Accounting Capstone Project: Nova Eye Care Business Plan Analysis

This accounting capstone project presents a comprehensive business plan for Nova Eye Care, an optometry practice proposed for Merrylands, Sydney. The plan includes an executive summary, outlining the business's mission to provide high-quality eye care services. It details the business idea, product descriptions (eye examinations, medical treatments, and laser treatments), and an industry analysis of the Australian eye care market, including market trends, growth opportunities, and the competitive landscape. The plan outlines the marketing strategy, competitive advantages, and a SWOT analysis. It also covers operational aspects like organizational structure, HR policies, and risk assessment. Crucially, the plan incorporates a detailed financial plan, including key performance indicators, start-up capital expenditure, sales forecasts, profit and loss accounts, cash flow forecasts, balance sheets, and a break-even analysis, to assess the financial viability of the proposed business. References and an appendix with ratio analysis are also included.

Running head: ACCOUNTING CAPSTONE
Accounting Capstone
Name of the Student
Name of the University
Authors Note
Course ID

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Executive summary:
Nova Eye Care is a solution for all sorts of eye related problems. The business would be
providing the eye care service delivery in Sydney. The mission of Nova Eye Care is to create
the first class eye care clinic that would take care of the highly placed customers and lowly
placed clients until and unless they can afford the service of Nova Eye Care. An all-inclusive
eye examination would be carried out by the Optometrist or by the ophthalmologist, however
it would not be limited to lensometry, visually acuity testing, refraction to ascertain the
eyeglass prescription. The business would provide optometric service to their patients.
The products and services includes the eye examinations, medical treatment of eye diseases
and laser treatment. The services would also include the muscle and pupil assessment and
microscopic assessment of the interior portion of the eyes. Nova Eye Care would place its
emphasis on the market strategy by building the market share amid the outcomes – conscious
eye care patients. To maintain the competitive strategy goals Nova Eye Care would remain
dependent on the supremacy of its business technology so that it can thrive in the competitive
market. As the competitive strategy goal the business would source the external aids,
prevailing laser refractive surgery and alternative non-laser surgical process.
Nova Eye Care would be following the line organizational structure as the owner considers
this organizational structure most useful for the business. The senior manager would be at the
top while people that are responsible for other areas and teams of people that work in every
department. Nova Eye Care sales strategy include the investment in its technology by
purchasing the laser that would be used by the business in its process. Once the investment
has been made the sales effort needed would heavily rely on the refractive surgery. Nova Eye
Care aims to raise the capital through owner’s contribution and bank funding. Funds obtained
from the bank would be used for the business operations.

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Table of Contents
Business proposal, research and analysis:..................................................................................5
Vision:........................................................................................................................................5
Mission Statement:.................................................................................................................5
Description of Idea/Product:..................................................................................................5
Product description and features:...........................................................................................6
Industry Analysis:......................................................................................................................6
Market trends and growth Opportunity:.................................................................................6
Economic and Regulatory Environment:...............................................................................8
Competitor and market Analysis – Target Market, competitors:...............................................8
Target market segment strategy:............................................................................................8
Competitors:...........................................................................................................................9
Competitive strategy goals:....................................................................................................9
Competitive advantage:..........................................................................................................9
Market research:...................................................................................................................10
Marketing Strategy:..................................................................................................................11
Advantage to customers:......................................................................................................11
Business Core Values:..........................................................................................................11
Broader Business Objectives:..............................................................................................11
Product features and customer services:..............................................................................12
Pricing strategy:...................................................................................................................12

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SWOT Analysis:..................................................................................................................12
Advertising and promotion:.................................................................................................13
Operations:...............................................................................................................................13
Organization structure and personnel summary:..................................................................13
HR Policies:.........................................................................................................................15
Staff training and presentation:............................................................................................16
Process and activity analysis:...............................................................................................17
Accounting system:..............................................................................................................17
Advertisement and Promotion to be Undertaken and its costs:...........................................17
Health and Safety regulations:.............................................................................................18
Internal control Systems:......................................................................................................18
Risk Assessment:.................................................................................................................19
Administration..........................................................................................................................20
Business Location:...............................................................................................................20
Staff roles and responsibilities:............................................................................................20
Staff training and Presentation:............................................................................................21
Staff Regulations and policies:.............................................................................................22
Advertisement and Promotion:............................................................................................22
Marketing strategy:..............................................................................................................23
Accounting Systems:............................................................................................................23
Management –..........................................................................................................................24

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Business name registration:..................................................................................................24
Management Hierarchy and Lines of Reporting:.................................................................24
The strategic direction and growth initiatives:.....................................................................24
Financial Plan...........................................................................................................................25
Key Performance Indicators:................................................................................................25
Important Assumptions:.......................................................................................................26
Start-Up Capital Expenditure:..............................................................................................26
Sales Forecast:......................................................................................................................27
Profit and Loss Account:......................................................................................................27
Cash Flow Forecast:.............................................................................................................28
Balance Sheet:......................................................................................................................29
Break-Even Analysis:...........................................................................................................31
What if Analysis:..................................................................................................................31
References:...............................................................................................................................33
Appendix:.................................................................................................................................38
Ratio Analysis:.....................................................................................................................38

