first
language.
It is not the intention here to include a description of the English grammatical system. However, it
will be useful to include some of the more important areas to help the student with future reports
and assignments. Students are encouraged to read further about grammar and so continually
improve their writing as they progress through their career.
It is also useful to think about the meaning that your words will convey. The author has recently been
working with north Europeans from the UK and the continent. They all speak good English but when
asked to complete a simple exercise giving directions via radios the understanding started to
disappear.
The words used were appropriate but unless they were chosen carefully a “double” meaning could
confuse the message, for example, the use of the words “on top of”. Students are asked to place a
shape above or “on top of” another, which then makes a larger shape.
However, the term “on top of” could also mean that one shape is placed in a position that covers the
first. This will not make a larger shape, but it will still follow the instructions of placing one shape “on
top of” another.
The use of the comma often presents confusion as it is used too often. There are two definite
reasons for using the comma. These are:
To separate the items on a list. The comma is placed between each item except for the last one
where the word “and” is placed before the last item, such as follows:
• Numbers 4, 2 and 1 holds had leaking seals.
• The same situation was faced by Bill, Neil, John, and Roger.
To enclose a sub-clause, such as:

• The third engineer, who was qualified to STCW 95 III/2 standard, was in charge of the watch
when the pump failed.
• The raised walkway around the hatch, which was free from corrosion, was damaged as the
cargo fell from the pallet.
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The sub-clause could be one word or many and should add to the information given within the
sentence. The sentence should, however, stand on its own without the sub-clause. Therefore, you
should test the sentence by reading it without the clause to ensure that it makes sense on its own.
Quotation marks are another area where a little explanation could help considerably with reports.
Single or double quotation marks have the same meaning. The use of either one is a matter of house
style. Therefore, the statement:
• the chief officer’s exact words were ‘You can’t do that’
is the same as:
• the chief officer’s exact words were “You can’t do that”.
With reported speech it is not necessary to add punctuation other than is required by the ordinary
sentence. Quoting an actual conversation is slightly different. These would be structured as follows:
• “Why have you phoned me, it’s not my watch,” the mate said sleepily.
• “Sorry, Bill, but the old man asked me to call he needs you on the bridge.”
• “It’s not another iceberg is it Harry?”
• “I am afraid so – and this one is huge!”
Note that a new line is started as each person speaks and there is a capital letter as each speech
starts.
6.7 Spelling
Correct spelling is very important but should not be too much of a problem these days with word-
processors that have efficient spell-checkers.
There are a few problems to watch for:

• The first is that the computer might be set to English (US) and not English (UK).
• The second is that the spell-checker will not throw up where you have used “principal”
instead of “principle”, but with a bit of luck the grammar-check will.
6.8 Presentation
Evans (1990) suggests that the usual recipients of reports develop a sense of detecting unfairness. If
this is the case, then that will only reduce the reputation of the writer.
Evans (1990) suggests that it is useful if you keep the following checklist in the back of your mind as
you construct your report:
• What is the principal aim of the report:
o to inform by presenting a body of facts;
o to persuade by supplying a distillation of opinions; or both?
• What sort of people are the report’s recipients?
• Are they specialists who will understand specialised or technical language, or laymen for
whom facts must be presented simply?
• What is the context of the report?
• Does it require the use of formal language, or may points be made informally and familiarly?
• What sort of language will be appropriate?
• Should the report be couched in objective terms, using impersonal constructions and the
passive voice?
• Should its vocabulary deliberately seek to avoid connotative, emotive meanings?
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• Should technical and jargon words be avoided, or may they be employed?
• Should sentences be kept short and simple, or may they contain provisos and modifying
ideas?
• How should the data be organised?
• Are the themes of the major sections all relevant and important?
• Is the material of each section connected and related to its heading?
• Does the complexity of the report’s data require the use of a detailed schematic format?
• Do the recommendations or suggestions given derive from the findings rather than from
personal bias?
• Have presentation techniques been used to best effect to display information clearly and in a
logical sequence so as to help the reader to digest the data easily and grasp the connection
between various sections and points?
6.9 The Use of Pictures

The difference between the two images shown in figures 11 and 12 is clear. Both are of a void space
of a bulk carrier.
The first shows that the paintwork is in a much better condition than the second. However, the first
required the use of a dye penetrant to show the extent of the cracking, while in the second the
cracks can be seen clearly without the use of crack detection aids.
Figure 11: Non-destructive testing result.
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Figure 12: Crack indication without non-destructive testing being required.
The point about these illustrations is that to describe the condition of the tanks in words would be
quite an undertaking. However, using the pictures makes the job much easier.
Another illustration is shown figures 13, 14 and 15. The series of pictures shows the propeller being
removed from the end of the tail shaft. The tail shaft was then found to be badly scored and had to
be removed. The following figures show this operation.
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Figure 13: Propeller and tail shaft removed.
46
Figure 14: Propeller shaft scoring.
Figure 15: Tail shaft being removed through side shell (Note, the rudder is still in position).
The use of the pictures above shows the operation much better than could be described in words.
The pictures are much clearer in colour, but limitations of printing in colour will restrict the
advantage of this type of medium although colour laser printers, or printing services are very cost
effective now. It is understood that pictures, especially digital ones, could be altered. However, you
should always use pictures as a back-up in support of other evidence. Then they can be presented at
face value. Remember also that with modern scanning equipment a picture produced on a film
camera can also be reproduced, altered and then reprinted.
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6.10 Writing Reports
The first thing to remember is that a project is not complete until the report has been written. All the
hard work in gathering evidence, collecting your thoughts, and structuring your arguments must now
be presented in the best way. One method for this could be to organise a hard copy of the report so
that the report opens out flat and is arranged with the report body on the left and the appendices to
the right, opening from left to right.
Use all the tools at your disposal, and do not forget the saying “a picture paints a thousand words”.
Steer clear of acronyms and jargon. You must present your topic in a clear and concise way.
Communication does not only mean using the language; it also means sending the right information
in the right way.
A highly technical presentation is fine to present to a group of well-qualified people, but not to a
group of young teenagers expecting to see a presentation on the latest chart-topping songs. General
Managers may also want to see a report presented in a different way from the technical manager.
People’s needs will be different – some will only need the essentials of the project while others will
need to know the details. The executive summary (also called the abstract) should state a brief
overview and key conclusions without the detail.
The main body of the report should contain the detail required, but also do not forget that people
learn by being led from something that they do know to something that they do not. They are able to
associate the two and thus learning will take place. It is important that you take your audience from
the known to the unknown.
6.11 Typical Report Sections

