KEAT Partners Assessment - Example

BUSINESS PLAN: KEAT PARTNERS By Student Name Course code + name Professor name University name City, State Date of submission Table of Contents Executive Summary………………………………………………………………………………..…….3 Introduction ……………………………………………………………………………………..…………4 Detailed description of business and strategy ……………………………………………..………….4 Ownership and legal structure……………………………………………………………….………….4 Skills and experience……………………………………………………………………….…………….4 Marketing ………………………………………………………………………………………………….4 Products or services to be offered………………………………………………………………………6 Target market business………………………………………………………………….……………….6 Industry (competitors)………………………………………………………………….…………………6 Location……………………………………………………………………………………………………7 Explanation of management structure/procedures …………………………………………………..8 Hiring and staff requirements ………………………………………………………….…………………8 Production / assets required…………………………………………………………………………….8 Production / service process ……………………………………………………………….……………8 Financial Management……………………………………………………………………………………9 Identification of risks ……………………………………………………………………………………..9 Outline of funding needs……………………………………………………………………………......11 References ……………………………………………………………………………………………….13 Executive Summary KEAT Partners are one of the leading and fastest growing Accounting, Business advisory and taxation services in Australia. The professional firm is headquartered in Melbourne’s Collins Street. To move beyond its current level, professional firm will expand the services it offers to include bookkeeping. This will call for more investments marketing and number of staff to increase the size of business in order to complement the services offered with this new line of businesses. The business will offer customers bookkeeping services with CPA oversight at an affordable price. In order to achieve this, undergraduate trainees will be hired alongside with student bookkeepers and graduate managers in order to maintain the costs of the firm as low as possible. The effect will be an increase in the amount of sales twice the current amount over the next 3 years. Business Plan: KEAT Partners Introduction In the highly competitive environment of the modern world, formal planning in businesses is a fundamental element in achieving the success of the business. This business is well documented as a tool of communication and serves as a strategic plan. Detailed Description of Business and Strategy The business operating within the industry is driven by client referrals. This means that KEAT will have to be aggressive in order to be more attractive to many clients seeking tax and audit, advisory and bookkeeping services. It is expected that these clients will then pass word onto others. Through this activity, it is expected that the business will experience higher growth levels. Ownership and Legal Structure KEAT Partners was founded and owned by four partners, the firm was created purposely to address the need for the professional services of comprehensive audit and accounting documentation. The firm continues to increase on its customer base and the greater market share through the provision of quality professional services. Skills and Experience The partners are all qualified and experienced in areas of auditing, taxation, accounting and book keeping. These partners boast of advanced skills in computer literacy and experiences with Quick books, Excel, Peachtree and Microsoft. They also depict extensive knowledge in filing and record keeping, skills in inventory management and control, manufacturing schedules as well as warehousing, making extensive use of management skills in recruitment, training, and evaluation of employees, development and implementation of policies, budgets and procedures. The partners have an in-depth understanding and knowledge in the accounts receivables, payables and payroll preparation (KEAT Partners, 2013). Before recruitment of any new employee into the firm, the new candidates are required to have possessed an experience preferably from an accounting firm. Only those employees, whose previous duties were posting of loan repayments, assisting customers in solving accounting problems, preparing and analyzing financial statements and carrying out bank reconciliations are considered. Marketing A direct marketing package in form of a direct mail which consists of a tri-fold brochure, an introduction letter and a reply card will be sent to all the newer businesses that have been introduced into the company’s market share. The letter will at first introduce KEAT Partners and then state the importance and necessity of having a good team of accountants for the success of the new business. The letter will proceed to provide the information on the kind of services offered by the firm and what makes it different from other accounting and professional firms within the industry. It will also contain a promotional offer that will allow free one month bank reconciliation services for up to 200 checks (Lange, Mollov, Pearlmutter, Singh & Bygrave, 2007). Approximately 15 days after the letters are sent, a telephone follow up will be conducted in order to ensure that the brochure was received, answers to any queries from the customer and reschedule any possible appointments. About 60 new businesses in the market will be targeted. A similar strategy will be utilized to certain selected home based small businesses and