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Business proposal, research and analysis:
Vision:
Nova Eye Care vision is to be the number one choice when the situation for eye care
service delivery in Sydney. The vision of Nova Eye Care is to offer the field of
ophthalmology with the ground-breaking projects that would facilitate the optometric practice
and conditions.
Mission Statement:
The mission of Nova Eye Care is to create the first class eye care clinic that would
take care of the highly placed customers and ordinary placed clients until and unless they can
afford the service of Nova Eye Care. The mission of Nova Eye Care is to be the leaders in the
optometrist industry in Sydney and in Australia as a whole.
Description of Idea/Product:
The objective of the Nova Eye Care is to offer their customers with the overall eye
care for the customer that does not has insurance or the liability of paying the medical care.
Patients at Nova Eye Care would receive the below stated following services;
a. An all-inclusive eye examination would be carried out by the Optometrist or by the
ophthalmologist, however it would not be limited to lensometry, visually acuity
testing, refraction to ascertain the eyeglass prescription.
b. The services would also include the muscle and pupil assessment and microscopic
assessment of the interior portion of the eyes.
c. Nova Eye Care includes retinal examination, tonometry and ancillary test as directed
by the consequence of individual patient check-up.
d. When any medical conditions are identified, a patient would be receiving the
continuous support and eye surgery as and when needed.

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Product description and features:
The business would provide optometric service to their patients. The products and
services includes the eye examinations, medical treatment of eye diseases and laser treatment.
The services would also include the muscle and pupil assessment and microscopic assessment
of the interior portion of the eyes. The business would also prescribe and sell eyeglasses and
contact lenses by conducting eye examination of the potential clients.
The customer satisfaction survey suggests that buying patterns involves substantial
and infrequent purchase that has excellent manufacturing support. The survey reveals that the
purchase patterns of consumers is mainly based on opting for services that provide value
based returns.
Industry Analysis:
Market trends and growth Opportunity:
The industry of eye care in Australia has largely obtained benefits from the favourable
government policies, favourable demographical trends, significant advancement in
technologies and constant awareness of eye hygiene (Dees, 2017). On the other hand,
healthier eye care has to some extent suppressed the income that is generated from the
industry. Therefore, limited accessibility of patients for eye care as nearly one-half of the
population in Australia only covers the emergency eye care for Medicaid patients has resulted
some eye care clinics to reduce their price and cut down their profitability.
The eye care industry has of late recently started consolidating because of the pressure
of the healthcare reformation (Kirzner, 2015). The truth lies in the demand for eye care
services which has over the years increased as reformation in the eye care legislation has
widened the coverage of insurance and the declining rate of employment has increased the

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disposable income. Being the investor in the Optometrists cum eye care industry and also to
maintain the advantage position in the competitive industry, the business would source the
highly skilled and specialized eye care professionals.
The most important thing regarding this industry is the cost of labour which is very
high. Nevertheless, private hospital has also faced the shortage of nurse and optometrist that
have struggled to employ new skilled personnel (Hitt & Duane Ireland, 2017). Over the last
five years the profitability of this industry has increased because of the increase in the service
costs. With no doubt, the industry would continue to expand and turn out to be highly
profitable due to the increase in eye hygiene awareness among the consumers.
Essentially the possible market is nearly similar to the probable market for Nova Eye
Care. According to the market survey there is a base of wider market potential for the laser
refractive surgery industry (Kuratko, 2016). It is projected that 54% of the Australian
population are eligible for refractive correction by using the latest technologies or those that
are in the near horizon. The primary research is conducted by contacting nine leading
ophthalmological medical institutions in Australia out of which seven have expressed their
interest in contributing to the research of collaboration and carrying out the NICS once the
information is available (Parker, 2018).
The industry of optometry practice is estimated to offer revenues of greater than $10
billion annually and provide employment to more than 85000 people. It is estimated that
there are around 20,000 private optometry practice in Australia (Kazanjian et al., 2017). The
industry provides the opportunity for growth than the general economy as majority of the
baby boomers would need higher level of eye care in the coming ten to twenty years.

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Economic and Regulatory Environment:
This section would assess the detailed economic climate, the optometric industry,
profiles of customers and competition that is based by the business as Nova Eye Care
progress through its operations (Storey, 2016). Presently the Australian economic condition is
in booming phase. Although the Australian economy has hit breaks in the third quarter due to
the falling prices, narrowing financing conditions and sluggish growth in wages as marginally
slowed the economy. The slowdown of the economy has also significantly affected the sales
of real estate that has ceased to historical lows.
There are several economists that have predicted the slower economy would attain
growth in the fourth quarter and at those point the economy would commence the prolonged
period of recovery (Cooper & Folta, 2017). Nevertheless, the optometric practice would
operate with greater economic stability as people would continue to obtain care in spite of the
slowing change in the general economy. Considering the regulatory environment Nova Eye
Care would be the licensed optician that would be registered under the college of opticians.
Competitor and market Analysis – Target Market, competitors:
Target market segment strategy:
Nova Eye Care would place its emphasis on the market strategy by building the market
share amid the outcomes – conscious eye care patients. For this type of customer segments,
Nova Eye Care would provide a branded technology which would assist the patients to obtain
increased visual acuity with reduced risk of complications (Burns, 2016). The market
research represents that the customer segments is less sensitive towards price and would pay
for the premium prices that is charged by the ophthalmologists that would use the Nova Eye
Care technology. The market requirements of the target segments are very straight forward
where clients permanently want to improve their vision by using the process with the lowest