A report is quite different from, say, an essay. Essays do not usually have headings or sub-headings. A
report is full of headings, sections, sub-headings, and sub-sections. It is important that they are all
numbered and follow a logical sequence that is clear and concise. Depending on the type of report
that you have been asked to write, you should consider the following sections. The headings might
change to suit the local circumstances but should be used as a framework to guide the surveyor
when writing his or her report.
6.11.1 Title / Cover Page
The title page should include:
• the name of the report (what is it about);

• a photograph of the vessel, preferably with the name visible.;
• name and affiliation or title of the author;
• release date; and
• any additional useful information, such as for whom the report has been prepared.
• Often, unless the report is being issued for use in court, a photograph of the ship is beneficial
(Reports specifically for use in course have a specific format).
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6.11.2 Declaration
A declaration that the material in the report is the author’s own work and, that the report is written
without prejudice.
6.11.3 Acknowledgement
An acknowledgement to those who have helped or influenced your work (used only for academic or
research work where you have had significant help from other people).
6.11.4 Contents Page
If the report is longer than a few pages, then the contents listing is essential. It should list the
structure of the report from here on with appropriate page or section references, such as in example
1.
Example 1:
Contents
1. Abstract or executive summary
2. Introduction
2.1 The purpose of the report
2.2 The scope of the report
2.3 Limitations, assumptions, or background
3. Glossary
(Essential for technical reports or reports of a specialised nature)
4. Main technical chapters

(Covering survey work, accident investigation, legal reports etc)
5. Conclusions
(Should be referenced back to the main body of the report. Conclusions present well-
reasoned arguments based on fact)
6. References
(State the source of material from books or other places such as the internet, journals, and
videos)
7. Appendices
(Additional detailed information that is relevant to the report)
If you are producing a report longer than a few pages, it will be essential to use page numbers within
the contents page as shown in example 2.
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Example 2:
Contents
1. Abstract or executive summary ..................................................................................................... 4
2. Introduction ................................................................................................................................... 6
2.1 To report on a structural failure .................................................................................................... 7
2.2 Limitations, assumptions, or background...................................................................................... 8
3. Glossary........................................................................................................................................ 10
4. Main technical chapters .............................................................................................................. 11

4.1 Survey work carried out on board ............................................................................................... 12
4.2 Stress calculations on different sizes of steel structures............................................................. 18
4.3 Reduced strength of corroded scantlings .................................................................................... 20
5. Conclusions .................................................................................................................................. 23
5.1 Area of the failure ........................................................................................................................ 24
5.2 Reasons for the failure................................................................................................................. 25
6. References ................................................................................................................................... 27
7. Appendices .................................................................................................................................. 29
7.1 Guide to the design and building of bulk carriers........................................................................ 30
The sections of the report should be built up in the way shown on the following five pages. This is
intended as a guide and not all the sections will be required for every report.
6.12 Report Guide