self employed individuals. This letter will be different from the one sent to new businesses. This is due to the fact that the already established businesses have a relationship with at least one of the accounting firms in the market. Therefore, this particular letter will try to emphasize the need for market differentiation that the firm has established over time. This will help KEAT Partners to depict the fact that they are able and willing to offer services above the rest of the existing competitors (KEAT Partners, 2013). A list of the established self employed and small businesses will be compiled from the local directories while that of the home based individuals can be obtained from the direct media. It is highly recommended that the mailings be done over a several months period and not at once so that a proper follow up through telephone calls is made (The Australian Government’s Principal Business Resource, 2013). A customer database can be developed besides the purchased list. The firms aim at monitoring the local newspapers for announcements concerning the new businesses in the area. The new names can then be added to the company’s data base. Notwithstanding, KEAT Partners are also considering a strategy in which they will develop a one page newsletter that will be mailed on a quarterly basis to the prospects and the customers in the data base. The letter will be crucial in informing the customers about any changes and developments in the company concerning the services offered on audit, tax, advisory and bookkeeping. The letter will as well serve to remind the targeted businesses and individuals on the core competencies of the professional firm and what makes them stand-out within the market (Tusin, 2006). Products and Services to be Offered The current services offered by KEAT Partners include taxation services, management/ cost accounting services and also, QuickBooks services. Tax services include tax preparation, addressing tax issues like payroll tax problems, bankruptcy, audit representation and IRS issues and most significantly, tax planning. The management / cost accounting services include an analysis of costs and margins, audits, financial projections and set up for the processing of credit cards. The QuickBooks services will include QuickBooks training, QuickBooks sales and set up. KEAT Partners intends to add to their list a set of bookkeeping services that includes payroll processing, accounts receivable that includes invoicing, entry, deposits and collections, accounts payable that includes bill paying and entry. Others include sales tax processing, bank reconciliations, preparation of financial statements, inventory management and other financial reporting (KEAT Partners, 2013). The above bookkeeping services are expected to be offered at the rate of $ 35 per each hour to every bookkeeper. The customers will be billed between $ 20 and $ 30 after the benefits and taxes have been factored in. The rate of the firm is very economical and affordable as compared to other competitors within the market (Small Business Administration, 2013). Target Market Business The professional firm targets small businesses of up to 25 employees giving more emphasis to the new business start ups, the self employed individuals like contractors and such home based businesses as freelancers, consultants and professionals (Small Business Administration, 2013). Target Consumers KEAT Partners targets upper income households, the elderly in the society and the women, the new residents in the area and the seasonal residents (Small Business Administration, 2013). Industry (competitors) There is a stiff competition posed by many other professional firms that are in the market to offer assistance to individuals and small businesses with accounting, taxation, book keeping and advisory needs. It is however worth to note that the firm has created a loyal customer base due to the extensive experience of the partners that range from manufacturing to accounting for different organizations and having worked within different financial positions. This has given the firm a competitive advantage over its competitors given that the clients are served to the satisfaction of their needs hence getting value for their money. KEAT Partners has mastered the art of doing their business in a quest to out-perform their immediate competitors. The firm is run and operated at minimum costs and assists the clients to save more money by drawing the attention of its clients on areas where they can save the resource from and thus, providing them with strategies for increasing their respective cash flows. The firm does this by adopting a pro-active approach that prevents late provision of solutions to the client questions which might be in an effort to salvage challenging situations (Palo Alto Software, 2013). The competitors, within this industry, are mostly focused on the volume of output since they try to increase the number of clients served. This leaves them insufficient time of trying to understand the client well and the business operations and thus, not offering the necessary advice that is required. The willingness of the KEAT Partners to meet their client seven days and on weekends within their homes and offices has offered a great convenience to the clients hence continuously attracting even more customers including the disabled (Cohen, 2002). For a firm to be