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conceivable risks of problems (Burns & Dewhurst, 2016). The customers of Nova Eye Care
can be categorized in the following manner;
a. The entire residents inside the area where the eye clinic of Nova Eye Care would be
located.
b. Corporate organization namely the insurance companies, banks, oil and gas
companies and manufacturing firms.
c. Schools and health management organizations
Competitors:
Nova Eye Care faces competition from Lasic Laser, Kera Visions, TLC Laser Eye
Centers and Elena Pedro Eye Care Clinic. Nova Eye Care faces vicious price wars that are
deeply cutting down the profit margins.
Competitive strategy goals:
To maintain the competitive strategy goals Nova Eye Care would remain dependent
on the supremacy of its business technology so that it can thrive in the competitive market.
As the competitive strategy goal the business would source the external aids, prevailing laser
refractive surgery and alternative non-laser surgical process (Barringer, 2015). The business
anticipates high competition from the Lasic laser and Kera Visisions. Much like these
competitors have accepted the process of laser surgery, Nova Eye Care would invest in the
laser refractive surgery centres that would presumably invest in the ophthalmologists carrying
on refractive surgery.
Competitive advantage:
Beside from the competitors that is existent among the numerous eye clinics, the
business is also competing against the healthcare service providers namely hospitals, health
care centres and community clinics to offer eye care services (Meyer et al., 2017). In order to

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be highly competitive in this industry a business must be able to deliver the regular eye care
service and must be able to satisfy the anticipation of the patients at each time.
The eye care clinic of Nova Eye Care is centrally positioned and visible as the
business has sufficient optometric practicing personnel. As stated earlier, Nova Eye Care
system would provide a refractive correction to its customers that would hold significant
advantage to the business over the presently available technologies (Schaper et al., 2014).
The present process requires the obliteration of the portion of epithelium of cornea that would
place the eye in danger of several complications where the overall rate of success is
approximately 10%. Nova Eye Care technology removes the need for a cut and would make
the procedure safer as well as more attractive for the patients that has refractive errors
(Eckhardt et al., 2018). The competitive advantage of the Nova Eye Care originates from the
proprietary position as the business has patent on the reversible iontophoretic plate for
delivering the dye to the cornea.
Market research:
The preliminary market research was conducted by the Nova Eye Care at the local
grocery market area of Sydney. Around fifty patients were selected randomly that are in the
grocery market with all the refractive errors and noticed that approximately 35% of
population required medical attention (Goworek et al., 2015).
Survey population Refractive error Considered medical Paying premium
50 18 20 15
The above stated market analysis data clearly points out that customers surveyed in
the above stated sample population having refractive errors would take into the account the

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surgery for permanent correction and most astonishingly majority would be paying the
premium price for the reduced risks of substantial complications.
Marketing Strategy:
The marketing strategy of Nova Eye Care business plan for optometry is designed to
develop the strategy which would result in lowest possible cost for obtaining new customers.
There are several optometry practices that still uses the traditional marketing methods and
neglects the latest digital strategies (Sargeant & Macquillin, 2016). Nova Eye Care has
phased out the yellow pages and has replaced it with the Google Places and Yelp to locate the
professionals and clients.
Advantage to customers:
The business has the advantage for its customers as Nova Eye Care plans to set up the
CRM software which would enable the business in managing their customer’s relation based
on one to one basis (Chernev, 2018). The loyal customer would also gain the advantage of
price discount and this would not only benefit the customers alone but also the Nova Eye
Care business as it can create loyal base of customers. The strong customer service culture
would definitely count as the strength for the Nova Eye Care.
Business Core Values:
The business values for optometry practice is comparatively straightforward which is
stated below;
a. Delivering complete satisfaction to customers
b. Strengthening relationship with customers
c. Developing unique method of incisionless refractive corrections.
Broader Business Objectives:
The broader business objectives of Nova Eye Care are stated below;

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a. The objective of the business is to meet the needs of the clients by offering best eye
related medical attention.
b. Another business objectives of Nova Eye Care are to beat the price competition and
service quality offered by the competitors.
c. Nova Eye Care objectives is to create a wide base of services and remaining informed
by being clearly up to date in the industry and market.
Product features and customer services:
In an attempt to avoid the complications related with the corneal incision and laser
refractive surgery process, Nova Eye Care principles designed NICS (Non-Invasive Corneal
Sculpting). The NCIS would permit effective laser refractive correction without causing any
trouble to the corneal opening (Philip et al., 2017). The business owner here is the licensed
optometrist and his practice would provide general treatment to the eye disorder. The product
feature of Nova Eye Care also includes the corrective lenses and comprehensive eye
examinations.
Pricing strategy:
The pricing strategy of Nova Eye Care includes pricing for market penetration where
the customers are willing to pay the average price for products that are significantly less
complicated (Kotabe & Helsen, 2014). In the environment of price competitive environment,
the pricing strategy adopted by Nova Eye Care is anticipated to attract customers with better
value for their money.
SWOT Analysis:
Strength:
 Qualified team of professionals
 Multiple options of payment
Weakness
 The business is just the start-up and
may not have the required finance to