6.12.1 Abstract or Executive Summary
The abstract, summary, or executive summary is written after the report has been completed. It
should be understood by itself and summarise the report contents.
The job of the abstract is to very briefly inform interested parties about the report and its key
conclusions without them reading the whole report.
It should also give a good overview to those that do need to read the detail contained within the
body of the report.
6.12.2 Introduction
This is where the writer explains to the reader the purpose of the report. It should contain the reason
for the work. If the report is about the survey of a ship or part of a ship, then as much of the details
of the ship as possible should be listed.
The introduction should, if required, outline the scope of the report. This should include reference to
how broad an area the report covers. For example, if the report is about an accident it will focus on a
particular area or set of circumstances and not on unrelated areas of the whole ship.
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The introduction could outline any limitations or circumstances that could restrict the validity of your
outcomes. You might wish to include statements about any assumptions you have made. If the
report is a long formal report, then some background or history will help to set the scene for the
reader. If you are carrying out research of documentation (called secondary research), you might
wish to explain how you gathered your data or the criteria you used to interpret your data.
6.12.3 Glossary
The glossary is required if you are reporting on a highly technical subject. If you have any definitions
to make, unusual jargon that is to be used or if you are going to present specialist information then
these should be included at this stage.
6.12.4 Main Technical Chapters
In this section, the writer will lay out a clear description of the work that has been carried out. If the
work has been the survey of a ship the section might include:
• the procedure that the surveyor has undertaken;
• the events that have happened; and
• how the surveyor went about his or her business.
If the report is about an accident investigation, then it might be written as a logical sequence of
events possibly in chronological order.
Reports that are to be admitted in a court of law should be written very carefully. Lawyers are not
experts in different fields, but they are trained in logical thinking, and they will pick up
inconsistencies in the text. You must be pedantic in your approach.
You should be especially careful in this kind of report to stick to the facts, using short sentences.
Distinguish between the facts that you observed or found yourself and facts that were observed or
discovered by others.
Opinions and conclusions are drawn and recorded under the conclusions section.
Make extensive use of appendices so that the body of the report is short, clear, and free from
complicated information that is not relevant to the case.
6.12.5 Conclusions
Conclusions should summarise the main points of the report and answer the purpose of the report as
stated in the introduction. This section is usually the most widely read section of the report, but you
must be very careful not to express your own opinions, which are not supported by the facts of the
investigation. It is very important that no new information is introduced in the conclusion.
For example, consider that a piston is removed from a compressor, or engine. The piston has severe
heat damage and scoring to the skirt.
There could be several reasons why this piston ended up in the condition that it was found. However,
your investigation should outline the sequence of events as you have found them, and in the
conclusion section you draw together the facts and present a logical case based on those findings.
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If you found the maintenance records to be in place, then you should not state that in your opinion
the maintenance had not been carried out despite the records being completed.
Being completely objective is the key. If you present a well-reasoned argument based on the facts,
you will be writing from a position of strength.
Similarly, if a key component is missing then you have to report the facts and not speculate about the
equipment. For example, the failure of some lifting equipment was investigated. One of the
components in the chain had failed despite appearing to be adequate for the job. Unfortunately, the
work was outside and as the component failed it fell into the sea and was lost without trace.
Without examining the item, it is difficult to conclude that it was faulty or whether it had been
overloaded or misused in some way.
6.12.6 References
There are a number of internationally accepted systems for referencing work. Referencing gives
credit to the original authors of work (as it is not your own) and provides the reader with details of
how to access this information in case they wish to study it further.
One of the most widely used referencing systems is the Harvard system. Examples of how to
reference other people’s work includes:
Citing within the text:

• Use surname of author and date of publication.
o In the paper by MacDonald (1999) we see that…
o The fork and blade connecting rod (Morton 1978) …
• If there are two authors use both names.
o Souchotte and Smith (1976) explain pump design…
• If more than two authors use the first and et al.
o Pump hydrodynamics are discussed (Souchotte, et al, 1994) …
Citing a book:
• Souchotte E and Smith DW, 1976, Marine Auxiliary Machinery, Newnes-Butterworths
Citing an excerpt or chapter from a book:

• Souchotte E, et al, 1976. Extraction pumps cavitation control curves. In Souchotte E and
Smith DW, 1976: Marine Auxiliary Machinery, Newnes-Butterworths, pp 112–113
Citing a paper from a journal:

• Tate W and Harris CH, 2001, The propagation of fire in engine rooms and holds: Challenges
for Marine Engineers, 94(3), pp 26–51
• Russell PA, 2003, The use of simulators in the training of engineers: Advanced techniques:
Challenges for Marine Engineers, 94(3), pp 52–82
Citing a paper from a conference:

• Marshall VC, 1989, What goes wrong? 5th Annual European Summer School on Major
Hazards: the assessment and control of risk: 24 to 28 July 1989 Christ’s College, Cambridge
(London, IBC Technical Services Ltd)
6.12.7 Listing of References

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The list of references appears at the end of the study or report and is listed in alphabetical order by
author, for example:
MacDonald before Souchotte before Tate
If an author is cited more than once, then the references are given in date order:
• MacDonald R, 1999, before MacDonald R, 2003
If an author is cited more than once within the same year, the references should be distinguished in
the text and list of references by lower case letters (for example (a), (b), (c) etc):
• Russell PA, 2003(a), before Russell PA, 2003(b)
The list of references:

