Student life does not generally afford a great deal of free time to
pursue your personal interests; however, at one point, you may have
considered turning a personal interest or hobby into an official
enterprise. Today, you have finally decided to turn that hobby into a
business but have realized that you need start-up capital from a lender
or investor.
To obtain funding, you need to convince a lender / investor that your
business is more than a hobby. You need to demonstrate that you have
a firm grasp of your business, the accounting practices that impact
your business, the controls needed to safeguard assets, and which
accounting system will produce accurate and relevant financial
information.
Write a six to eight (6-8) page business plan in which you:
1.
Describe the type of business you have created including:
a. The product or service, and general staffing plan. Provide a
rationale for your plan.
b. The form of your business and the benefits it offers your
particular business,
c. A chart of accounts specific to your business, including a
rationale as to the selection of each account. (Note: The chart of
accounts is a blueprint of your business for the lender/investor. It
should report the expected resources that you will consume in your
business (assets), the sources of those resources (liabilities and equity),
the sources of revenue, and expenditures that you expect to incur to
earn those revenues. You may build a detailed chart that includes
business units, divisions, product lines, etc.)
2. Based on the form of your business, analyze whether or not you
will be required to use Generally Accepted Accounting Principles
(GAAP) or International Financial Reporting Standards (IFRS)