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 Well-equipped medical centre
 Excellent culture of customer
service.
sustain the publicity.
 The company has limited finance to
acquire the latest medical and eye
care surgical equipment.
Opportunities
 The opportunity is unlimited and
Nova Eye Care is looking forward to
position its business in order to
make the best of available resources
(Weinstein & Pohlman, 2015).
 Nova Eye Care has the opportunity
of securing exclusive brand image.
Threat
 Nova Eye Care faces the threat of
economic downturn.
 The company faces intense
competition from the eye clinic.
 The unfavourable government
policies.
Advertising and promotion:
The advertisement and sales promotion strategy includes placing advertisement in the
local newspaper and radio regarding the availability of the ophthalmologist that perform the
refractive surgery (Marshall, 2014). To further promote the business, the owner would also
the word to mouth strategy.
Operations:
Organization structure and personnel summary:
Nova Eye Care operations would be entirely owned and managed by the Pauline who
is a practicing optometrist that has the experience in eye care business and also has the
license of optician. The store would remain open for six days in the week and would serve
between 25-30 clients each day for the purchase of eye wear, inquiries and repairs

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(Hutchinson et al., 2015). The expectations would also include the quality service day of
operating the business.
Figure 1: Figure stating organizational structure
(Source: As Created by Author)
Nova Eye Care would be following the line organizational structure as the owner
considers this organizational structure most useful for the business. The senior manager
would be at the top while people that are responsible for other areas and teams of people that
work in every department. For Nova Eye Care, this type of organizational structure provides
simplicity to the business. By gauging into the above stated organizational structure each tier
takes the responsibility and instructions from its immediate supervisor (Bresler & Lubbe,
2014). The senior manager would be communicating the instructions and this type of
organizational structure would work for the business as it has the rigid routine which requires
collaboration from each level of hierarchy.

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Figure 2: Figure stating floor layout of workspace
(Source: As Created by Author)
HR Policies:
The clear and efficient HR policies is regarded necessary ingredient for any successful
start-up company. The HR policies at Nova Eye Care clearly sets out the ground rules for
each employee and simultaneously protects the rights of the employees. The policies are
stated below;
Code of Conduct: The code of conduct is treated as noteworthy for setting up the
behavioural standards from the employees (Wagner & Eggert, 2016). Nova Eye Care in its
code of conduct would be including the common issues such as dress code, use of mobile
phone, punctuality and use of business property would be included into the code of conduct.
Drug and Alcohol Policy: Nova Eye Care believes that the drug and alcohol policy both
within and outside of the working hours can possess significant risks and cost the business
through injuries and absenteeism (Foxall, 2014). Nova Eye Care would implement the drug
and alcohol policy to outline the rights of business by testing employees for drug use.

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Leave Policy: Nova Eye Care leave policy includes the blackout periods during the busy
period with increase in the notice period for employees that makes application for leave in
order to make sure that they are not understaffed.
Privacy Policy: Employers at Nova Eye Care have the accountability of safeguarding the
personal information of the employees and customers. At Nova Eye Care the privacy policy
makes it clear that what necessary information is allowed to make public and what
information would remain private (Baker & Saren, 2016). The privacy policy of Nova Eye
Care also includes the employee health and personal information such as phone numbers,
address and emails.
Staff training and presentation:
Nova Eye Care would provide the wide range of training and development
opportunity for its staff, these are as follows;
a. Skill enhancement programmes: The programme enhancement programmes
includes the job training, internal and external courses such as use of software
packages and specialists training that relates to the use of job.
b. Specific management and supervisory focus: Under this program the employees
would be provided internal and external courses on management development,
supervisory skills and leadership development programmes (Kotler et al., 2017).
c. Professional or academic qualification training: Nova Eye Care would encourage
the employees to take constant professional development and where necessary to gain
additional qualification. Nova Eye Care would pay the fees at the start of the
programme when approved and the employees would sign the agreement of repaying
the fees.

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Process and activity analysis:
The business uses the simplest method of organizational process. The line
organization method of administration flows from the top to the bottom by carrying out the
command from top to bottom. As Nova Eye Care is following the line method of
administration each staff is assigned with the responsibility of following the command on
even basis without any kind of gaps in the communication and co-ordination taking place
(Schminke et al., 2015). The line of staff and line executive have the fixed authority and
responsibility to take flexible decision.
Accounting system:
The accounting system at Nova Eye Care is based on managing the financial activities
of the business namely the revenue, expenditure and liabilities. Nova Eye Care would be
following the double entry accounting system where every transaction would involve two
accounts (O'Neill et al., 2016). The double entry system would allow Nova Eye Care to
regularly keep in balance the accounting equation.
Advertisement and Promotion to be Undertaken and its costs:
The sales promotion techniques are undertaken by an organization that are designed to
increase the sales and promote the use of product and services. At Nova Eye Care the
business would be certain advertisement and sales promotion techniques to improve sales;
Discounted Price: As evident everyone loves deal and clients generally goes crazy over the
good price (Shafritz et al., 2015). Nova Eye Care would provide services to its clients with
discounted price for their advantage by having special events at the premises.
Vouchers and Coupons: To further promote the business, Nova Eye Care would provide
vouchers and promotions through magazine and online when clients subscribe to their blog or
email newsletter.