• Ganapathy V, 1996, Heat-recovery steam generators: understand the basics. Chemical
Engineering Progress, 92(8), pp 32–45
• Godfrey JC and Slater MJ (eds), 1994, Liquid-liquid extraction equipment (Chichester: John
Wiley & Sons)
• Gourdon C, et al, 1994, Population balance-based modelling of solvent extraction columns.
In: Godfrey JC and Slater MJ (eds): Liquid-liquid extraction equipment (Chichester: John Wiley
& Sons), pp 137–226
• Marshall VC, 1989, What goes wrong? 5th Annual European Summer School on Major
Hazards: the assessment and control of risk: 24 to 28 July 1989 Christ’s College, Cambridge
(London, IBC Technical Services Ltd)
• Semple TC and Worstell JH, 1996, Rethink your model for improving processes. Chemical
Engineering Progress, 92(3), pp 56–61
Citing from electronic sources:
Follow the same basic rules as given for printed sources, which means giving the same information
for a whole document:
• Holland M, 1996, Harvard system (online). Poole: Bournemouth University, available from
https://libguides.bournemouth.ac.uk/bu-referencing-harvard-style.
The text citation would be (Holland, 1996) as with a printed source.
Available from: replaces the in: used with printed sources.
The URL is given in full and not just the site name.
Please note that online sources can easily be updated, changed, moved, or deleted, which is why it is
important the accessed date is added. This allows people to know the date a site was used, and in
some cases an archive of the site can be accessed to check the information used.
6.12.8 Appendices
This section provides additional supporting information that the reader may want, such as detailed
notes of the interviews or computer printouts of data, but which is not necessary to the report. If, for
example, you have been asked to report on damaged refrigerated cargo you might want to include
the temperature recordings for the voyage. Again, the appendices should be referenced back to the
text for clarity of use.
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6.12.9 Completion
You will need to have your report proofread and you may be required to produce a hard copy as well
as an electronic copy. This is again especially true of reports that are being prepared for a court of
law.
They need to be accurate and, with the best will in the world, invariably the writer will become so
involved in his or her work that they will miss the fact that the text does not flow or that they have
not completed a thought process and the text is left unfinished.
If your report is to be used as witness testimony in a court of law, it will need to be signed. The pages
need to be numbered and ensure that any information that you wish to place in the headers and
footers is correct for this report and is not a leftover from a previous one.
The following link outlines the current guidelines for the use of experts in the legal system – UK
Justice system practice direction 35.
Written reports are encouraged. The parties are asked to co-operate with all the experts and, in
some cases, only one expert will be allowed. If you have to produce a report as an expert witness,
then the guide structure contained within this section will help in producing a professional document
that will carry your message.
However, for this type of document, you should modify the guidance in the following way:
• Due to the length of the report, usually shorter than six to nine pages, the contents page can
be left out. Keep the report short and move most of the detail to the appendices.
• In the introduction, outline the problem.
• Add in a section to cover any background to the dispute but be careful not to express any
opinion of your own.
• Under the main section of the report, describe the technical enquiry that was carried out.
• Add in a section that covers the facts upon which you, as an expert witness, have based your
conclusions.
• When drawing your conclusions, ensure that each one is set out separately and refer back to
the main report.
It is important to reference your work correctly. The referencing should not interrupt the flow of the
document, but it should support what you are saying and give strength to your own arguments.
Directed Learning
• Locate and review online material relevant to building client relationships. List five key points
and post these to the forum. Compare with those posted by others.
• Consider what actions you would take if a regular client advises you that they are not satisfied
with your service and how this situation can be dealt with. Post your thoughts to the forum.
Consider what others have posted and respond to them with how you would feel if this was
the approach taken to you.
• Produce an agenda and a list of discussion points for a meeting with a new client who wishes
to engage your services to perform a survey on three of their company general cargo ships.
The survey type is irrelevant at this stage of this course, and you should concentrate more on
the general aspects of attendance for survey. Consider how the agenda aids the meeting.
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7. Protecting Your Company and Its Employees
7.1 Introduction
It is vital to understand that if you employ staff then you also have a duty of care for them while they
are carrying out your business.
7.2 Risk Assessed Action

The process of assessing the precautions that need to be put in-place to keep staff safe will start with
assessing the risks involved.
For example, if a surveyor is required by his or her company to survey an area of a ship that looks like
it might be a confined space, then the surveyor’s employer has a responsibility to keep the surveyor
safe, as does the company that owns the vessel.
The employer must ensure that the surveyor is properly trained and knows how to approach
confined spaces. The employer will also have to assess the risks relating to the level of knowledge
possessed by the ship’s staff and condition of the equipment on board.
The answer maybe for the surveyor’s own company to supply the equipment required to test the
atmosphere before anyone enters the space. Obviously, the equipment would have to travel with the
surveyor, but the company would be taking responsible action in providing proper and correctly
calibrated safety equipment.
Under no circumstances should a surveyor enter a space where Breathing Apparatus (BA) are
required.
Risk assessments are a chance for employers to examine their business carefully and make a
judgement about the safety of their area of work.
With marine surveying, there will obviously be travel to and from the survey task. This will not only
involve the cost of travel, but it will also involve the employee’s time. Careful consideration should
be given to the employee travel arrangements.
Eight to ten hours driving followed by a five-hour survey before a ship sailed, for example, could be
leaving an employer liable or partially liable, if the surveyor had a serious accident during the survey.
If the staff are left to arrange their own travel, then the company must insist on them following a
carefully considered policy that has a built-in allowance for rest.
7.3 Insurance
One of the areas of consideration for employers is to take out insurance for their staff. Travel
insurance will probably be at the top of the list.
In some countries, it will be a requirement of law to take out professional indemnity insurance. This
is to cover the cost of an employee making a claim for compensation.
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Companies may wish to pay for private health insurance. Companies are not obliged to pay for this,
but it may be a way to attract and keep good staff.
7.4 Pensions
In the UK employers are now obliged to offer their staff a workplace pension scheme if the employee
is earning more than £10,000 per annum and is over 22 years of age and not yet at the national state
pension age. The employee will automatically be enrolled onto a workplace pension scheme, and the
employee and employer make contribution, unless the employee actively opts out.
7.5 Additional Employment Benefits

