Smart Style Unisex Salon free essay sample

The paper is a business plan for Smart Style Unisex Salon. It explains the type of business established and describes the products and services that the company offers, providing charts of projected accounts specific to the business, a chart of assets and liabilities, a pro-forma income statement. The paper describes the impact of the use of IFRS and the GAAP accounting standards. Description of the Business Smart Style Unisex Salon is a full-service salon that offers services and products to both men and women. Smart Style Unisex Salon is committed to constantly offer quality services and products as well as high customer satisfaction by offering superior products and exceptional services, and providing a pleasing atmosphere. The salon will provide these at competitive prices. The salon also maintains artistic decor within its premises and a welcoming work environment that respects ideas, opinions, diversity, and hard work. Smart Style Unisex Salon will provide hair care products and services modeled to provide healthy hair care to its clients. We will write a custom essay sample on Smart Style Unisex Salon or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The products will help the customers to keep and maintain healthy hair between appointments with Smart Style Unisex Salon. The general staffing plan of Smart Style Unisex Salon consists of 15 employees, and the Founders and Owners of Smart Style Unisex Salon. The employees include Kenneth Maxwell (Head Barber), Reese Joseph (Head Stylist), Esther Peter (Book Keeper, Accountant), Peter Williams (Maintenance, Inventory Manager). The remaining 11 employees will consist of a receptionist and the rest will be involved in other services provided by the salon. Type of Business and Ownership The business will be formed as a Texas corporation with four stockholders: John Martins, Joel Smith, Valerie Kim, and Juliet Wood. Each stockholder will own 25% of the issued stocks. The agreement and charter will be in accordance with the laws of Texas State and will be drawn up by Murphy Edwards, an attorney in the State of Texas. Products and Services The aim of the business is to provide a broad range of barber and salon services such as hair services such as relaxers, coloring, curling, conditioning, haircuts, weaving, and braiding; beauty care such body massage, body waxing, and facials to the people within the location; and Nails services such as pedicures, polish, and manicures. The business will also offer cosmetics. Current Proposal As the need for beauty by residents of Texas continues to increase, the operations of Smart Style Unisex Salon will also increase. The current stockholders have a total of $20,000 to invest in the salon. The business, however, requires additional funding for business loan of $200,000, which will be used to purchase business equipment for business operations. The start-up costs will be funded by capital from the four stockholders. Additional funds will be financed by a 6-year loan from an investor/lender at an interest rate of 10 percent per annum. Chart of Accounts Equipment Account This will be financed by a 5-year loan from an investor. Equipment will include machinery for providing beauty services and electronic machines that are relevant to business operations of Smart Style Unisex Salon. Furnishings Account This account will be maintained for materials such as furniture that are meant to furnish the area of business operation. The account will be financed by a loan from a lender. Products Account Products will include beauty products that will be sold by the business cosmetic section. This will be funded by the owners as well as the loan. Cash Account The cash account will be maintained for all cash transactions of Smart Style Unisex Salon. All the cash and checks from the business, as well as, the investor will be debited in the cash account. Sales Account Sales account will be important for recording all the sale transactions such as sale products and services. Expenses Account The expenses account will record all the expenses of the business such as payroll, rent and electricity, depreciation, marketing, insurance, interest and tax expenses. These expenses will be paid for using the revenues that Smart Style Unisex Salon will generate from its business operations. Revenue Account The revenue account will include profits generated from sale of products (cosmetics), as well as, the sale of salon services. Among the most crucial types of internal controls that will be used in this business are the physical, mechanical, and electronic controls particularly when handling the business equipment. Electronic controls ensure efficiency and accuracy in business operations, thus they ensure efficient control. Mechanical devices will include alarms and clocks in order to maintain a record of time that workers have worked. The business will also use preventive and detective controls to prevent loss and ensure quality. Segregation of roles is crucial when it concerns safeguarding business resources and assets (Gilbertson Lehman, 2011). This is because it ensures that there is no duplication of efforts since each worker performs his or her tasks in the business. Physical, Mechanical, and Electronic Controls The business will acquire safety deposit boxes and safes that will be used for business cash and documents. Access to the business assets will be limited to only one person who will be the only one with a password to access important business documents. Furthermore, there will be the implementation of storage cabinets by the business, which will be used for inventory and records. The implementation of computer systems with eyeball scans or fingerprint will be used to record and store all the important data relating to the operations of the business. Time clocks will be used to record time worked and alarms will be used to prevent break-ins. Smart Style Unisex Salon will ensure the implementation of television sensors and monitors to prevent robbery. Preventive and Detective Controls Smart Style Unisex Salon will ensure optimum segregation of duties to prevent any losses of fraud in the business entity. The business will ensure proper physical control and authorization over the company’s resources and assets. The internal controls will ensure safeguarding of business resources and assets in order to improve its operations. Any resistance and challenges associated with internal controls will necessitate maximum attention. To ensure that such issues do not cause a major challenge to the operations of the business, there will be strict laws and regulations that all workers of Smart Style Unisex Salon will be expected to adhere to. Lack of adherence to the rules and regulations on business operations will result in the firing of the employee(s) involved. Legal Requirements Business stockholders will be required to obtain licenses of operation from the legal institutions and departments. Smart Style Unisex Salon will operate in accordance to laws and regulations that govern the business operations. This is important because it will ensure that the business entity avoids incurring extra legal costs for not complying with the required rules and regulations. Smart Style Unisex will be carried out in compliance to the Sarbanes-Oxley Act. The act is intended to protect lenders and investors by improving accuracy and reliability of corporate disclosures made to security laws (Bumgardner, 2003). This is important as it ensures that business do not engage in wrongful acts since there are penalties involved. Revenues and Accounting The business revenues will be generated through the provision of reliable and quality beauty products and services of Texas residents. Complete accounting records will be kept by Smart Style Unisex Salon. Esther Peter, who is the firm’s accountant and book keeper, will be in charge of preparing financial statements and filing the tax returns of the business. Internal audit duties will be performed by an external auditor for the company in order to ensure that proper books of records are kept and represent a true and fair position of Smart Style Unisex Salon. Accounts will be prepared in conformity to the General Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS) in order to ensure that the business maintains the required statements for legal and financial purposes. IFRS and GAAP ensure that business maintain proper financial statements (Warren, 2012). Smart Style Unisex Salon will employ the Microsoft Excel and QuickBooks will be used as the accounting software. Changes will be integrated in the accounting books through the use of the double-entry system (ledgers).