successful in the industry; first, it should possess vital services that are designed for the end users. Second, it should be able to control its overheads and operational costs. Third, it should be able to allow for an ongoing and regular customer feedback, make use of latest technology and also, keep an eye on every dollar of the client in order to accord them the most desirable advisory services on how to control costs. Fourth, it should have a dedicated management and support staff team (Palo Alto Software, 2013). Location KEAT Partners’ professional firm is headquartered in Melbourne’s Collins Street in Australia (Tusin, 2006). Operations Explanation of Management Structure/Procedures The professional firm is managed by four partners who have equal roles and responsibilities of managing the firm. They are Lawrence Pongonis, Jenny Keat, Paul Dorger and Timothy B. Mathews. With the introduction of bookkeeping services, Lawrence Pongonis and Jenny Keat will be responsible for overseeing the work performed by the part time bookkeepers. The bookkeepers must be in possession of MS or MBA accounting qualifications or their equivalent and also, depict intense book-keeping experiences. The managers will continue to work from their current office that they share with the other managers. They are also encouraged to greatly consult on areas that they need to make decisions that will affect the entire firm of professionals (B plans, 2013). Periodically, all the four managers will visit the bookkeepers working on the site and carry out independent audits of their work to ensure that there are no errors or issues for the client. Any problem that might be spotted in the cause of these checks should be reported immediately to the team leader to initiate the necessary corrections (B plans, 2013). KEAT Partners will remain to be in close contact with the bookkeeping team leaders and carry out work sample reviews from the individual bookkeepers at least once per month (B plans, 2013). Hiring and Staff Requirements The employees and staff of KEAT Partners must be logical, methodological and good in calculations. They need to have good information and technology skills as the modern office moves to paperless environment. There is also need that these individuals command good skills in communication in order to be able to understand the business of the client. KEAT Partners encourage all individuals who would want to work with the firm to set out their respective long term goals and ambitions in order to allow for these employees establish and specialize early in their careers. The firm offers these individuals broader learning and experience since they get to work with various organizations (B plans, 2013). Individuals likely to be considered for employment with KEAT Partners need to have a degree in a business related course with professional qualifications that can lead to forensic accounting, business recovery or insolvency, audit / assurance, corporate finance, tax advice and financial accounting. Production / Assets Required The firm makes use of assets such as furniture and fixtures that are fitted within its offices, the information technology assets that are utilized in the day-to-today operation of the affairs of the organization and the media and entertainment assets for example radio and television that are also within the offices of the firm (B plans, 2013). Production / Service Process Unlike products which are physically produced and distributed into the market for selling, the accounting services are produced and consumed in a real-time environment on simultaneously manner (Cohen, 2002) Financial Management The following assumptions are incorporated into the pro-forma statements of KEAT Partners. First, the assumption that all of the operating costs have been determined and are based on the KEAT management research of similar companies within the industry. Second, the assumption that all of the automated systems that the firm intends to introduce will significantly reduce the operating costs by cutting down on the staff requirements. Third, there is the assumption that the development and start up costs will be amortized over a five year period. Fourth, the operational costs and overheads are determined on annual basis. Fifth, the assumption that all of the salaries of the partners and managers are determined on the basis of the fixed salary expense rates (KEAT Partners, 2013). Identification of Risks KEAT partners, just like many other professional firms, face a myriad of financial, scandals and operating risks. The firm handles both the financial aspects of organizations and individuals. The firm also assigns its employees to handle financial aspects of individuals and business organizations. In all these cases, the individual employees are prone to risks because of the nature of their assignments. The most common types of risks include; the misleading financial statements, conflicts of interest and fraudulent activities (Wassinger & Baxter, 2011). Misleading Financial Statements; the major risk in most of the auditing and accounting firms is the calculation of financial statements that are not accurate hence misleading stakeholders’ views. Preparation of the financial statements of an organization requires higher degree of precision and accuracy. KEAT Partners ensure that the accounts and audits have been accurately performed and information