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Customer Loyalty Programs: The business would provide its customers with the customer
loyalty programs in order to strengthen the relationships with incentives. Nova Eye Care
would also provide its customers with the insider’s club where additional discount through
customer’s referral would also be provided. Overall the business would incur a total cost of
15,500 and 12,000 as the advertisement and sales promotion program.
Cost Summary Schedule Amount ($)
Advertisement Expenses 12,500
Market survey 10,500
Website Development Cost 10500
Working capital 50000
Health and Safety regulations:
Nova Eye Care believes that the injuries at the place of work can impact the business
in numerous ways which also includes decreased productivity, obligations to sick pay and
cost of locating the replacement (Van der Voet, 2014). At Nova Eye Care, the business would
employ the work health and safety policy to highlight the safety procedure and accountability
of all the employees in keeping the workplace safe.
Internal control Systems:
The internal control system comprises of the set of rules, policies and process which
is applied by a company to offer direction, increasing efficiency and strengthening the
adherence policies (Benzer et al., 2017). At Nova Eye Care the internal control system
comprises of the policies and process to offer reasonable assurance which specifies the
objectives of the company. The internal control system at Nova Eye Care includes the
following;

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Risk Assessment:
At Nova Eye Care following the setting up of the business objectives, the internal and
external risks is assessed. The management ascertains the risks as the means of controlling
following the assessment risks related to each objective.
Control Activities: The management would establish the controlling activities system to
prohibit the risks related with each objective (Ilin et al., 2016). The controlling activities at
Nova Eye Care would include all the measures that should be followed by the employees.
Information and communications: At Nova Eye Care appropriate information relating to
decision making would be collected and reported at the right time. The events which yield
data might arise from the internal and external sources (Grochla & Szyperski, 2018). The
business believes that communication is necessary for attaining the management goals.
Monitoring: When the internal control system is in practice, Nova Eye Care would monitor
the effectiveness with the objective that necessary charges can be made given any serious
problems originates.
Risk Assessment
Control
Activities
Information and
communications
Monitoring

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Figure 3: Figure explaining Internal Control System at Nova Eye Care
(Source: As Created by Author)
Administration
Business Location:
Nova Eye Care would be initially located at Canterbury – Bankstown in Sydney. The
website of the company would be registered as (www.novorg.com) and the process of
trademark has been initiated. With the objectives of strategic plan to contract with the third
party for all the requirements, the facilities would largely include the office for the personnel
and storage space for its inventory (Heizer et al., 2017). After three years of its operations the
business would explore the feasibility of constructing its own facilities.
The business premises at Nova Eye Care would be taken on rental basis. The initial
research and development would be attained through the collaborative effort of local council.
As Nova Eye Care is a new start-up it would purchase furniture and equipment along with
digital computers as the initial start-up requirement of business. The IT costs would include
the website development costs to launch the company at the public domain. Furthermore, a
collaborative effort would be made with the University department of Ophthalmology to
provide Nova Eye Care with the initial research facilities.
Staff roles and responsibilities:
The personnel plan of Nova Eye Care chronical the growth of organization to around
15 employees during the first three years of its operations. The staff type would include the
senior management, operational staff and administrative staff (Stevenson, 2014). In the lower
line of organizational structure, the customer service and facilities management would be
reporting the operational staff while the accounting and marketing personnel would be
reporting to the administrative staff. The operational staff and administrative staff must

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possess the minimum graduate degree in management while the senior management should
have the qualification of MBA. The employees would be paid salaries based on the industry
standard and would follow the criteria of minimum wages as prescribed by the Australian
government. Nova Eye Care would provide the pension program based on the superannuation
program for its employee benefits (Haksever & Render, 2018). The employee would deposit
the fund superannuation fund without having any tax implications, until they retire or
withdraw from their fund. Nova Eye Care would also provide its employee with the option of
withdrawing the minimum amount as the pension payment each year.
Staff training and Presentation:
The supervisors, workers and visitors at Nova Eye Care are anticipated to carry out
their duties and responsibilities in the safe and healthier manner and are responsible for the
health and safety of both themselves and others. Nova Eye Care is committed to provide their
employees with the necessary training and instructions to make sure that the necessary work
practices are followed on the job and to promote their off job use (Hitt et al., 2016). The
health, safety, the environment and loss control at the workplace is the responsibility of
everyone.
The other work, health and safety regulations would include the sick pay obligations
and the occupational legislation to make safer and healthier work environment. Apart from
the health and safety regulations Nova Eye Care would also implement the programmes that
would relate to the enhancement of skills for the employee present position (Harvey et al.,
2016). For staff training and presentation Nova Eye Care would also provide the internal and
external courses on management development, supervisory skills and programmes related to
leadership development of employees.

