Future Plan for Tax Management Services for Small Organizations and Households

This report discusses a future plan for tax management services for small organizations and households. It covers key dimensions such as offered services, customers, competitors, projected profit and loss accounts, cash flow statement, and more. The report concludes that the business idea is viable and would generate good profits for the entity.

BM564 ENTERPRISE AND
ENTREPRENEURSHIP
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EXECUTIVE SUMMARY
The report is aimed to broadly discuss a future plan, and with this regard all key
dimensions such as offered services, customers, competitors and projected profit and loss
accounts, cash flow statement too. The report examined feasibility of the idea, and presented all
key dimension.
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TABLE OF CONTENT
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
Future business:...........................................................................................................................4
Customers:...................................................................................................................................4
Competitors:................................................................................................................................5
Skills analysis:.............................................................................................................................5
Projected 2 years’ profit and loss accounts:................................................................................6
Projected 2 years’ cash flow forecasting:....................................................................................7
BEP:.............................................................................................................................................8
Sources of funding:......................................................................................................................9
Plan for obtaining resources:.......................................................................................................9
MIS:...........................................................................................................................................10
Vision of the business:...............................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
Entrepreneurship is a process or set of activities carried out in order to set up a business and
making money addressing organisational risks (McKenzie and Sansone, 2019) The report would
be presenting a new business idea for the future, and some sort of aspects such as it viability,
customers, products and services, competition etc. at the end of the report projected income and
expenditure statement for the entity would be fabricated.
MAIN BODY
Future business:
the organization will be offering specific type of financial services such as tax management and
planning for small organisations and some households too.
It does give taxation related financial services since in the nation there still a huge scope for the
business since a vast majority is still not taking advantage of available tax relief so the entity will
be helping them.
As it has been seen that in the market people are less likely to have such services, our
organisation is bringing an innovative idea and will be providing tax management related
services to even such small household who are paying insignificant amount (Barrow, Barrow and
Brown, 2018)
The business will be generated Patent since the idea is lying in the jurisdiction of patent laws.
Here customized tax panning facilities are being offered which is quite new so there is strong
need to protect the idea to get copied. So since the business is coming with new idea of
customized tax planning, it is not being practised by others so there is need to get the patent
generated.
Customers:
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The entity will be having some small and medium sized entities as their customers along with
some households. It would be B2C and B2B business.
So the end users will be both people with income lying in tax jurisdiction and SMEs who are
getting operated in the nation, they may buy these services.
One of the biggest need of people or any entity is to save money and the service will extend them
better tax planning guidance.
USP of the entity is “we are helping to save your income with our tax planning efforts”.
With this regard a well-structured research has been carried out and it was found that there are
more than 56% people are paying tax so a big market is available for the entity.
Competitors:
In the market a range of entities are rendering such services not to SMEs in broader way yet they
may offer tough challenges to our organization. Big 4, organisations are having a huge share of
the market. Such as Grant Thornton PwC, Deloittee etc. They are accounting around 85% of the
market share (Inkon, 2019)
Since the services of these entities are very expensive and on the other hands they are mainly
targeting some giant organization so there is not much preference to the SMEs and small
households, with this regard our organization will aid them to hike their savings so it would
make them buy our services rather than our competitors.
Skills analysis:
These skills we have to penetrate the market-
 Good understanding of taxation laws of UK.
 Better ability to communicate with the clients and getting them convinced about our
services.
 Knowledge of finance management and understanding various corporate laws too.
Skills are needed-
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 There is need to understand the use of modern tools and technology in order to hike
operational ability of organization.
 Need to enhance marketing efforts in order to grab attention of potential customers.
Skill gaps addressed-
 For enhancing technological knowledge will get proper training so can hike ability to use
it.
 To enhance marketing efforts may go with telecommunication organization to market our
idea.
Projected 2 years’ profit and loss accounts:
particulars Amount for the
year 2023
(figures are in
£)
Amount for
the year 2024
(figures are in
£)
To rent
To salary
To marketing expenditures
To advertisement
To bank charges
To depreciation
To loss on sale of assets
To miscellaneous charges
Total expenditures of the organisation
To tax management charges
To income from taxation consultancy
To income from tax planning commission
Total revenue for the year
60000
150000
75000
50000
125000
75000
32000
156000
723000
560000
250000
180000
990000
60000
175000
100000
56000
150000
78000
25000
200000
844000
690000
300000
250000
1240000
Net projected profit for the year 267000 £ 396000 £
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So form the projected profit and loss accounts of the organization it can be concluded that the
future plan of the business is very much viable and would be reverting good amount of profit to
the entity (McCready and Molls, 2018)
Projected 2 years’ cash flow forecasting:
2023 2024
Cash flows from operating activities for the
year
Net Income form business
Adjustments pertaining to operating activities-
Depreciation and amortization
Loss on sale of equipment
Changes in current assets and liabilities-
Increase in current assets
Decrease in current liabilities
Net cash provided by operating activities
Cash flows from investing activities
Capital expenditures of the organisation
Lease expenditures for the year
Amount generated from sale of equipment
Net cash used for investing activities
Cash flows from financing activities
Amount generated from issuing debentures
Dividends paid to stockholders
Net cash provided by financing activities
Net increase in cash during the year
267000
75000
32000
-5200
20000
388800
-
-30000
-
-30000
900000
-
900000
396000
78000
25000
-6000
25000
518000
-
-25000
-
-25000
-
-
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Cash at the beginning of the year
Cash at the end of the year
190000
1448800
1448800
1941800
So from the projected cash flow statements for two consecutive years it can be said that the
entity is having good control over its cash flows, and the business idea is viable since cash flows
are getting inclined to the organization (Sintha, 2020)
BEP:
BEP refers to the point of sales where business experiences stagnant position, it generates no
profit, no loss.
