Introduction
I am a strong adherent to the idea provided in the task, because I really think that, unfortunately, we – students – do not have enough time to devote it to our favorite interests. Still, if we ponder over more globally, we will actually observe that the opportunity of establishing our own work is persistently walking around each of us. I guess, everyone has always thought of mixing business with pleasure.
Well, business plan is the thing that combines both expectations from presenting business and telling your wonderful ideas to your presumed investors. According to this, we are going to talk about the situation concerning fictitious experience of creating a company of my own along with all the details needed.
Combining hobby and work
As Riddle (2016) stated, “Put simply, perform your professional functions while in your work environment and keep the playtime activities for another location.” Actually, I assume both business and my sort of pleasure to be balanced just not to obtain the so-called cognitive dissonance. For this, I always recommend to estimate the minimum and the maximum boundaries amid what is doable and what can be hardly done.
Personally, I had such a situation, when I wanted my hobby to become a real business plan. That was around one year ago within California (or The Golden State as local people call it) – the pearl of the whole North America. At that time, I have already had friends of that place. Our common hobby was to produce dishes of the local cuisines. It must be noted that these cuisines are appreciated highly with the majority of visitors due to its unique mix.
Idea for work
One day, I thought about the idea of creating a net of restaurants in hotels along the seashore between Los Angeles and San Diego (straight to the Mexico-United States border). This land is assumed to be very popular worldwide and, probably, is the best considering the territory of the West Coast. Unfortunately, as we all know, our needs are unlimited, while resources are limited. Frankly, we are lucky to be involved in such an industry. As the statistics goes, the tourism has achieved the second place (conceding the lead rank because of microelectronics) revealing the impact on the California’s budget.
In such a way, we have imagined that we do not have enough money to realize our cherished dream. Well, the idea to find investors appeared immediately. The only step before making our hobby true in business laid in negotiations with our possible investors exactly. Frankly speaking, this was a critical moment for everyone, because each of my friends and investors understood what profit could be at the end of every tourist season. We tried to convince them with every new strong argument. We had a small talk about possible employment of local people who do not care how much money they will earn during the exact period. We also had some funds to meet the restaurants’ need of being advertised at the most crowded places. Apart from this, the market situation along with competitive advantages were discussed. To be more precise, we have also successfully conducted a survey devoted to the existing competitors. It turned to be a considerable quantity of similar tourism-oriented businesses in the chosen area.
The last most important and paramount action we have done was an approximate financial accounting for the nearest three years.
* comparing to the fictitious world’s rate
Gracefully, we had this agreement. Thus, our fertile collaboration has started to spinning round and round as the investors understood that this was not a simple hobby for us.
Idea is actually very feasible. Our prominent vision for the near future is to become a very competitive profit-making unit on the South Californian coastline year by year. Moving to the preliminary executive summary. According to the above presented graph, initial investment of seventy million dollars appears to be the best suitable for both the restaurant net’s development and profitability. As we have already singled out our potential customers (visitors), it is more than obvious that we will surely concentrate our rapt attention on them firstly. Hitting the market appears to be a realistic plan. Being an entrepreneur means to be innovative. It must be mentioned that our desired business is not so popular, as there is a great quantity of different fast-food restaurants, cafes etc., still, obtaining different cuisines is to be something new on the California’s tourism market horizon.
This form of business (it is meant by tourism business) has and may have several benefits from our business:
1) A persistent amount of visitors every season;
2) A so-called interesting “mix of cultures” presented in one establishment;
3) As a consequence, there appears an opportunity for investors to receive more money during one fiscal year.
Business description
In general, the sphere of business we wanted to connect to is a tourism business. My friends and I have become the chief managers here. Sometime later, we started looking for an obedient and desirable staff that would have been able to perform the work we had been doing earlier. It must be a generally known fact that the so-called “Californian” cuisine is a peculiar mix of dishes throughout the whole world. Thus, people who come from the farthest point of the globe can find almost everything they have got accustomed to eat at home. To maintain the worthwhile level, we decided to employ from two to four head-cooks per every restaurant.