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Staff Regulations and policies:
The staff regulations and policies include the legal responsible for the acts relating to
harassment and discrimination. Having the policy in place clearly communicates the staff
regarding their behaviour at work. The organizational policies would outline the procedure
for dealing with the complaints (Bromiley & Rau, 2016). The code of conduct is treated a
vital for setting up the standards of behaviour that is anticipated from the employees.
Common issues include the dress code and the punctuality forms the part of code of conduct.
Additionally, the superannuation program is created by Nova Eye Care for the
employee benefit as the company pension plan. Superannuation benefit is offered to the
employee on behalf of the group towards the superannuation policy that would be held by the
owner of Nova Eye Care (Elliott, 2017). The contributions made by the employee in the
superannuation would typically not involve any income tax implication until their retirement
or withdrawal.
Advertisement and Promotion:
The promotion of Nova Eye Care technology would comprise of targeting two
different group of customer base. Namely the optometrist performing the laser refractive
surgery and patients that has the refractive errors. The success of the Nova Eye Care is
dependent on the technology by both the groups and its promotional strategies would be
reflective of this fact. The promotional strategy of Nova Eye Care is stated below;
In the process of sales promotion procedure for Ophthalmologists the main
consideration would be the efficiency of the process and the superiority over the current
technology (Mahadevan, 2015). One of the most vital factor of promoting the Nova Eye Care
technology is the concrete research result that would display the superiority over the current
technology. Following the completion of the research, Nova Eye Care would target the

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publication of highly visible and reputable journals, advertisement in the same journal and
presentation at the national conventions.
Another vital factor involved in promoting the technology of Nova Eye Care among
the patient is to concrete the results that would display the superiority over the current
technology. Once this has been embarked by Nova Eye Care, the business would embark on
the large scale national advertisement campaign that would focus on the television, print
media and newspaper advertisement.
Marketing strategy:
Nova Eye Care sales strategy include the investment in its technology by purchasing
the laser that would be used by the business in its process. Once the investment has been
made the sales effort needed would heavily rely on the refractive surgery (Henderson et al.,
2015). The sales force would be largely dependent on the initial demand push for the laser,
then to the much lesser extent for additional components.
The marketing strategy at Nova Eye Care would allow the optometry practice to
target men, women and families inside the target market. The marketing strategies include the
traditional print advertisements and placing ads on the search engines on internet. Apart from
the print media advertisement techniques Nova Eye Care would also use the internet based
strategy. The company would use the own website and the continuous marketing strategy
would help in maintaining the sizable degree of print and advertisement methods.
Accounting Systems:
Choosing the accounting system is dependent on the budget, size of business and
preferences. The business would be following the double entry bookkeeping as the means of
accounting system (Khan, 2015). Under the double entry bookkeeping system the Nova Eye
Care would record in terms of the debits and credits which would make it easy to prepare the

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correct financial statements and detecting the errors as well. The double entry bookkeeping
system would enable Nova Eye Care in maintaining the balance. Apart from this Nova Eye
Care would maintain the reporting frequency by preparing the petty cash statement and
business activity schedule to keep track of the expenses and revenue produced from the
operations.
Management –
Business name registration:
The business would be registered under the name of “Nova Eye Care”. Furthermore,
it would have the ABN number as well. The ABN number of Nova Eye Care would be 986
458 792 15. The structure of the business would be entirely based on the sole proprietorship.
As the business is operating in the special ophthalmology industry it is required to obtain the
approval of Iontophoretic devices for drug delivery purpose. furthermore, it would also obtain
the approval of polymetric contact lenses.
Management Hierarchy and Lines of Reporting:
Nova Eye Care would be following line organization structure with Senior manager at
the top level while the subordinates would be accountable for reporting the operational
manager and administrative manager for general and administrative work. There will be three
key personnel in the form of senior manager, operational manager and administrative
manager with both having the qualifications in Business administrations (Mullinova, 2016).
The decision making authority would rest in hands of owners regarding the strategic direction
and growth initiatives.
The strategic direction and growth initiatives:
The vital element of Nova Eye Care strategy is to market its technology to those that
are performing the process and those on which the process would be carried out. Once the

25ACCOUNTING CAPSTONE
research data and publicity is generated, the sales would step up in order to promote the
initial investment in the laser and equipment necessary to create the demand push sales. The
strategic direction would involve analysing the sales team closely with the laser
manufacturers so that it can promote technology to the patients and surgeons (Warren &
Jones, 2018). The growth initiatives of Nova Eye Care are to create the first class eye care
clinic that would take care of the highly placed customers and lowly placed clients until and
unless they can afford the service of Nova Eye Care.
Financial Plan
Nova Eye Care aims to raise the capital through owner’s contribution and bank
funding. The start investment has already been committed by the management. The proceed
derived from the operations would be used to fund the requirements of working capital of
Nova Eye Care. The land and building, equipment and store hardware would be purchased as
the means of increasing the profitability of Nova Eye Care. The cash flows are treated as
normal to the operations of Nova Eye Care (Barth, 2015). Funds obtained from the bank
would be used for the business operations. As the growth initiatives the competitive
advantage of the Nova Eye Care originates from the proprietary position as the business has
patent on the reversible iontophoretic plate for delivering the dye to the cornea.
Key Performance Indicators:
The KPI of Nova Eye Care are as follows;
a. Gross profit margin as the percentage of sales
b. Growth rate of revenue
c. Relative market share
d. Number of visitors or customers that abandon the conversion process.

