Business Plan: General Characteristics

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Table of Contents

Accounting concepts to be used
Uses of a human resource department
Contribution to small business
Ethical decisions
New business technology
Factors to be considered for distribution channels
Types of debt financing
References

Accounting concepts to be used

The different accounting concepts to be used are as follows:

Going concern concept under which a business is concerned to an ongoing process without any specific life time.
The consistency concept which assumes that the concept that is adopted for one time will continue to be the concept in the future too.
The accrual concept that considers and records the income and expenses as and when they are due regardless of whether the transaction is made or not.
The prudence concept which entails not to overestimate an expense or income.

Uses of a human resource department

An organization should make use of a human resource department for managing all the matters that are concerned with the employees of an organization. It begins from recruitment of an employee to his retirement from the company. A corporate organization assigns the management of workforce of the organization to the human resource department. The major duties of human resource department are employee selection and recruitment, employee compensation and benefits, policy formulation and employee relations. Formation of a human resource department in an organization depends on the number of employees in the organization. “For larger, more complex organizations with hundreds of departments and divisions, the task is much more demanding, taking on a life of its own. Some companies have more than one HR Department – Corporate and Union.” (How HR works to get the job done, 1999 – 2008). SBA and SBDC.

Contribution to small business

Small Business Administration (SBA) is an independent agency formed in the year 1953 by the US federal government inorder to help the small business concerns of the country to grow and prosper. Considering the contribution that small business make to the economy of the country the US government provides many services beginning from financial assistance. “SBA provides a number of financial assistance programs for small businesses including 7(a), 504 and disaster assistance loans.” (Financial assistance, 2008). Some of the services offered by SBA to small business are financial assistance, grants, training, counseling and legal assistance.

“The Small Business Development Center (SBDC) helps new entrepreneurs realize their dream of business ownership and assists existing businesses in their efforts to remain competitive.” (Small Business Development Center, 2008). SBDC is also an agency formed by the US Federal Government. SBDC provides assistance to individuals who have some business plans and also the existing small business.

Ethical decisions

Ethics refers to a certain standards that an individual is ought to reflect in the different role he plays as a social being. Ethics and law cannot be misunderstood as the same thing. “A good system of law does incorporate many ethical standards, but law can deviate from what is ethical.” (A framework for thinking ethically, 2008). Every activity depends on the decisions that are taken by the concerned persons on that. The steps to be followed for an ethical decision making are as follows:

Identification of ethical issue is the first step. After identifying the issue it should be analyzed on the basis of the influence it creates on the society, individual and organization with which it is related.
Secondly the concerned persons should gather the facts related to the case. Certain facts may be very clear and some others may be hidden. The decision maker should search for any hidden facts too.
On the basis of the facts the decision maker should develop many alternatives. The alternatives must be analyzed in order to find out the best alternative.
Next, the alternative should be analyzed with approaches like justice, rights, common good and virtue.
The fifth step is to take a decision that is felt to be the right one on the basis of all the above approaches.
The final step is to apply the decision to the situation.

New business technology

A new business organization would require the basic technology for maintaining the data properly and for day to day operations. The hardware’s that are required by a new business are computers, printers and other gadgets, servers and switches. Internet is an essential requirement for managing the business online, introducing website, processing customer data and for advertising. The communication technology involves telephone networks, wireless systems, computer networks etc. Similarly software for accounting and other business based computations are also a requirement for a new business. (Pfleging, 2008).

Factors to be considered for distribution channels

The different factors that a marketer should consider while selecting the distribution channels are as follows:

Comparison of cost of the distribution method and the services provided by the intermediaries should be made in order to analyze whether the method is value driven.
The success rate of the distributor that is selected must be considered and compared with similar distributors.
The availability of insurance cover and the provider of insurance should be studied in detail in order to protect the goods while in transit.
The cost of storage of goods and the safety of the warehouse is the fourth factor to be considered.
Cost of shipping and the nature of goods that are shipped should be considered so that the goods reach the destination at least cost and minimum wastage. (Choosing the right distributor, 2007).

Types of debt financing

Five different types of debt financing are as follows:

Term loans: Term loans are the loans that are based on different terms or years. There are long term loans as well as short term loans.
Debenture: This is an acknowledgement of debt. It is a long term debt instrument that acknowledges the debenture holder that the amount borrowed from him would be returned with interest after certain years.
Syndicated loans: This refers to the loans raised from a group of banks. This source is mostly relied on by big corporations.
Overdraft: This is the excess withdrawal facility that a bank provides to the current account of a business organization.
Personal loans: The individuals who wish to be an entrepreneur may rely on personal loans to fund his business. (Jain, 2008).

References

How HR works to get the job done. (1999 – 2008). streetdirectory. Web.

Financial assistance. (2008). [online]. SBA. Web.

Small business development center. (2008). The University of South Dakota, Web.

A framework for thinking ethically, What is ethics, ethics is not following the law. (2008). Web.

Pfleging, Bill. (2008). Putting widgets to work. Inc.technology. Web.

Choosing the right distributor: Other factors to consider. (2007). The entrepreneur’s guidebook series. Web.

Jain, Payal. (2008). Different types of debt financing. maxabout. Web.