The entity is having a new and drastic idea so the BEP would be very lower for it. Even as per
the proposed profit and loss accounts it can be deciphered that it would be making profits even in
the first year of its operations.
BEP for the entity is very low it is around £500000, which is cost for the year and if the company
generates revenues more than five lacs then would be in profit so it is break-even point for the
first year (Kudryashova, Lazareva, 2020)
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Going with the same trend then in the second year the organization would be earning more
amount due to better stability and wider diaspora.
Sources of funding:
In initial phase the funds will generated form self-investments, at the same time around 40% of
the needed funds would be obtained from self-savings in order to avoid pressure of paying any
return from the beginning. The remaining amount will be arranged form bank loan and by
publishing debentures
At the same time a part of funds would be arranged form lease which is one of the most often
source at this point of time. On the other hands would also issue debentures which is considered
one of the cheapest source of funding.
Plan for obtaining resources:
For starting the business there is need to obtain both tangible and non-tangible resources. With
this respect, the entity is having a well-articulated plan where feasibility, risk, potential troubles
all factors would be taken into consideration.
Computers, furniture, and some other tangible assets are to be brought second hand and
remaining things like software, stationary have to be purchased new.
If talk about intangible resources then will be generating Patent, and there is no need now to buy
goodwill, it will be contemplated after first year of the commencement. After 1st year may think
about collaboration to have goodwill.
For the business the initial cost is around £1500000, the breakdown of the start-up cost is as-
Particulars amount
Charges for commencement certificate 50000
Patent fees 75000
Expenses for purchasing computer, furniture 555000
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Preliminary expenses 25000
Marketing charges 75000
Market research expenses 100000
Expenditure for installing MIS 250000
Purchasing new tools and software 165000
Business commencement related some other charges 15000
Cash at hand 190000
Total cost 1500000
MIS:
MIS refers to Management Information system; in an organisation it is essential to heave strong
internal control which is only possible with strong management system. It is a tax management
organization so there is rigours need to have it.
The entity will be using Microsoft Dynamics 365, this is a specific tool which is used to manage
accounting and other organisational information (Onikiienko, Polishchuk, Ivashchenko, 2021)
The data books are to be managed online in order to make it easy to get operated. At the same
time some other smart tools would be used so can make MIS efficient and suitable for the entity.
Internal audit system is to be incorporated in order to manage internal control, with this regard an
independent team of internal audit would be fabricated and they directly give their reports to the
upper management.
Vision of the business:
The vision of the business is to be number one in the nation and providing its tax management
services to the SMEs and households.
It is striving to provide such services to everyone who is not obtaining to consider its tax amount
insignificant.
The entity also wants to expand its operations and now it is restricted up to just tax management
services latter on would be exploring new realms of financial services.
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CONCLUSION
From the report above it can be concluded that the business idea is very much viable and it
would make it thrived. In the report various aspects such as service had to be offered, customers,
competitors etc. were discussed, at the end of the report views on its income and cash flows had
been presented by projected statements.
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REFERENCES
Books and Journals-
Barrow, C., Barrow, P. and Brown, R., 2018. The Business Plan Workbook: A Step-By-Step
Guide to Creating and Developing a Successful Business. Kogan Page Publishers.
Inkon, K., 2019. A cross-sectional study on the relationship between business plan, entrepreneur
type, development stage and profitability of US SMEs. Academy of Entrepreneurship
Journal. 25(1). pp.1-21.
Kudryashova, Y. N., Lazareva, 2020. The organization of management accounting as a
mechanism to improve the efficiency of agricultural enterprises. In BIO Web of
Conferences (Vol. 17, p. 00028). EDP Sciences.
McCready, K. and Molls, E., 2018. Developing a business plan for a library publishing
program. Publications. 6(4). p.42.
McKenzie, D. and Sansone, D., 2019. Predicting entrepreneurial success is hard: Evidence from
a business plan competition in Nigeria. Journal of Development Economics, 141.
p.102369.
Onikiienko, S., Polishchuk, Y., Ivashchenko, A., 2021. Prior credit assessment of long-term
SME projects with non-standard cash flows. Banks and Bank Systems, 16(2). pp.148-
158.
Sintha, L., 2020. Importance of Break-Even Analysis for the Micro, Small and Medium
Enterprises. International Journal of Research-Granthaalayah. 8(6).
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