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Plan for New Accounting FirmChapter Writing

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¶ … accounting sphere and industry around the civilized world is large and it is only going to get larger. Due to things such as rising populations, increasingly complex personal and business tax laws, increasingly complex personal and business ethical standards and so forth and the like, well-trained and well-versed accountants are becoming more and more called upon as compared to the years of the past. While the opportunity is obviously there, it needs to be sought and garnered in the right way. While there are plenty of customers and opportunities out there, they need to be found and harnessed properly. This would mean doing the right thing the first time, every time. This would include from an accuracy standpoint as well as from an ethical standpoint. There must also be a strong and concise business plan that addresses all of the necessary elements. Those elements will be covered one-by-one in the body of this report.

Table of Contents

Executive Summary

Table of Contents

Business Plan

Conclusion

References

Financial Statements

Business Plan

Introduction

The author of this report has been asked to come up with a business plan. The structure of the business will be described as well as the definition of the product or service, the name of the business and a macro-level analysis of the business environment, market and industry in which the business will operate. There will also be a marketing plan, marketing strategy, organizational structure, operational plan, human resource strategy list and financial plan for the company. Finally, there will be recommendations that will highlight solutions relating to any problems that will or will probably come to pass given market conditions and trends. While accounting is a daunting industry for some, there is a lot of opportunity that exists out there when it comes to that field and this holds true even for small to medium-sized businesses.

Business Name & Industry Analysis

The structure of the business will be sole trader. This is referred to in some circles and other countries as sole proprietorship. The name of the company shall be Element Accounting. This will be a small accounting firm with a small team of accountants that service people when it comes to their taxes. People with individual or small businesses taxes will all be encouraged to use the services of the firm. The personnel and resource need for larger potential clients will preclude the company from servicing those clients. Even so, there are plenty of customers that will be available to serve and retain over time. The tax items that can or will be covered depending on the client and their needs will be personal income taxes and business taxes. Personal taxes are pretty self-explanatory but business taxes could run the gamut from business income tax, sales tax and other taxes that might be present depending on the locale of the business and where they happen to operate. Businesses that operate on a global scale have their own concerns and interests to deal with but the main focus will be on domestic taxes and compliance burdens (Australia, 2016).

The accounting field is robust and it is only getting larger. The amount of global business and even personal activity on the part of regular taxpayers often calls for accountants that are well-trained and versed in things that people that do their own taxes would know little to nothing about. Businesses in particular are under heavier scrutiny when it comes to expenditures, tax loopholes, tax credits and so forth. Even things that are technically legal can be seen as ethically dubious if they are presented or reported in the wrong way. This is very important to focus on from an industry and trend standpoint because word of mouth and reputation are huge when it comes to operating a small to medium-sized accounting firm. This holds true when the gossip and word of mouth is good as well as when it is bad (Boman, 2016).

Marketing Plan

As is requested by the assignment, there will be a heavy use of Porter's Five Forces when it comes to this marketing plan. Indeed, those five forces are supplier power, buyer power, competitive rivalry, threat of substitution and threat of new entry. Some of those forces, but not all of them, will be of heavy focus when it comes to the marketing mix for an accounting firm. Supplier power is not really an issue with accounting firms since the "supplies" that accountants use is rather mundane. Indeed, accountants are firmly within the knowledge sector. They are not unlike lawyers and so forth in this regard. It is not the medium and communication methods that mark a good accountant. Rather, it is the knowledge (and that knowledge being employed) that makes a good accountant. The other de facto non-factor when it comes to the accounting field is threat of substitution. While there are some taxpayers that feel that they could probably do their taxes themselves but would rather have a professional do it, there are many, many others that are completely daunted by taxes and/or fear doing it wrong. As such, substitution is not all that much of an issue. The only real caveat is that people doing taxes come in different forms and price points and people make a choice based on price and a number of factors (Mind Tools, 2016).

The other three of the Porter Forces are very important to accountants. Buyer power is huge because buyers really want a good accountant and they latch onto one when they find one. However, the same thing is true in reverse. If a client has a bad experience, they will not fear bolting for that reason alone and there are plenty of other fish in the sea, so to speak. Along that same line of thought would be competitive rivalry. While there is a palpable amount of decorum and such when it comes accountants, they do not fear taking business from other accountants when they can legally and ethically do so. Finally, there is the threat of new entry. While any accountant wanting to enter the market has to get trained and certified for whatever they will be working with (not to mention college education), getting into the market is not terribly hard to do. Someone with the proper computer, office supplies and training can be an accountant. There is a lot more than that, of course, but the bare minimum "bar" is not all that high (IAB, 2016).

Marketing Mix

There was a time where the printed word such as newspapers and magazines were the normal order of communication and advertising but that has quickly faded away and evolved in major ways. While printed mediums are not entirely defunct, they are much less prominent and effective than they were in terms of getting customers. Technophobes, usually among the older and more mature sets in the country, will be reachable through newspapers and television ads. However, much of the rest of the people can be reached through online mediums such as website ads, social media and so forth. Generally, there will be a higher focus on online mediums but the more traditional sources of advertising will not be forgotten since there are still people that make heavy use of them and they have tax needs as well. Key customer types will be individuals, married couples, small businesses and medium-sized businesses. The last two of that list will be a mix of sole traders, partnerships and smaller corporations (Bennett, 2016).

SWOT Analysis

Strengths

Easy market entry

Many potential customers

Mostly online advertising

Weaknesses

New business to the marketplace

No established reputation

No established word of mouth

Opportunities

Increased business as years go on Referrals can be major way to gain business

Advertising needs/costs will go down as referrals grow

Threats

Many established firms, including small ones

Potential for mistakes with customer tax filings

Heavy ethical and legal scrutiny of tax filings

Organizational Structure & Plan

In the beginning, there will be a Chief Executive Officer (CEO), business office manager and five accountants. The CEO will make all of the important decisions and business plans including any meetings with advertiser sellers and such. The office manager will handle all of the office's business including HR functions and other non-accounting tasks that are needed such as ordering supplies and the like. The Chief Executive Officer will be the one key decision maker at first but that will obviously evolve when the firm grows.

As far as information systems go, there will be a file server and virtual private network established. All customer and corporate files will be stored on that server rather than the workstations of any of the employees. The virtual private network will allow access to those files even if an accountant is in the field. The office itself will be fairly simple. There will be ten offices in the initial office space. This will give an office to everyone that works there and allows for two spares. There will also be… [END OF PREVIEW]

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