As well as private health insurance, an employer may wish to include a company car in their
employment offer. This could be a two-way benefit as the employer might be able to reduce the cost
of paying for business travel and the employee could benefit from having a modern car. It should be
pointed out that in the UK, the employee will be subjected to additional taxation due to having a
benefit in kind.
Business air travel could also be a two-way benefit as it is difficult to work during a flight in the
“economy” class but by upgrading to a business class seat the company may benefit from a more
productive flight and a less stressed employee at the destination.
An employee who is expected to incur costs on behalf of the company will often be provided with a
company credit card to manage expenditure. An advantage of this is that the expenditure is
automatically recorded, therefore, the administrative work is reduced, and managers have a running
balance for the cost centre.
Directed Learning
• To find out more about the important reasons for employers ensuring that their staff are kept
safe, please find further information at ACAS Website.
• To find out more about how to assess risk, please find further reading at Canadian Centre for
Occupational Health and Safety website.
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8. Financial Skills for Surveyors
8.1 Introduction
The driver for knowledge about this area of a business is similar to the driver for knowledge about
marketing. The depth and extent of the information required depends upon the type of business that
the surveyor is starting or developing.
Having said that, there are two financial principles that apply to all businesses. These are that a
business must have more income than expenditure or cost and it must have sufficient cash to pay its
bills.
The person who is self-employed or registered as a “sole-trader” will need to know that he or she has
income to collect and bills to pay and as long as there is money in the bank to pay the bills and any
other costs then that may be the extent of the financial information that is required to operate
successfully.
Book-keeping skills will be beneficial as this will ensure that the paper “audit” trail is in place making
the job of dealing with the Inland Revenue that much easier. The jargon of accounting and finance
will be collected along the way and as the business grows this knowledge will help when it becomes
necessary to interact with the accountancy profession.
There will be few people in a position to be able to spend money without thinking about where it is
coming from and, therefore, a check on expenditure is required. This check is called budgeting.
8.2 Budgeting
The setting and use of budgets are part of the strategic planning process carried out by the
management of the company. This involves setting objectives for the business before any figures can
be added and a budget set.
The basic guidelines for strategic planning and marketing from the company’s perspective have been
covered earlier. It will involve the operational business managers of the company in the planning for,
and the setting of, both long- and short-term objectives to meet the business plan.
The process should not be undertaken at the last minute and the process will always take longer than
you think or longer than the time that has been allowed. Time and time again business managers
have been asked for information and meaningful figures at the last minute, or there are business
managers not taking time to plan budgets, hoping that the issue will go away for another year.
Budgets are a necessary part of keeping track of the business and a very important tool for all
managers. The information, whether good or bad, means that more accurate "informed" decisions
can be made, therefore, all managers should be ready for the budgeting process when it comes
around.
From the business planning will come the financial planning in the form of the annual budget that is
required to meet the strategic plan for that year. Certain assumptions will need to be added to the
plan and the company will require their marine surveyors to contribute to the process.
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This will involve the businesses managers and surveyors making assumptions about the amount and
sequencing of work that has to be done for the forthcoming budget year. However, clear information
must come from the senior managers about any constraints or differences for the coming year.
It is not good to put together a budget that is considered to be realistic only to have it returned with
figures that are totally different from the ones used to construct the original, and then to find that
the budget’s total allocation was different from the year before.
It will be very important to look at last year’s budget and the assumptions for this year, then
compare them with the actual outturn for the previous year. This will enable an evaluation of the
forecasting techniques and systems.
Historical data is always useful, however, as the budget must be set before the year end, it will mean
that the most recent data is not available. It will still be necessary to check last year’s conclusion
when it does become available and also to check that there have been no additional problems
between the time that the budget was set and the time that it is to be used.
It is important to remember that there is a natural tendency for managers to procure the best
resources that they can, to enable them to meet their objectives. Senior managers must realise that
if the resource allocation is tight, then there is an increased risk of the managers not meeting their
objectives, due to the inability to overcome small unforeseen events.
8.2.1 Profiling Budgets
The expenditure of a department or a cost centre will not normally be equal over the 12-month
period. Therefore, it will not be appropriate just to divide the annual budget equally by 12 to arrive
at the monthly allocation. An illustration of this might be that the number of surveys completed over
Christmas might reduce and, therefore, not as much is spent on travelling and other costs.
8.2.2 Reporting Budgets
Another area where the surveyors can help the company budget controller is with the published
monthly budget reports. These reports must be understood by the people who are managing the
business and, therefore, they will not need the detail of the financial accounts.
If the reports turn out to be overly complicated, then it is up to the surveyor to point this out and
work with the budget controller to produce reports that are useful and understandable to the
surveyor.
The surveyor will also need be able to check the accuracy of the individual transactions that have
been posted to his or her budget and will, therefore, need to know the exact amounts together with
the supplier’s name.
Some accounts departments produce reports containing information such as the company’s
purchase ledger code instead of the actual name of the supplier. This will not be helpful to the
budget holder (the surveyor) because, even with a separate listing matching the code to the name,
considerable time will be lost when checking budgets due to the complicated procedure.
The budget will also need to be checked against the actual expenditure and this is where the budget
reports might link in with a full set of management accounts. The reason for this is that the
management accounts include income and expenditure for a given cost centre.
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The management accounts would also show variance against budget as well as showing profitability.
A more detailed explanation of management accounts appears later in this section.
Budget reports that indicate a variance will have to be explained by the budget-holder and the
reasons discussed with the relevant senior managers.
There are many reasons for variances, some of which are:

