Entrepreneurship and Effective Small Business Management - Example

Feasibility Analysis Name Institution Feasibility Analysis Executive Summary This paper presents a plan of opening an accounts firm in Broome, Western Australia. The firm will be identified as “Broome Financial Services” operating from Monday to Saturday from 8.00 am to 6.00 pm except on Saturdays, which the operations will begin at 9.00 am and end at 3.00 pm. Broome is a small town but endowed with numerous Chinese and Asian companies offering various services. Besides such companies, there are also Australian firms ranging from manufacturing to construction, which offers the best opportunity for the firm to invest. Besides, few accounting firms majorly offer the high-end services such as auditing, superannuation, financial planning, and information and communication technology. As a result, there is a gap in fulfilment of the required financial services. The research undertook an assessment of the market, product, technical and commercial feasibility of the area’s accounting industry to determine the opportunities worth investing in. moreover, the areas of focus included examination of the target market through segmentation, the existing companies, the market size, potential clients, and the major competitors. Besides the high end services offered by the competitors, the firm will offer tax filing, planning, and management consultant. Moreover, the achievement of the firm’s success is clear from the construction of the market, operations, the financial plans, and human resources, and projection of the prospects in few years to come. Introduction In a mid of continuity in the needs of high efficient financial services, most accounting firms are offering the high end services which create a gap in financial services especially for small businesses. As a result, the paper aims to undertake an assessment of feasibility of a new accounting firm in Broome. For successful examination of the industry, the paper analyzed various market driving factors. Considering the few auditing firms operating in Broome, it is clear that with the strategies in place, the firm will enjoy significant benefits from the provision of accounting services. Increased need for financial auditing will offer the opportunity for the firm to meet its objectives. The Industry The accounting firms continue to play important role in businesses through provision of financial services, planning, and consultant management. However, with such increments, provision of quality services is vital globally. Broome Financial Services will offer an array of services including the auditing and assurance services, preparation of tax and compliance work, consultation assistance, restricting, and other associated accounting related services. In the past five years, the accounting industry in Western Australia has been recovering from the post-recessionary downturn in the demand associated with falling number of business entities, weakening private investments, and shrinking corporate budgets. However, since 2013, there has been increment in revenue due to economic growth, increasing equity markets, and rising number of business ideas. Increment is demand is also causing the threat of new entrants. Current trends The accounting industry is becoming highly competitive with the current trends influencing the profession. The current trends affecting the industry include: 1. Increased services that focus on the clients: The current accounting firms are providing improved services, leveraging on the improved technology in automating the processes, and freeing the staff. Besides, there is provision of more personalized, strategic advice, and counsel to the potential customers. 2. Challenges associated with technological integration: The industry is making sound and strategic investment in technological services while ensuring smooth migration and integration path to emerging technologies. 3. Digital mobility opportunities: The current accounting firms aim to reduce the capital cost, increase productivity of employees and services through leveraging the mobile devices and digital platforms, and ensuring consolidation and integration of cloud based information repositories. 4. Succession planning and talent management: identification and management of talent; development of new skill sets, and management of retirement senior leaders are key areas of focus for the accounting firms. Future trends The recent global financial crisis is paving way for the evolution of the accounting industry. In a bid to address the concerns raised during the predicament, business entities restructured themselves to recover from weak performances. The future trends likely to shape the accounting industry include: 1. Cloud accounting: the cloud-based technology is gaining momentum in the financial world. Cloud accounting involves application of the software to access the data anywhere and anytime. 2. Social media strategy: The social media platforms are gaining popularity and accountants are using the platform in reaching the wider community, maintaining business partnerships, and attracting the potential clients. 3. Automation: the Internal Revenue Service (IRS) is ceasing to provide assistance services over the phones or in persons but shifting the services online. The shift free up the IRS employees and assist the accountants deal with tax filing issues easily. 4. Outsourcing: outsourcing is the biggest trend in the accounting industry. Irrespective of the firms’ size, the company often reaps from the benefits so long as the partners use similar tools. Outsourcing offers accessibility to experienced accountants providing compliance work according to clients’ standards. Key driving forces 1. Regulatory reforms: several regulations influence the operations of the businesses including carbon tax, which are beneficial to accounting firms. Other regulations include the Corporation Legislation (Audit Enhancement) Bill, which gives businesses the option of extending the audit partners to ensure quality audits. 2. Area of growth: tax consultancy offers the major driver of growth especially with the introduction of the carbon tax. Besides compliance, the accounting firms are better placed to offer value proposition and risk management as the restructured tax reporting is likely to affect reporting and protect profits and revenue. 3. Wages and profits: most firms expect low-pressure wages as there is no shortage of accountants. Moreover, the accounting firms are expanding their services with recruiters looking to hire beyond the traditional business graduates 4. Industry outlook: the revenue of the industry continues to grow strongly offering opportunities for small and large accounting firms. Although small firms have capacity of competing with large companies considering difficulties in attracting talent, they leverage such factors through pricing competitively about auditing work as the larger firms focus on lucrative advisory projects. Key success factors 1. Ability to manage effectively the risks: there is need for professional indemnity insurance covering any legal issue arising from the client 2. Membership of industry: having an association with specialists in legal and accounting firms is beneficial as it ensures provision of advice for broader range of services. 3. Establishment of the brand name: having a good name and brand is critical at it ensures good word of mouth recommendations. 4. Experienced work force: having balanced, qualified staff, and staff in training at various experience and qualification level are critical as they assist with wage costs. 5. Optimum capacity utilization: accounting firm needs to have high level of chargeable time for ensuring recovery of the costs and adequate returns. 6. Accessibility to the latest available and the most efficient technology and method: the firm needs to maintain a high level of technological sophistication that relates to accounting software programmes for high level of staff efficiency and productivity. 7. Maintenance of the excellent customer relations: maintenance of good communication with the potential clients and good client relationship at times is critical. 8. Accessibility to the niche market: the accounting firms need to develop few niche areas of specialization for efficient good flow of the recommendations and work from the clients. Read More