It was mentioned above that the level of local cuisine saturation in the tourist-oriented zones is small and second best. This means, we can surely expand the regional market with such kind of services in the near future. From now on, it will always be a person, who will be responsible for a building occupancy, twisting an enterprise, and creating a new clients’ database. There will hardly exist any hierarchy because there are only five of us now. Actually, this form of business can be undoubtedly suggested to be a profitable one.
Why California
During many of decades, the state started progressing rapidly concerning tourism business. This means that people will always need a set of services. Tasting the local cuisine is considered as one of the first among them all. The main advantage for us will always be a visitor flow. We had already examined the prices for such kind of services in the neighboring areas and then decided to set the best attractive prices. At the same time, we did not forget about our investors who also had to receive gains from our activity.
Business details
I decided to name my net of restaurants like “Sincerity in Lies”. This is because, though the cuisine is local, it is created of the ones from such countries as China, Mexico, Spain, and so on so forth.
We thought of creating a chart of accounts as well. This had to be a very important thing for our investors, as they wanted us not to manage their project money only, but also to illustrate all the possible resources that could have been consumed. Fortunately, our business scheme is not that hard and ambiguous. That is why we just had to mention the place where we were going to buy products and the place where those products would have been delivered. There will be two sources of revenue:
1) Price for dishes and beverages itself;
2) Voluntary tips.
It is obvious that tourism (along with conveniences for tourists) appears to be a large industry within the USA. Nobody will actually negate the fact that this country is one of most prospering ones worldwide. Approximately fifty million people visit this wonderful land annually. Absorbing one per cent of the world’s tourism market is meant by incoming two or even more billions of dollars to the American national treasury. These fantastic indicators can be honestly compared with the ones that show destinations’ growth rate – it is a top five one. Unfortunately for our business, not all people love the idea of having a bite in the establishments like our one is. The main reason for this is their age. For this reason, we did a presumable research obtaining the following figures:
Explanation for this pie chart: it seems to be evident enough that young people visit restaurants very seldom. This must hardly be their essence, as they would rather go to either a club or a shopping center to have fun. Old visitors tend to, as if, listen to silence and to have a quiet atmosphere. Consequently, mature tourists are considered to be the most spectated units in our business institution.
GAAP to IFRS
If the conversation is about what acts my company should use, I will surely say that we would better use GAAP; still, considering IFRS as well. However, the research by Schmid and Martino (2015), “Many of the world’s capital markets now require IFRS, or some form thereof, for financial statements of public-interest entities.” We are interested in GAAP or Generally Accepted Accounting Principles because they are adopted to every state’s policy. At the same time, International Financial Reporting Standards is suggested to be even more popular here; still, we have such an objective for the future as to develop both kinds of standards. As the definition goes, the last mentioned international standards regulates the rules of making a financial report that is in need for outward users just to think whether to make an economic decision concerning an enterprise or not. In general, IFRS provide us with about fifteen standards. Unfortunately, we cannot find there something considering the customers’ information, for instance.
As you may have understood, Generally Accepted Accounting Principles are more than even convenient for any entrepreneur either in the USA or in any other part of the globe. That is why the predominant majority of companies worldwide follow its issues. At the same time, just to know, a firm does not necessarily need to utilize GAAP and to provide financial statements as GAAP demand. Thus, some common standards are omitted. As Gresham (2016) noted, “Some of the principal components that GAAP covers on a financial statement are debt, costs, investments, revenue and sales, taxes, time periods, disclosure and profits. For instance, GAAP requires costs to be measured based on when the expense was made and not adjusted based on inflation levels or other factors.” Last but not least is that these kind of financial statement standards manages the entity to present itself as a whole.
Incorporating changes
Another interesting question is both how and when to include any possible alterations in the company’s books and records. If we just move back to the GAAP methods and issues, it is important to emphasize that many businesses nowadays like to opt out the aforementioned standards. Consequently, they have to grapple with a situation in which a manager balance a checkbook at the time the check is already presenting. After this, the funds are still on the account, while the above-mentioned amount of money is deducted from the balance.