• expenditure items not included in the original budget;
• items included in the budget but set at a different price or volume;
• allocated expenditure that is now not required;
• expenditure intended for one month that will now not be spent until sometime in the future;
• expenditure that has been allocated to a budget without the budget holder’s permission
either deliberately by someone else or because of a miss-posting;
• an administrative hold up to the orders; and
• accounting problems with accruals or pre-payments.
It will always be the case that unforeseen events will occur. Surveys over run, locations change etc.
and, therefore, contingency plans should be built into the budget.
8.3 Costing
It is necessary for a business to monitor the full cost of providing a service or manufacturing a
product. Some of these costs are easily attributable to a particular service or component but others
are not so easy to deal with. The different types of costs are described below.
8.3.1 Direct Costs
These are the costs incurred as a direct response to providing the activity of the business. If, for
example, a transportation company operated a road haulage service as well as a shipping service, the
cost of diesel to run the vehicles will be a direct cost to that side of the business, while the cost of
fuel oil for the ships will be a direct cost to the shipping side of the business. The message to
understand with direct costs is that if the activity does not exist, neither does the cost. A major direct
cost of operating a marine surveying job, is the cost of travelling to and from the vessel.
Direct costs might also be a variable cost. For example, there will be a larger travel cost if three
surveys are completed than if only one was undertaken. However, the cost of the surveyor’s pay will
be a fixed cost because the cost is constant, independent of the earning capacity at any given time.
8.3.2 Indirect Costs
These are costs not identified as being attached to any one activity but are used for the benefit of all
activities within a cost centre. For example, the cost of shared offices, marketing departments or
senior managers.
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8.3.3 Fixed Costs
These are costs that stay at a constant level and do not vary with the level of activity. The best
example of this being the staff wages as we have mentioned. Another would be the cost of the
insurance.
8.3.4 Overheads
These are areas within the organisation that are used by each of the different income-generating
activities. For example, the cost of the finance department, the marketing department and the costs
associated with the office space will all need to be shared as fairly as possible.
Therefore, for example, the cost of the finance department should not be allocated to any one part
of the business because it serves each part, and if we are to ascertain the true cost of each part of
the business, then each part must also carry its fair share of this and every other overhead.
The biggest headache is how to allocate the overheads fairly. Let us consider, as an illustration, the
costs associated with operating a business from a building. Any income-generating activity that is
carried out inside the rooms will have direct costs attached.
However, the cost of the rent and rates will be charged to the building as a whole. This cost must be
passed on to the income-generating-activity in a way that reflects the true cost of that activity. The
way to allocate this cost at first seems easy. If we measure the floor space the cost per sq metre can
be calculated by dividing the total cost by the floor space.
Each income-generating activity can then be allocated a cost depending upon the size of room that
the activity requires.
However, this would leave a shortfall because not all areas are income-generating areas, corridors,
toilets, storage rooms and general offices are not all spaces that generate income directly.
So even this simple exercise has to become more sophisticated. The allocation of overheads is not an
exact science and will be subject to certain assumptions, for example the cost of the accounting
system could be allocated by the number of transactions made by any one department or cost
centre.
Departments may feel that they have been allocated overheads unfairly for certain areas, but other
areas will be more favourable.
8.3.5 Depreciation
The equipment, buildings and grounds that are owned by a company are collectively known as the
company’s assets. A company is allowed to record a value for its assets in its accounting system.
However, it can be seen that, although a company might pay the full cash price for an item, the full
amount should not be recorded in the accounts for the one period because the company will still
have some value at the end of the accounting period. Therefore, some value should be shown in the
accounts.
Let us say, for example, that the company purchases some computer equipment that costs £3,000.
The company must obviously pay for the equipment, which will reduce the bank balance by £3,000.
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However, computer equipment is regarded as having a life of three years, therefore, after the first
year the company will have two-thirds of the value still in its possession.
The £1,000 charge made against the profit is known as "depreciation" and £2,000, that is still the
value of the asset, is then held in a balance sheet account.
The prices for products are initially set to cover all the production costs as well as the overheads and
indirect costs. This will, after adding a suitable profit margin, naturally determine the selling price. It
must also be recognised that the selling price is also determined by the market that the product is
being sold into.
For example, a basic small compact car and a rugged off-roader will attract very different customers.
With this in mind the company may take the decision to sell the product below its full cost price to
encourage sales leading to profits elsewhere in the business.
Therefore, as long as the selling price covers the direct costs, the surplus will be contributing toward
the overheads of the overall business. This method of costing is called marginal costing and is very
useful especially if the organisation has spare capacity or is regarding a product as a loss leader.
8.4 Cash Flow

Cash flow is exactly as the name implies. It is the recording of the cash coming into and going out of
the business. This is also known as the liquid asset of the business. A company that has the ability to
generate cash to meet its liabilities will be said to have good liquid assets.
The management of cash flow is an important part of the accounting service within an organisation.
The timing of when the cash will come into the business and when it is required to pay the bills is the
central part of the management of cash flow.
Companies, that have been trading profitably have found themselves in difficulty due to cash-flow
problems. If you cannot pay your suppliers because you are waiting to be paid yourself then
problems occur, and your reputation will suffer. The accounts department will put a lot of effort into
collecting monies that are due from the sale of goods or services.
They will also use legitimate techniques to hold up payment of suppliers for as long as possible.
These two actions will contribute toward a positive "cash flow". However, it may cause operational
problems such as suppliers that will not supply goods because they have not been paid on time in the
past.
8.5 Management Accounts