26ACCOUNTING CAPSTONE
Important Assumptions:
a. The sales of the business are anticipated to be conservative and assumes that the sales
would grow by 5% in the second year of operations. Moving into the third year of
operations the business anticipates rise in sale by another 10%.
b. The analysis is based on the economic seasonality where Nova Eye Care may
experience slower months.
c. The analysis also assumes that the owner would draw smaller amount as the salary
and also assumes that any point of time may withdraw at his discretion.
d. The sales are based on cash basis.
e. The business anticipates moderate ramp up in the staff over the three forecasted years.
f. Nova Eye Care anticipates to make 30% of return on investment (ROI).
Start-Up Capital Expenditure:
Start Up Expenses
Start-up Expenses
Fixed Costs Particulars Amount ($)
Website Development Cost $10,500
Leased Premises Rent $7,500
License cost $6,500
Professional Fees $7,000
Utilities $12,500
Wages and salary for three month $31,350
Accountant fees $32,000
Solicitor Fees $4,800
Rental Lease Costs $9,000
Phone & Internet Connection Costs $2,800
Computer Software $9,000
General and Administrative Expenses $45,000
Staff training cost $15,000
Marketing cost $12,500
Office equipment $7,500
Building & Content Insurance $12,050
Working capital $50,000
Total Fixed Costs $2,75,000

27ACCOUNTING CAPSTONE
Average Monthly Costs
Rent $875
Interest on loan 8% $542
Postage & Telephone $625
General and Administrative Expenses $3,750
Salaries / Wages $2,613
Total Average Monthly Costs $8,404
x Number of Months: 12
Total Monthly Costs $1,00,850
Total Start-up Expenses $3,75,850
Start-up Assets
Sources of funds
Owners Fund $2,00,000
Total Owner Funding $2,00,000
Loans
Bank Loan $1,50,000
Other
Total Loans $1,50,000
Total Start-up Funds $3,50,000
Assets
Computers 5000
Furniture $15,000
Storage hardware $25,000
Equipment’s $30,000
Total Fixed Assets $75,000
Total Start-up Assets $4,25,000
Sales Forecast:
(1) SALES FORECAST
Year 1 2 3 4 5
Projected Sales 4,50,000 5,17,500 6,21,000 7,57,620 9,47,025
(b) Cost of goods 1,45,850 1,53,143 1,65,394 1,85,241 2,09,323
Profit and Loss Account:
(4) PROFIT AND LOSS
FORECAST
Year 1 2 3 4 5
0 0

28ACCOUNTING CAPSTONE
Revenue
4,50,00
0
5,17,50
0
6,21,00
0
7,57,62
0
9,47,02
5
Cost of sales
1,45,85
0
1,53,14
3
1,65,39
4
1,85,24
1
2,09,32
3
Gross profit
3,04,15
0
3,64,35
8
4,55,60
6
5,72,37
9
7,37,70
2
Gross Margin
4,12,27
0
4,69,93
0
5,58,01
3
6,96,05
9
8,65,06
4
Expenses/overheads
Leased Premises Rent 7,500 7,500 7,500 8,250 9,075
Wages
1,25,40
0
1,50,48
0
1,88,10
0
2,35,12
5
3,05,66
3
Administrative Expenses 2,550 3,060 3,825 25,000 25,000
Communication Expenses 45,000 54,000 67,500 87,750
1,14,07
5
Advertisement Expenses 15,500 18,600 23,250 30,225 39,293
Rates 12,500 15,000 18,750 24,375 31,688
Insurance 7,500 9,000 11,250 14,625 19,013
Other general expenses 9,550 11,460 14,325 18,623 24,209
Interest 2,250 2,700 3,375 4,388 5,704
Market survey 12,000 12,000 12,000 15,600 20,280
Prelim expenses 10,500 12,600 15,750 20,475 26,618
Total expenses/overheads
2,50,25
0
2,96,40
0
3,65,62
5
4,84,43
5
6,20,61
6
Profit before tax 53,900 67,957 89,981 87,944
1,17,08
7
Tax @ 30% 16,170 20,387 26,994 26,383 35,126
Profit after tax 37,730 47,570 62,987 61,561 81,961
Transfer to reserves 53,900 67,957 89,981 87,944
1,17,08
7
ROI 38% 24% 29% 25% 31%
Cash Flow Forecast:
(2) CASHFLOW FORECAST
Year 1 2 3 4 5
CASH INFLOWS
Cash from Sales 4,50,000 5,17,500 6,21,000 7,57,620 9,47,025

29ACCOUNTING CAPSTONE
Directors loans 1,50,000 1,50,000 1,50,000 1,50,000 1,50,000
Capital Employed 2,00,000 2,20,000 2,42,000 2,66,200 2,92,820
Other cash inflows
TOTAL CASH INFLOW 8,00,000 8,87,500
10,13,00
0
11,73,82
0
13,89,84
5
CASH OUTFLOWS
Payments for materials 1,45,850 1,53,143 1,65,394 1,85,241 2,09,323
operating expenses ( )
Premises (rent, rates) 7,500 7,500 7,500 8,250 9,075
Wages and salaries 1,25,400 1,50,480 1,88,100 15,000 15,000
General expenses 2,550 3,060 3,825 25,000 25,000
Interest and bank charges
payable 12,000 12,000 12,000 30,000 30,000
Lease payments 7,500 9,000 11,250 5,000 5,000
Corporation Tax 16,170 20,387 26,994 75,000 75,000
Market survey costs 10,500 12,600 15,750 20,475 26,618
Other preliminary expenses 2,550 3,060 3,825 4,973 6,464
capital expenditure
Plant and other capital
expenditure 75,000 75,000 75,000 75,000 75,000
financing repayments
Loan repayments 12,000 12,000 12,000 12,000
TOTAL CASH OUTFLOWS 4,05,020 4,58,230 5,21,638 4,55,939 4,88,479
Cash flow summary
NET CASHFLOW FOR
PERIOD 3,94,980 4,29,270 4,91,362 7,17,881 9,01,366
OPENING CASH BALANCE 2,50,000 6,44,980
10,74,25
0
15,65,61
2
22,83,49
3
CLOSING CASH BALANCE 6,44,980
10,74,25
0
15,65,61
2
22,83,49
3
31,84,85
9
Balance Sheet:
Balance Sheet
Assets FY-1 FY-2 FY-3 FY-4 FY-5
Current Assets
Cash $2,36,25
0
$2,45,55
5
$2,23,61
7
$1,34,52
4 $82,550
Accounts receivable $4,50,00
0
$5,17,50
0
$6,21,00
0
$7,57,62
0
$9,47,02
5

