Business Idea for an Accounting Firm: Viability, Competitors, and Financial Projections

This report presents a viable business idea for an accounting firm, including market analysis, competitors, skills analysis, projected profit and loss, cash flow forecasting, and sources of funding. The report also outlines the organization and management information system and the vision for the business.

BM564 ENTERPRISE
AND
ENTREPRENEURSHIP

TABLE OF CONTENT
EXECUTIVE SUMMARY.............................................................................................................5
INTRODUCTION...........................................................................................................................6
MAIN BODY...................................................................................................................................6
Future business.............................................................................................................................6
Customers....................................................................................................................................6
Competitors..................................................................................................................................7
Skills analysis...............................................................................................................................7
Projected 2-year Profit and loss accounts....................................................................................7
Projected 2 years’ cash flow forecasting including break-even-.................................................9
Sources of funding.....................................................................................................................11
Plan for obtaining resources.......................................................................................................11
Organization and management information system..................................................................12
Vision for the business...............................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

EXECUTIVE SUMMARY
The report is aimed to present a business idea and it various aspects such as market,
customers, competitors. With this regard a well-articulated study has been carried out. It revealed
that the business idea is very much viable and having good ability to offer higher profits to the
organization.

INTRODUCTION
Entrepreneurship is a venture where a person or an entity takes some steps in order to
flourish its business idea (Saragih and Nawawi, 2022) The report will be discussing future
business idea, and some other aspects such as customers, competitors, skills analysis, projected
profit and loss and cash flow statements, sources of funding etc. at the end of the report the
vision about the business plan will be shared.
MAIN BODY
Future business
The business would be an accounting firm and will be providing a range of accounting
services. There will be number of accounting services, which are to be offered to the customers.
The services such as security of regular pay check, employer provided benefits, such as social
security and medication plan.
Employees are supposed to complete individual task.
The business idea is bringing a new strategy to the market. For small and medium-sized
organization it is very expensive but our business idea will put them on ease.
The business is intended to provide them security of their various security related pays.
For the business idea would get patent, it is for 20 years. The organization may also have
international patent but need to apply under the Patent Cooperation Treaty (PCT) (Birkholz,
2021)
Customers
The entity is to be providing personalized, dependable, and merit services so there would be
good size of customers.
Mainly small and medium-sized organization will acquire its services, on the other hands some
households who are having security deductions from salary.
Such customers are our and end users too.
There are some organization such as government agencies, colleges and universities, retail
stores, hospitality businesses.
They may get the accounting services of our organization. So both B2B and B2C are targeted.
Individuals who are having Medicare plans would be one among the biggest constellation of our
customers.
USP is “We are here to give personalized accounting services to you” (Jeannet, Volery, 2021)

The services will meet personalized accounting services need of customers.
A broad research was carried out practising a set of actions.
The business is having unique idea so it would be having strong position in the market.
Competitors
The accounting firms specifically some innovative firms are our competitors.
Firms like London chartered accountants, PwC, EY, BDO, RSM, Grant Thornton etc.
All Big Four firms are having 84.3% market share in UK (Naim, 2022)
And rest is in the hands of other firms.
The customers are supposed to buy our services since it is available on cheaper prices and these
all firms are not providing such innovative and personalized services.
The market is offering good opportunity for such organization which are providing personalized
services to their clients.
So accounting firm is having tough competition in the market.
Skills analysis
Possessed skills-
 Good ability to work as a team member.
 Ability to give strong leadership.
 Understanding of accounting.
 Knowledge of market trends.
These skills are essential to take the business ahead.
Needed skills-
 Understanding of business environment to deeper level.
 Ability to use modern accounting tools and technologies.
 Appropriate oral communication etc.
Plan to address skill gap-
 To advance understanding of business environment will enhance my reading habits.
 Will join accounting training course to understand modern tools and techniques.
 For improving oral communication would join seminars and online course of soft skills.
Projected 2-year Profit and loss accounts
Projected profit and loss account for the year 2023-
particulars amount total

To salaries
To rent
To advertising
To lease charges
To bank charges
To stationary
To refreshment charges
To depreciation
Total expenditures
To accounting fee
To accounting consultancy fee
To grant from governments
Total revenue
Net Income for the year
200000
150000
50000
25000
15000
35000
12000
22000
350000
475000
35000
509000
860000
351000
Projected profit and loss account for the year
particulars Amount (in £) total

To salaries
To rent
To advertising
To lease charges
To bank charges
To stationary
To refreshment charges
To depreciation
Total expenditures
To accounting fee
To accounting consultancy fee
To grant from governments
Total revenue
Net profit for the year
275000
160000
60000
25000
25000
55000
15000
17000
622000
525000
Nil
632000
1147000
515000
Projected 2 years’ cash flow forecasting including break-even-
Cash flow statement for the year 2023 and 2024-
2023 2024
Cash flows from operating activities
Net Income
Adjustments with respect to operating
activities-
Depreciation and amortization
Loss on sale of equipment
Changes in current assets and liabilities-
Increase in receivables
Decrease in prepaid expenses
Net cash provided by operating activities
351000
22000
Nil
-5000
15000
383000
515000
17000
Nil
-4000
20000
548000

Cash flows from investing activities
Capital expenditures
Lease expenditures
Proceeds from sale of equipment’s
Net cash used for investing activities
Cash flows from financing activities
Proceeds from issuing debt
Dividends paid
Net cash provided by financing activities
Net increase in cash during the year
Cash at the beginning of the year
Cash at the end of the year
-25000
-25000
-
-
-
368000
142000
510000
-25000
-25000
150000
-25000
125000
648000
510000
1158000
BEP refers to the point of sales where the entity does not make any profit and even not generate
loss.