prepared accordingly by employing qualified individuals. The organization also ensures that the work performed is double checked and reviewed before being presented to the client (KEAT Partners, 2013). The risk can as well be caused by conflicts of interest; in this case, if there is an existing conflict of interest, the involved individuals may intentionally create misleading financial statements in order to make the financial statements look better. The auditors then will risk missing important information during the audits. It is critical that all financial information be accurately audited and honestly presented with all the rules and regulations being adhered to (Wassinger & Baxter, 2011). Conflicts of interest; KEAT Partners try to avoid conflicts of interest that might arise out of affiliations that exist between the client and the business. If an audit and accounting firm offers services to a business that is owned or managed by an individual’s who is a relative of a senior employee of the firm, then a conflict of interest is likely to result. This might arise out of the fact that the relative might ask the firm to adjust the financial statements in order to make them look better and raise the profits of the company than it actually is. KEAT Partners carefully selects its clients to avoid this type of risk (KEAT Partners 2013). Fraud; KEAT Partners, just like other auditing and accounting firms, face the risk of fraudulent activities. This risk occurs due to the nature of the information handled by these companies. Auditors and accounts receive sensitive information that they use in carrying out the assignments as required by respective clients. In the event that the information falls to wrong hands, then the chances of fraud are higher (KEAT Partners, 2013). Budgets, Cost Volume Profit analysis and Financial Statements SALES FORECAST Sales Forecast 2014 2015 2016 Unit Sales Tax Preparations £ 120 £ 125 £ 130 Cost Accounting Analysis £ 60 £ 61 £ 63 QuickBooks Services £ 55 £ 60 £ 61 Bookkeeping Hours £ 1,575 £ 3920 £7855 Total Unit Sales £ 1,811 £ 4,178 £ 8,113 Unit Prices 2014 2015 2016 Tax Preparations £700.00 £ 800.00 £ 900.00 Cost Accounting Analysis £ 1,100.00 £1,200.00 £ 1,100.00 QuickBooks Services £ 310.00 £ 320.00 £ 330.00 Bookkeeping Hours £ 35.00 £ 36.00 £ 35.00 Sales Tax Preparations £ 93,500 £96,500 £ 102,250 Cost Accounting Analysis £ 60,100 £ 64,000 £ 66,000 QuickBooks Services £ 27,100 £ 27,700 £ 28,600 Bookkeeping Hours £ 48,100 £ 118,750 £ 236,500 Total Sales £ 213,100 £ 296,950 £ 423,350 Direct Unit Costs 2014 2015 2016 Tax Preparations £ 37.00 £ 38.00 £ 39.00 Cost Accounting Analysis £ 32.00 £ 33.00 £ 34.00 QuickBooks Services £ 0.00 £ 0.00 £ 0.00 Bookkeeping Hours £ 16.00 £ 17.00 £ 18.00 Direct Cost of Sales Tax Preparations £ 4,780 £ 4,975 £ 5,163 Cost Accounting Analysis £ 1,909 £ 1,990 £ 2,050 QuickBooks Services £ 0 £ 0 £ 0 Bookkeeping Hours £ 24,550 £ 59,875 £ 118,750 Subtotal Direct Cost of Sales £ 31,039 £ 66,640 £ 125,763 Outline of Funding Needs Concluding Statements The costs that will be incurred in introducing the new bookkeeping services are analyzed as below; Milestones Milestone Start Date End Date Budget Department Manager Redevelop Website 12 / 1 / 2013 1 / 1 / 2014 £ 2,400 Marketing Manager List Website on Databases 1 / 1 / 2014 1 / 15 / 2014 £ 600 Marketing Manager Change Yellow Pages ads 1 / 1 / 2014 1 / 15 / 2014 £ 500 Marketing Manager Search Engine Marketing 1 / 1 / 2014 12 / 31 / 2014 £ 11,000 Marketing Manager Website Best Practices Section 12 / 1 / 2014 2 / 28 / 2014 £ 0 Marketing manager Redevelop Brochure 12 /1 / 2014 1 / 1 / 2014 £ 2,000 Marketing manager Print New Brochures 1 / 1 / 2014 1 / 15 / 2014 £ 4,000 Marketing manager Promotion to Clients 1 / 1 / 2014 1 / 31 / 2014 £ 0 Sales manager Promotion to Client Referrals 2 / 1 / 2014 2 / 28 / 2014 £ 0 Sales manager Develop Print Ad 12 / 1 / 2014 12 / 15 / 2014 £ 500 Marketing manager Run first print ads 2 / 1 / 2014 2 / 15 / 2014 £ 6,000 Marketing manager Totals £ 25,000 ` References List B plans.2013. Sample Business Plans. Retrieved December 10, 2013 from http://www.bplans.com/sample_business_plans.php#.UqaHC90WFkg Cohen, L 2002, 'Writing your business plan', Nature Biotechnology, 20, Supplement 6, pp. BE33-BE35 KEAT Partners. 2013. Retrieved December 10, 2013 from http://www.keatpartners.com.au/ Lange, J, Mollov, A, Pearlmutter, M, Singh, S, & Bygrave, W 2007, 'Pre-start-up formal business plans and post-start-up performance: A study of 116 new ventures', Venture Capital: An International Journal Of Entrepreneurial Finance, 9, 4, pp. 237-256. Palo Alto Software. 2013. Live plan. Retrieved December 10, 2013 from http://www.liveplan.com/features/samples_and_examples Small Business Administration. 2013. Create Your Business Plan. Retrieved December 10, 2013 from http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/how-write-business-plan Tusin, J 2006, 'Book Review: Writing and Presenting a Business Plan', Business Communication Quarterly, 69, 2, pp. 226-229. The Australian Government’s Principal Business Resource 2013. Retrieved December 10, 2013 from http://www.business.gov.au/Information/Pages/businessgovauplanningtemplates.aspx Wassinger, K, & Baxter, G 2011, 'Business plans in physiotherapy: a practical guide to writing a business plan for the non specialist', Physical Therapy Reviews, 16, 3, pp. 210-227. Read More