You want to start your own business. You found an investment group that is willing to give you the capital needed for the first year of your business, but only if you can convince them you have a solid plan for the success of this business. Your investor is very concerned with how the accounting functions of this business will be handled. You must persuade your investor to put up the capital by addressing the following questions in your business plan:
o What is the name of your business?
o What type of business structure is it (sole proprietorship, partnership, or corporation)? Why did you choose that structure?
o What type of services or products does your business provide?
o What role will accounting play in the start up of your business?
o What type of work characteristics will you look for when hiring your accounting staff?
o What education should a person have in budgeting, internal controls, and cash management before going into business?
o What kinds of internal controls will you put in place for the business?
o How will your managers use financial information to predict outcomes for your business?
1. You have developed an interest in kite boarding, a relatively new sport that is growing quickly. You will name your business Blue Water Kiteboarding, and your plans don't limit the scope of your business to only US coastal towns with wind. You have aspirations for a worldwide marketing strategy.
2. You conduct some research about what sort of business structure would be suitable as you and your friend get ready to begin operations. You understand that if you start as a partnership, you can easily incorporate your business at any point in time. Your partner is not sure he is ready to be a full partner and if true, you can be a sole proprietor until he elects to join you. If he doesn't, you can incorporate your sole proprietorship easily. There is no reason to become a corporation immediately because you understand that there are costs and formalities involved. There are usually two main reasons that a business would incorporate: to allow for additional investors and to limit liability. Both of those can be accomplished in a partnership but not as easily as in a corporation. Of course, a partnership is easier to form, but case law is loaded with litigation involving partners and their disputes.
3. Your business will offer two types of products and services: first you will offer equipment for kite boarding and second is lessons. Each will act as a feeder to the other. Since you have a marketing degree and have become obsessed with kite boarding, you can be an expert in both. Because your customers will tend to be young ...
The 1000+ word solution answers all the questions in the problem in an approach which provides adequate information for a business plan. In addition to answers to the questions, the solution diverges into financing options for the company as it grows.