The accounting firm is very new in the market yet it has been seen that the entity is making good
profit even in the beginning year (Alkahtani, 2022)
The organization is having its BEP point at very lower level. It shows that it is having good
ability of making money in the market.
Sources of funding
As it is decided that it would be an accounting firm so the primary source of funding would be
venture-ship.
Personal funds will be used for the ventures where the savings are to be used.
Bootstrapping is one of such way for funding the entity. Bootstrapping refers to the method of
funding where external sources are avoided.
For instance- buying second hand equipment’s rather than new, lease equipment’s, minimizing
personal expenses etc.
There are some other sources too, such as equity, debt.
In initial phase it would not be good to have debt so would go for self-funding.
In future debt may also be taken but it depends on the prevailing circumstances.
Plan for obtaining resources
Tangible resources such as cash, land, machinery, building etc.
The organization will be purchasing some of it new and rest of second hand in order to save
money.
The cash arrangement has to be done by self-contribution of all ventures.
There is need of computers, air conditioners, coolers, fan, some other furniture, so in initial phase
just 50% of the need are to be purchased (Persson, 2019)
Stationary items are brought new, form the market.
After 1-year rest of tangible resources will get acquired.
Non tangible assets consist patent, goodwill brand recognition etc.
Patent is needed to be generated immediately since the business idea is unique and for securing
IPR so there cannot be delay.
At once if the business gets itself stable in the market then after 2 years may go for generating its
trademark too.
There is no need to buy goodwill now but considering tough competition may buy in the future.
Breakdown of start-up costs-

The start-up cost of the entity is £10,00,000
components amount
Registration charges 8000
Patent fee 5000
Digital marketing expenses for one year 50000
Purchasing tangible resources 400000
Intangible resources cost (except patent fee) 50000
Research expenses of business idea 50000
Expenses for installing technology of MIS 200000
Conventional marketing expenses 35000
Cash at hand 142000
Total cost 1000000
Organization and management information system
It is an accounting firm so the nature of organization surges demand of installing strong MIS.
The organization would be having a well suitable MIS.
It is an accounting firm so there is huge need to protect data of clients.
Here some smart tools such as Microsoft dynamics are supposed to be used.
All aspects as data gathering, analysing data, reporting will be carried out using best and
protective system.
Microsoft Dynamics 365 is one of such tool which can be used here (Čech and Šofranko, 2018)
Here both customer relationship management and enterprise resource planning are being
considered.
The entity will be ensuring that the books of accounts must be audited on time and with this
regard internal audit mechanism will also be fabricated in order to assist statutory audit.
The management will be responsible for all the higher level decision and will also be fabricating
their reports for every month.

Vision for the business
The vision of accounting firm it to be the most respected firm in the market.
It aims to fabricate long and strong standing relationship with the clients.
With this regard, personalized, dependable and merit services shall be provided to them.
The entity is having vision to get the customers satisfied in order to hike its sales and at the same
time escalate market share.
The market is offering good scope to such accounting services.
CONCLUSION
Form the report above it can be concluded that entrepreneurship is a viable process of
taking venture. In the report a business idea has been presented considering various elements
such as products or services, customers, competitions, needed skills, sources of funding etc.
At the end of the report project final statements are also drafted for two years.

REFERENCES
Books and Journals-
Alkahtani, M., 2022. Supply Chain Management Optimization and Prediction Model Based on
Projected Stochastic Gradient. Sustainability. 14(6). p.3486.
Birkholz, J., 2021. Do not judge a business idea by its cover: The relation between topics in
business ideas and incorporation probability. Bremen Papers on Economics &
Innovation.
Čech, J. and Šofranko, M., 2018. Economic projection and evaluation of mining venture.
Jeannet, J. P., Volery, T., 2021. Sourcing the Defining Business Idea. In Masterpieces of Swiss
Entrepreneurship (pp. 195-209). Springer, Cham.
Naim, A., 2022. ROLE OF ACCOUNTING AND FINANCE IN PERFORMANCE
APPRAISAL. American Journal of Sociology, Economics and Tourism. 1. pp.1-17.
Persson, M. E., 2019. Implications of cash flow accounting for management. In Harold Cecil
Edey: A Collection of Unpublished Material from a 20th Century Accounting Reformer.
Emerald Publishing Limited.
Saragih, H. S. and Nawawi, Z. M., 2022. NEW BUSINESS IDEA IN THE NEW NORMAL
TIME. Journal Of Social Research. 1(2). pp.101-109.