The Differentiating Factor of Pizza Heaven Company - Essay Example

? The of the business is Pizza Heaven. In the United s there are over 50,000 pizzerias nationwide. The differentiating factor that Pizza Heaven offers is the ability to cook pizza at a quarter of the time of regular pizza. The technique used to cook pizza faster is ovens that operate between 800 to 1,000 degrees Fahrenheit. The company will start off as a single restaurant, but the plan is to franchise the operation including the sales of mobile units. The product the company offers is popular due to the fact pizza is one of the favorite meals of American families. The structure of the business is very important towards the success of the organization. There are three types of business structures to choose from. The three business structures are sole proprietorship, partnership, and corporation. A sole proprietorship is a business owned by a single person. Most owners of sole proprietorships are also the managers of the business. One of the cons of sole proprietorships is that the owners are personally liable for the debt of the business. Two advantages of sole proprietorships are absolute control over decision making and the owner gets 100% of the profits. A partnership can be defined as the relationship existing between two or more persons who join to carry on a trade or business (Irs, 2012). Partnerships share in the profits and losses of a business based on the partnership agreement. Some of the advantages of partnerships are flexibility, greater human capital, and transferability. The third form of business is corporations. A corporation is a legal entity that exists separate from its owners. Three advantages of corporations are limited liability of stockholders, continuous life, and the ability to acquire capital. Some of the cons of corporations include separation of ownership and management, governmental regulations, and additional taxes. The business structure chosen for Pizza Heaven is corporation. The reason that the corporate status was chosen is because the company seeks to become a publicly traded corporation in order to raise the necessary capital to fulfill the company’s expansion plans. Pizza Heaven is a restaurant that sells neapolitan pizza. Neapolitan pizza is cooked in three minutes or less using brick ovens or high temperatures ovens. The business will start by opening a restaurant facility. After one year of operation the company will start selling franchises. The franchise will sell for under $100,000. Investors interested in a smaller investment will be able to buy mobile units franchises for $30,000. The business will sell personal pizzas, medium and large pizzas, calzones, frappes, mozzarella sticks, nachos, breadsticks, sodas and sandwiches. The company’s products are going to be priced to compete with the industry leaders. Accounting is going to play a very large role in the success of the company. The corporation seeks to have a franchising model. It is imperative to keep track of the sales of all the franchises due to the fact that the company will charge a 5% royalty on all sales. To attract investors the accounting books of the company must be up to date following the generally accepted accounting principles. Pizza Heaven must release its financial statements on a yearly basis. The four financial statements are the income statement, balance sheet, statement of return earnings, and statement of cash flow. Once the company becomes public it must register with the Securities and Exchange Commission (SEC). All companies register with the SEC are mandated to release trimester and yearly financial statements. Hiring the correct accounting staff is very important because accountants play a key role in the administration of a company. All members of the accounting staff must have a minimum education credential of a bachelor in business administration in accounting. Applicants that have an MBA degree or have a CPA license will be given preferential treatment in the recruiting process. The members of the accounting staff must have at least one year of experience working as an accountant. Once the employees are hired they will be offered an educational incentive of $7,500 a year towards obtaining a masters degree. The organization will also provide many opportunities for training and development. Before going into business a person should have a basic education in budgeting, internal controls, and cash management. If the business owner does not hold a bachelor degree in business administration he should take university courses in basic accounting. The internet can be used as a tool to learn about three important topics. A good investment for a business owner without an education in business is to enroll in a college and pursue at least an associate degree in business administration. Internal controls are very important to protect and safeguard the assets of a company. The asset that is targeted the most by thieves is cash. As a business owner I must establish protocols to protect the cash of the company. For instance the cash at the register must be taken out every four hours. The manager goes to the register to take out the cash. The cashier and manager will sign a document that states the precise amount of cash taken out of the register. The cash is then taken by the manager accompanied by the security guard to the safe located in his office. A courier picks up the cash at 3:00 P.M. to deposit the money to the bank prior to the closing time of 4:00 P.M. A second internal control mechanism that will be used to protect the business is the use of security cameras throughout the store. A third internal control mechanism is the segregation of duties between the accounting staff, treasurer, and cashiers. The managers of the corporation will use both qualitative and quantitative information to predict the outcomes of the business. A qualitative technique that can be used to predict the sales of the company is the Delphi method. The Delphi method uses a panel of expert to predict outcomes. A quantitative technique that can be used to predict the sales of the company is regression analysis. The use of pro-forma financial statements can be used to predict the financials of the company one to three years into the future. References Irs.gov (2012). Partnership. Internal Revenue Service. Retrieved July 31, 2012 from http://www.irs.gov/businesses/small/article/0,,id=98214,00.html Read More