Management accounts are constructed for the benefit of the company and are not subject to the
same regulations, relating to format and structure, as the financial accounts. The management
accounts are not the same as budget reports although the two could be combined.
The financial director must work closely with the business directors and managers to produce reports
in the format that is required to show the operations staff just how well or badly the business is
progressing.
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One of the first tasks is to ensure that the report is clear. Unlike the report about expenditure against
the budget, the management reports need to give the operational managers information about the
profit or loss within their department or cost centre.
It is more usual these days to produce management reports for cost centres showing all the
information about income, pay expenditure and non-pay expenditure. However, if managers are to
be accountable for the income as well as the expenditure, they must also have the power to
influence change within the organisation when systems are having an adverse effect on their area of
responsibility.
It might be that individual ships are divided into different cost centres. If so, the managers would
need to know the operating profit on a monthly basis, and against budget. Therefore, the statements
would show the information required.
Note that unlike the statements for budgets the management accounts do not need to be drawn up
to the nearest penny or even pound. The trick is to make them as clear as possible for the person
who needs the information.
The reports need to be on time. Operations managers need to take decisions based on the most up-
to-date information available. If the information is due each month then it is not good if the
operations managers do not receive the information until halfway through the month.
8.6 Other Financial Statements

8.6.1 Accruals System of Accounting
To keep proper accounts, it is important that certain conventions and systems are used so that when
there is a need to compare accounts we are comparing like with like.
The accounts may be compared from one year to the next or, if necessary, they could be compared
from one month to the next. The profit and loss statement cover the expenditure and the income for
the accounting period, which is usually one year.
When we manage personal transactions invariably, we would do so by paying with cash at the time
of the sale. The recording of this would be easy because we have already earned the money, taken it
from our bank account and then paid the cash for the transaction.
There is no time lag during this transaction as the money changes hands at the same time as the
goods. If we use a credit card to pay, a time lag occurs between the time that we collect the
purchased items and the time that payment is made, usually by cheque, to the credit card company
who has already paid the vendor on our behalf.
Large organisations carrying out multiple transactions on a daily basis will have long time delays
between the supplies being delivered and payment being made. Therefore, we need a system or
convention for everyone to work to. The accruals system of accounting uses the convention that
income and expenditure are recorded at the time that a transaction takes place and not when the
cash transfer takes place.
For example, the company superintendent might order spare equipment, for a pump, from a regular
supplier, at the beginning of February 2020. The equipment might be delivered to the ship at the
beginning of March 2020 and the cash paid from the company’s bank account in early April 2020.
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This example illustrates the need for an accounting principle or concept that is common to all
companies. If in our illustration the company accounting year ends at the end of March, we need a
system to state how to treat the expenditure for our pump i.e., when do we account for the
expenditure when it was ordered and delivered in the accounting year 2019/2020, but paid for in the
year 2020/2021. The accruals system tells us that the expenditure should be officially recorded in the
accounts for 2019/2020, when the spares were ordered and not when payment was made.
Expenses that have been incurred but not yet paid are known as accruals, examples of this are items
that are due to be paid at the end of the month or even the following month other than the month
of the records. It is more normal for income to be accrued because the service or goods will be
delivered or made before the invoice is produced and the cash collected.
Expenses that have been paid for in advance, such as insurance payments, rents, and rates etc are
called pre-payments.
The accounting system will have to be adjusted for accruals and pre-payments before the final
balances are printed to give a true and fair reflection of the business at the month end or the year
end.
8.7 Income and Expenditure

8.7.1 Profit and Loss Account
The profit and loss account bring together the information from the data collection documents, such
as the purchase ledger or the cash sales information, this information is then used to inform the
organisation about whether or not the income is higher than the expenditure over a specific time
period. It is important that the full amount of expenses and income, for the time period given, are
matched against each other.
The timescale for the profit and loss account is usually one year but can be altered to suit the
management and the legal system in a country. For example, it might be advantageous to change the
accounting year from a calendar year to match the nation’s financial year (also called fiscal year),
therefore, one accounting period could be 15 months long.
However, the official profit and loss account will not identify which parts of the operation raise the
income or which parts are costly. This will be left to the management accounts.
It is important to remember that income must be recorded separately from the expenditure. For
example, if “Frosty Refrigeration System Supplies”, earns £10,000 for supplying and fitting an air
conditioning system, but is then buying £2,000 worth of equipment from the same company, then
the accounts must reflect the full amounts. It is not acceptable to record just the £8,000 received.
The accounts must show the £10,000 in full and the £2,000 worth of expenditure.
The format for the profit and loss account that is shown in the year-end accounts is determined, in
the UK for example, by the Companies Act 2006 and the law of the land where the accounts are
being prepared must be adhered to. The format determines in exactly what order the taxation is
taken and the shareholders are paid.
8.7.2 Cash Flow Statement

