Accounting for Decision Making - MAA103 - Deakin Business School

b) Business goals, strategy and vision

The goal of Crave cupcake shop is to offer high-quality bakery products at a competitive price in order to meet the demands of the middle level to higher income level people. There are various marketing strategies which will be used by the firm in order to grab the attention of a large number of customers (Swamidass, 2016). As a part of strategy, younger age people will be targeted by company who mostly prefer to buy bakery products occasionally and on daily basis. The vision of company is to become a number one choice for customers while making a purchase decision of cupcake.

c) Ownership and legal structure 

Crave cupcake shop is a sole proprietorship company because it is established and carried out by an individual. It is a small business that carries out all operational activities in an effective manner. All the decisions are made by the owner of the firm (Zimmerer,  Scarborough and Wilson, 2005).

Legal structure

Crave cupcake has established in Sydney a shopping center. There is only one owner of the firm who makes all decisions. Crave cupcake is a small company and so, it enjoys less tax rate and it also provides flexibility in time to its employees (Carrier, Raymond and Eltaief, 2004).

d) Funding Requirement

Crave cupcake is a start up company in which finance will be gathered from retained profit and a bank loan. To start a business, own money will be used which is $20,000. After establishing a business for extra cost, bank loan can be taken by the firm to carry out all the business operations in an effective manner (Maxwell,  Foley and Marty, 2015).

Financial Projections 

Projected profit and loss statement 

According to the given profit and loss statement of 12 months, Crave Cupcake expects to continue its steady growth in profitability in 12 months of operations. One of the important assumptions while calculating profit and loss is to enhance its sales monthly. The assumption is based of Crave cupcake is based on increase in sales from first month to 12 month. Below provided statement clearly shows continuous increase in the sales and profit.

Break even analysis

Break even analysis helps in determining the things which need to sell monthly or annually in order to cover the cost of doing business. Further, it is calculated on the basis of variable and fixed cost as well as revenue per unit of sales. All these assumptions help in making aware of accurate risk which can be faced by company.

Balance sheet 

Here, below provided is balance sheet of Crave cupcake shop:

Sales forecast

Crave cupcake is established with the purpose of earning profit in the bakery industry. It is essential for the firm to state its sales forecast which is based on the collected information at the time of feasibility studies and survey. Along with this most of assumption are available in this field.

Conclusion statement

From the above business plan, it can be concluded that for business plan, it is important to collect information from different sources so that business can be established successfully. Along with this, loan is required to be taken from bank in order to carry out the business activities successfully. Through adopting proper marketing strategy, customers can easily come to know about new company and its products which help in increasing the sales and profit of firm. Further, it can be concluded that financial plan helps in identifying the expenses and extra cost that occur while carrying out business activities successfully. 

References:

1. Carrier, C., Raymond, L. and Eltaief, A., 2004. Cyberentrepreneurship: a multiple case study. International Journal of Entrepreneurial Behavior & Research, 10(5), pp.349-363.
2. Maxwell, E., Foley, M., Braman, J., Sopeth, J. and Marty, R., 2015. Rosemount Eco-Green Business Park Feasibility Study.
3. Skoog, C. and Trosdahl, K., 2017. Strategic Business Plan for Christine's Sweet Confections (Doctoral dissertation, The College of St. Scholastica).
4. Swamidass, P., 2016. Engineering Entrepreneurship from Idea to Business Plan: A Guide for Innovative Engineers and Scientists. Cambridge University Press.
5. Zimmerer, T.W., Scarborough, N.M. and Wilson, D., 2005. Essentials of entrepreneurship and small business management. Upper Saddle River, NJ: Pearson/Prentice Hall.

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