30ACCOUNTING CAPSTONE
Total current assets $6,86,25
0
$7,63,05
5
$8,44,61
7
$8,92,14
4
$10,29,5
75
Fixed (Long-Term) Assets
Furniture 15,000 15,000 15,000 15,000 15,000
Storage hardware 25,000 25,000 25,000 25,000 25,000
Equipment’s 30,000 30,000 30,000 30,000 30,000
Computers 5,000 5,000 5,000 5,000 5,000
(Less accumulated depreciation) $10,500 $9,100 $7,980 $7,084 $6,367
Total fixed assets $64,500 $50,900 $52,020 $52,916 $53,633
Total Assets $7,50,75
0
$8,13,95
5
$8,96,63
7
$9,45,06
0
$10,83,2
08
Liabilities and Owner's Equity
Current Liabilities
Accrued Rent $7,500 $7,500 $7,500 $8,250 $9,075
Bank Charges Payable $7,500 $9,000 $11,250 $14,625 $19,013
Income taxes payable $16,170 $20,387 $26,994 $26,383 $35,126
Accrued salaries and wages $1,25,40
0
$1,50,48
0
$1,88,10
0
$2,35,12
5
$3,05,66
3
General Expenses $2,550 $3,060 $3,825 $4,973 $6,464
Current portion of long-term debt $1,50,00
0
$1,38,00
0
$1,26,00
0
$1,14,00
0
$1,02,00
0
Total current liabilities $3,09,12
0
$3,28,42
7
$3,63,66
9
$4,03,35
6
$4,77,34
0
Long-Term Liabilities
Long-term debt $1,50,00
0
$1,38,00
0
$1,26,00
0
$1,14,00
0
$1,02,00
0
Less: Loan Repayment $12,000 $12,000 $12,000 $12,000
Total long-term liabilities $1,50,00
0
$1,50,00
0
$1,38,00
0
$1,26,00
0
$1,14,00
0
Owner's Equity
Owner's investment $2,00,00
0
$2,20,00
0
$2,42,00
0
$2,66,20
0
$2,92,82
0
Net Profits $37,730 $47,570 $62,987 $61,561 $81,961
Reserve and Surplus $53,900 $67,957 $89,981 $87,944 $1,17,08
7
Total owner's equity $2,91,63
0
$3,35,52
8
$3,94,96
8
$4,15,70
5
$4,91,86
8
Total Liabilities and Owner's
Equity
$7,50,75
0
$8,13,95
5
$8,96,63
7
$9,45,06
0
$10,83,2
08

31ACCOUNTING CAPSTONE
Break-Even Analysis:
Revenue Contribution Fixed Cost Profit
182455 91227.5 182455 -91227.5
364910 182455 182455 0
456137.5 228068.75 182455 45613.75
547365 273682.5 182455 91227.5
100000 200000 300000 400000 500000 600000
-150000
-100000
-50000
0
50000
100000
150000
200000
250000
300000
-91227.5
0
45613.75
91227.5
182455 182455 182455
182455
91227.5
182455 228068.75
273682.5
Contribution
Fixed Cost
Profit
Figure 4: Figure stating break even analysis
(Source: As Created by Author)
What if Analysis:
If the Nova Eye Care actual operations and financial results are in the reasonable
conditions, then the anticipated results of the business would be an attractive asset to the
acquisitive competitor or the larger medical device company. If to the extent the actual
functional outcomes materially goes beyond the projections the chances of IPO exit for Nova
Eye Care increases. Excellent business result would lead to improvement in the financial
position and making new product development with more plausible success. In this situation,

32ACCOUNTING CAPSTONE
the opportunity of raising the capital and repaying the full amount of bank loan becomes
more likely.

33ACCOUNTING CAPSTONE
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38ACCOUNTING CAPSTONE
Appendix:
Ratio Analysis:
Common Financial Ratios Year 1 Year 2 Year 3 Year 4 Year 5
Debt Ratio (Total Liabilities / Total Assets) 0.61 0.59 0.56 0.56 0.55
Current Ratio (Current Assets / Current Liabilities) 2.22 2.32 2.32 2.21 2.16
Working Capital (Current Assets - Current Liabilities)3,77,130 4,34,628 4,80,948 4,88,788 5,52,235
Assets-to-Equity Ratio (Total Assets / Owner's Equity) 2.57 2.43 2.27 2.27 2.20
Debt-to-Equity Ratio (Total Liabilities / Owner's Equity) 1.57 1.43 1.27 1.27 1.20