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It is important for an organisation to track its cash balance on a continual basis. There is only so long
that a healthy company can survive on credit from its suppliers. If credit is extended to its customers
for too long this will also limit the amount of cash coming into the business.
Managing the delicate balance of cash in and out of the business is known as managing the "cash
flow". This is one of the biggest problems for small- to medium-sized businesses to overcome. These
companies do not have the reserves to withstand not being paid for long periods of time.
Increasing stock produces a substantial outflow of cash, which is not offset until stock is sold and any
credit term has expired. During this time, the business could be making a reasonable profit but that
will not be enough, nor will it be helpful if the cash reserves are not available to pay the bills. It can
now be appreciated that carrying too much stock has an adverse effect on the business as a whole.
The estimation of the cash available is not easy because it requires the company to think about the
future and come to some prediction about what is likely to happen.
Some things are easier than others to predict, for example, rents and rates on buildings are usually a
straight monthly payment. Payments such as energy costs will be higher during the winter months,
but by how much? Severe or mild weather will cause differences in payments from year to year.
It is possible with experience to increase the accuracy of the cash flow into and out of the business,
but the problem comes with the unforeseen or overlooked emergency items. These need to be paid
for and, therefore, it is important to build in a contingency element into the cash-flow analysis.
The great benefit of checking cash flow is that the financial controller can see where the cash is
generated and where it is consumed. The efficient management of these events can, therefore,
prove very beneficial.
If the business events can be arranged so that the cash can be collected before it is spent, the
business will have its own cash to spend on its expenses. It will not have to rely on the bank or its
own reserves to pay off its debts. The cashflow budget for the following year can be built from this
year’s actual outturn.
8.7.3 The Balance Sheet
The balance sheet is a snapshot of the position of the business at one point in time. This is why the
statement is headed by a single date at the top, which is the date that the sheet was prepared.
As its name suggests, the balance sheet will always balance; this is because of the double entry book-
keeping and the fact that the balance sheet is designed to show both the assets of the company and
the claims against those assets. The investor in the company can then see the total worth of the
business.
For a company having no borrowings or liabilities to creditors, the balance sheet would be simple.
Total assets = equity capital

However, if the company has borrowed money or has purchased equipment that it has not yet paid
for, the company owes money to people or organisations other than its shareholders. These
responsibilities to pay are known as liabilities and this start to make the balance sheet more
complicated.
64
Total assets = equity capital + liabilities
There is a picture building up about the make-up of the balance sheet. It would not be desirable to
produce a new balance sheet after every transaction. Therefore, the snapshot is only taken at a set
date usually at the same time each year.
It shows the source of money, equity capital or liabilities to creditors, where money has been
borrowed from and where it is owed. It also shows what the business owns, its assets, at any one
point in time.
The assets are usually divided again into fixed and current assets. The fixed assets are those that
remain in the business for more than a year, usually items such as land, property, plant, machinery
and other equipment (furniture, computers, telephones etc). The current assets are those assets that
are continually changing and remain with the company for less than one year. The current assets
comprise:
• debtors;
• stock;
• cash; and
• short-term investments such as stock market investments.
Current assets are sometimes referred to as circulating assets because of their continually changing
nature, which is in turn called the turnover of the business.
Directed Learning
Think about your business, or the department you work in, and if you know where the most important
expenditure takes place:
• What would happen if those suppliers did not receive payment and refused you their goods or
service?
• What action can you now take to reduce any impact from such an occurrence?
65
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09/11/2022]
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https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part35 [Accessed 09/11/2022]
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© Copyright Informa Connect Limited 2023. All rights reserved.
These materials are protected by international copyright laws. This manual is only for the use of course participants undertaking this
course. Unauthorised use, distribution, reproduction or copying of these materials either in whole or in part, in any shape or form or by any
means electronically, mechanically, by photocopying, recording or otherwise, including, without limitation, using the manual for any
commercial purpose whatsoever is strictly forbidden without prior written consent of Informa Connect Limited.
This manual shall not affect the legal relationship or liability of Informa Connect Limited with, or to, any third party and neither shall such
third party be entitled to rely upon it. All information and content in this manual is provided on an “as is” basis and you assume total
responsibility and risk for your use of such information and content. Informa Connect Limited shall have no liability for technical errors,
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DIPLOMA IN MARINE

Welcome to module 3 of the Lloyds Maritime Academy Diploma in Marine Surveying.

In either case, the need to gain experience as a surveyor is essential.

Figure 2: A private yacht and a large commercial cruise ship.

Figure 3: A 2865GT oil/chemical tanker vessel.

1.2 Starting a New Business

1.3 Developing an Existing Business

What do our customers want?

Figure 4: Example of a networking opportunity. (RINA, 2022)

“I didn’t know that your company provided that”.

1.4 Bringing Your New or Existing Business to Market

The invoice must also contain the following information:

2.2 Business Planning in Larger Companies

2.3 External Considerations

The state of the industry:

• Political Changes that will Affect the Existing Market:

Figure 6: Salalah as a hub port.

For more information, see the Ansoff Matrix website.

2.4 Production of Business Plans

2.5 Business Plan Structure

The answer is:

3.2 Bank Loan

3.4 Unconventional Sources

4.2 The Focus of the Report

The major advantages are that:

Figure 8: A training centre being assembled.

Figure 9: A fire training centre built by Viking Recruitment in Dover.

5.1 Preparation and Information Required

Figure 10: Time pie chart.

6.1 How your time is spent

6.3 Time Bandits

6.4 Practical Preparation Required

6.5 Structure and Style

To enclose a sub-clause, such as:

There are a few problems to watch for:

6.9 The Use of Pictures

Figure 11: Non-destructive testing result.

6.11 Typical Report Sections

6.11.1 Title / Cover Page

The title page should include:

• the name of the report (what is it about);

6.11.4 Contents Page

1. Abstract or executive summary

4. Main technical chapters

1. Abstract or executive summary ..................................................................................................... 4

4. Main technical chapters .............................................................................................................. 11

6.12 Report Guide

6.12.4 Main Technical Chapters

Citing within the text:

Citing an excerpt or chapter from a book:

Citing a paper from a journal:

Citing a paper from a conference:

6.12.7 Listing of References

MacDonald before Souchotte before Tate

The list of references:

Citing from electronic sources:

The text citation would be (Holland, 1996) as with a printed source.

Available from: replaces the in: used with printed sources.

7.2 Risk Assessed Action