Table of Contents
The Mitgant Company is seeking for making an entry into the business of event planning. When an organization comes into operation, it needs to engage in intensive marketing in order to stand a chance impressing. From the onset, it is observed that the company intends to focus on extending top quality services on event planning. Cost effectiveness will be a central aspect that the company will employ in a bid to unlock the largely competitive market. The company has important information relating to the typical customer, an important attribute that is likely to influence how the company faces the market. This includes general circumstances, customer needs, and difficulties faced by customers. Information on these aspects serves as a leveraging point for understanding the market dynamics, specific customer needs, and communication channels.
Mitgalant will provide customers with high-quality event planning services having a specific focus on corporate retreats for training purposes and launching products. The company identifies the following benefits as critical for the customers. Professionalism, competitive pricing, and customer service are the main outcomes.
The Mitgalant business is about supplying other business entities with personnel. Thus, the entity’s primary value creation activity is matching worker skills with employee needs and requirements about work. In this regard, the organization will serve employers and jobseekers within the locality.
As an industry, the placement sector is relatively new in the organizational business world. Like many other business engagements, the organizations operating within the industry use various strategies aimed at enhancing profitability and sustainability.
Understanding the general environment is critical in the running of business operations (Dess, Lumpkin, Eisner, & McNamara, 2012). The company does not show major variations with other business settings. For that reason, the operational environment has an effect on how it performs. In order to maximize returns, the company is to exploit the available opportunities while putting in place a mechanism for minimizing emerging threats at the same time.
Without doubt, the environment is witnessing enormous technological changes. Keeping pace with the developments, the company plans to run an operational website with such features as job postings. Adopting the current technology is in line with matching expectations of the way job placement is done because technology alters how firms function in industry in regard to serving clients and managing data. The company also has a plan on mitigating unforeseen circumstances such as financial crises. It is remarked that economic slowdown do not augur well for business. Such economic distortions pose a fundamental change regarding how businesses manage their labor forces, utilize temporary and contract labor. The changes have repercussions for placement segment of the staffing industry.
The organization requires ten employees to serve in various departments. The leader/CEO will be responsible for the entire company operations. An assistant will serve the same purpose. Six employees will also serve in two departments of marketing and operation. The remaining three workers will be assigned duties depending on unfolding events or functions.
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The recruitment process will take place normally. After highlighting each requirement, qualified specialists will be invited to tender in their applications for consideration (Pinson, 2004). After shortlisting candidates, the selection process involving screening will take place. The selected workers will be taken through orientation before being placed on their jobs. Then, from time to time, training and development, handsome remuneration, performance evaluation, promotions, and transfers will be carried out on a continuous basis.
Form of Business and Benefits
There exist different forms of business. For instance, there are limited liability companies, sole proprietorships, partnerships, and corporate entities. Each of the mentioned organizations present different benefits and limitations. As an example, sole proprietorships are easy to start and operate because only a few procedures and requirements are involved. However, such entities have shortcomings such as the danger of collapse when the owner dies or is incapacitated. For that and other similar reasons, the proposed business will take the form of a corporation.
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To begin with, it is noted that corporations operate as legal entities. Such an attribute presents both strengths and weaknesses. For example, as legal entities, such organizations can institute legal proceedings when its rights are infringed, while the same procedures can also be applied against it. Corporate entities also have limited liability status, an aspect that implies that in case the business goes under, the property of its owners cannot be attached to the organization (Silberberg, 2011). In other words, the property of the organization differs from the possessions of its owner.
In a bid to understand the benefit of corporations, reference to the ease of raising capital is also put into perspective. It is noted that capital is a primary factor in the start-up of business activities. Thus, the ability to amass substantial income is critical. Unlike sole proprietorships, partnerships, and limited liability companies, corporate organizations have a wider scope in terms of ability and capacity to generate revenues and raise funds. In this regard, assuming such a business model is highly advantageous.