Of course, after the cooperation amid our investors and us is successfully agreed, it seems to be a paramount phenomenon not to make mistakes in the accounting (as it is one of key dogmas of the company’s activity at all). As I was the idea generator of establishing this enterprise, I was elected as the chief person “on board”. An everyday accountability was among first things I tried to implement as a head-appointed person.
Balance sheet
1) To welcome auditor to make a general revision;
2) To organize a monthly transfer of the part of the money to the investors’ accounts, as they own fifty per cent according to our agreement.
The first method will actually reduce the level of the enterprise corruption at places. Moreover, the cashier’s duty is to close the cash on time along with attaching the daily check to the main business accounting.
The second method will give an opportunity to as if throw out “unnecessary” costs that belong to the investors by right. As you may have guessed, my policy is to keep money piece by piece. On one hand, acting in such a way will enforce chances to look better after assets and resources the enterprise has. On the other hand, this action will decline the level of the staff liability.
The implementation of each will start from the very beginning of the company’s activity. Hence, the certain rules of managing the accountability will be established during the very first week as we plan. It is also important to note that some either challenges or resistances can emerge. I feel the desire to single out the problem of loyalty and integrity within the staff. Actually, we do not observe any other kind of complicated issues. Under intent look of security and camera recorders, it will be easy to control the conditions in which money stay.
Business environment was always considered a very serious and a meaningful link for every entrepreneur. During the period a powerful enterprise is being forming, it certainly faces many obstacles. For instance, we have a problem with protecting the customers’ information. Personal data ought always to be under protection in the whole world. Our small firm is not an exception for this type, of course. As independent units, we decided to cooperate with the hotels we are placed at by using clients’ names-surnames and the room numbers (as is accepted in the majority of hotels). In such a way, we almost know nothing about our visitor; still, we know where we can find him or her in some extraordinary cases.
The Sarbanes-Oxley Act
One should obligatory mention that this act appears to be a very important and efficient one. Being created in 2002, it regulates the business audit of the company. Along with my offered twice-a-year audit, the Sarbanes-Oxley Act ought to be a very strong mark considering the whole company’s activity. In general, the Act is implemented to toughen requests for both the financial accountability and its preparation. Our investors are those people who have their stock. So, they are registered in The United States Securities And Exchange Commission (general called SEC).
One of the best issues is the existence of the public company accounting oversight board. This means that all the executives of the company will hardly hide any financial movements. In addition, we have to note that unfair managers are not an example of our business, as this Act prevents such actions.
Conclusion
Together, we have already explored the main issues concerning the opportunity of the establishment of local cuisine restaurants along the mysterious seaside full of foreign visitors. To my mind, if our managerial staff will collaborate thoroughly and according to the methods provided above, our investors will be contented.
References
Riddle, J. (2016). Successfully Mixing Business with Pleasure. WorkAwesome. Retrieved from
http://workawesome.com/office-life/successfully-mixing-business-with-pleasure/
Schmid, D., & Martino, R. (2015). IFRS and US GAAP: Similarities and Differences. Retrieved from
http://www.pwc.com/us/en/cfodirect/assets/pdf/accounting-guides/pwc-ifrs-us-gaap- similarities-and-differences-2015.pdf
Gresham, T. (2016). What Principles of GAAP Affect the Items Reported on Financial Statements? Small Business. Chron. Retrieved from
http://smallbusiness.chron.com/principles-gaap-affect-items-reported-financial-statements- 44690.html
Money Management International. (n.d.). How to Create a Personal Balance Sheet? Improving Lives Through Financial Education. Retrieved from
http://www.moneymanagement.org/Budgeting-Tools/Credit-Articles/Money-and- Budgeting/How-To-Create-a-Personal-Balance-Sheet-and-Determine-Your-Net-Worth.aspx