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Accounting principles influence the conduct of a business organization that operates within any country. The need for transparency has coincided with the rise in the demand that organizations operate more openly. Consequently, operating within the country would point to a scenario where the new organization complies with both the requirements of Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Essentially, GAAP is supposed to align itself with IFRS. As a result, compliance to either of the two leads to the same point (Silberberg, 2011). While incorporating GAAP requirements into the accounting activities of the organization, the employment of accountants well versed with the regulations will be considered for recruitment. However, the organization will include the GAAP principles in its code of ethics. The entity will also set up an internal audit department which will be entrusted with the responsibility of ensuring that the GAAP provisions are adhered to. All company staff will be obliged to work under the code with a view of ensuring that each requirement is followed as stipulated.
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Pro Forma Balance Sheet and Income Statement
Pro forma financial statements are useful in business operations. Such statements are prepared ahead of anticipated transactions (Silberberg, 2011). In practice, the records are done in anticipation of new capital investments, mergers, acquisitions, or changes in capital structure. Hence, the pro forma statements model the expected results with specific focus on projected net revenues, cash flows and taxes. In this plan, the summaries of the estimated future company position are presented.
A balance sheet is an integral statement in the operations of any business. In particular, the records show a summary of entity’s total assets and liabilities. As a result, a balance sheet is an important document that is prepared not only to help investors, but also to assist managers in planning organizational activities.
Mitgalant Balance Sheet 12/11/2015
|Laborers Supply||$ 560|
|Total Assets||$ 6960|
|Note Payable||$ 1500|
|Mort Capital||$ 5460|
|Total Liabilities and Equity||$ 6960|
The income statement indicates the transformation of revenue to net income. The records show revenue details of an organization for a specific period of time. Similarly, the expenses and costs charged the revenues and taxes are captured by the statements. Just as in the case of a balance sheet, pro forma records are often prepared ahead of schedule.
There is the pro forma income statement for a new business below.
Mitgalant Income Statement 12/11/2015
|Cost of Goods Sold||420||450||500|
|Earnings before Interest and Taxes||115||120||140|
* Note:The figures are in millions of dollars.
According to the table above, when a new business begins, the forecast shows that the earnings will be small. However, as time progresses, the company expects to increase its earning power as it makes inroads into the placement market. However, slight variations are often likely to prevail.
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Business activities attract many risks. Hence, putting in place a control mechanism is one of the primary concerns of an organizational manager. Internal controls focus on either protecting business information or avoiding incurring huge losses.
When working within a corporate set-up, some disclosure requirements arise. Under the Truth in Lending Act, the conditions that satisfy disclosures must be taken into consideration (Silberberg, 2011). Based on the law, the organizations cannot disclose customers’ details without their consent. It is also noted that protecting corporate data must be treated with high regard. Thus, company employees tasked with organizational operations are not allowed to divulge sensitive information without the authorization of its owners.
Employment in the placement industry is sometimes cyclical. Hence, a risk mitigation tactic must be adopted before launching the company. Consequently, exercising caution such as setting up reserve funds to address the problem would be welcome. Another viable proposal is to invest in technologies. Despite being a major source of advantage, technologies are highly dynamic because of rapid developments. Hence, guarding against obsoleteness is critical. Similarly, it is noted that extensive government regulations pose a risk as well. In this case, negotiations or lobbying government officials would be a useful approach.
Impact of Regulatory Framework
Regulatory frameworks to guide business operations advance various regulations. For instance, the Sarbanes–Oxley Act of 2002 is important in streamlining professionalism in the accountancy field of public organizations (Piotroski & Srinivasan, 2008). Given that compliance to federal and state laws is mandatory, a new business will have to comply with the Act. Thus, the decision making in an organization will have to conform to provisions. For example, the top management must certify the veracity and the accuracy of the financial records prepared. In a bid to be a good corporate citizen and to avoid paying penalties such as those associated with non-compliance, the entity’s decision making will have to be in line with the regulatory environment’s expectations. In this regard, the organization will occasionally invite or open its offices for investigations by monitoring agencies besides involving external auditors in conducting audits.
The placement industry is relatively new in the business world. However, many factors such as technology, ease of entry, and globalization imply that attaining a high degree of competitiveness is a primary concern for many players within the sector. In this regard, emerging entities need to pay attention to customer needs before devising an appropriate strategy. As for Mitgalant, adopting the proposed plan is mandatory because it provides a guideline that is likely to yield positive results.