My Business
Shaye Rooks-Ellis
Axia College of University of Phoenix
If I wanted to create my own business, I would like a small company. I would want one in which I am entirely in charge, and that sold a product in which I have an interest. I want to be able to enjoy going to work and doing something artistic.

The name of my new business will be Shaye’s Scrapbooking Supplies. My business will be a sole proprietorship. I chose this structure because I want to be in charge, and be able to make all my own decisions. My company will also be small, with just a few employees.

My business will mainly be selling scrapbook supplies. These can include software or machines like Cricut, stickers, cardstock, scissors, tape or glue runners, and other accessories. I will also hold small scrapbooking sessions where I can teach customers different scrapbooking techniques. Customers will be charged for these classes. They will be required to use their own supplies, such as cardstock, stickers, or paper, but my software and other materials will be available for use free of additional charge. I think the scrapbooking classes will generate much income for my company. Because these classes will be relatively cheap for me to teach, they should have a high ratio regarding the cost my company will incur versus the profit my company will make. Additionally, because the customers will use their own materials, I think that creates a selling opportunity for my business. If a customer needs an item, it can be found on my shelves.

Obviously, accounting will play a major role in the start up of my business. I will need to create a master budget detailing the many different types of budgets, as explained by Kieso (2003). For example, first I need a budget to determine estimated sales. I will also need a merchandise purchases budget to buy the necessary materials to stock my shelves. I need budgets to determine cash, the number of hours my employees can work, and selling and administrative expenses.

When I hire an accountant, I would want someone knowledgeable and trustworthy. I would require at least an associate’s degree. I want to make sure any accountant has the necessary knowledge to handle all budgetary issues and can help me make business decisions. Prior financial experience in a small business would also be a plus. Additionally, I would require several references to ensure that any accountant I hire is thorough and pays attention to detail.

Ideally, I would be that accountant. I am currently due to graduate in May with my accounting degree, so I will be able to handle all financial matters personally. I will know every financial aspect of my business and will be able to make informed business decisions or create budgets as needed. I like the idea of knowing every aspect of my business. I would not want my business to fail as a result of another person’s failure or lack of knowledge.

Before going into business, I think having an education in budgeting, internal controls, and cash management is necessary. If a good accountant is found, he or she can help create a budget and give suggestions for cash management. Of course, it is important for the business owner to also have some experience in those areas. The owner should know how to properly implement the internal controls that Kieso explains in Essentials of accounting (2003). Each employee should have a set of responsibilities. Those responsibilities should be separate from other areas regarding the control of cash. For example, a single person should not have access to all areas of cash, so a cashier should not be the person reconciling his or her cash drawer and then preparing the bank deposits. In my company, I would require each cashier to have his or her own cash drawer that is only accessible by that person. After close, the cash drawers would be counted by two people and be kept locked in a safe. Only necessary employees should have access to that safe. Additionally, because I am planning on having a small business, I would be the only person authorized to sign checks.

The business owner and the accountant should also know the five basic principles of cash management. These include quickly collecting cash on receivables (or in my case, merchandise), keeping inventory levels low, delaying payment on liabilities, planning the timing of major expenditures, and investing idle cash (Kieso, 2003). Because my business is merchandise based, I will be able to collect cash at the time of each sale. Any manager of my business should know that any products ordered should be able to be sold within a relatively short time. If possible, payment on inventory I have ordered should be delayed as long as possible in order to ensure that my business has enough cash to cover it. Likewise, major expenditures should be timed for when my company has the most cash on hand. Furthermore, all excess cash should be invested. A successful business entrepreneur knows that the money needs to be working for the benefit of the company at all times.

All financial aspects of a business will be detailed in the various financial reports. Balance sheets, income statements, and statements of cash flow can be examined in order to make decisions based on what is best for the financial health of the company. These statements will show me how my money is being earned and spent. If I see I am spending too much on inventory, that can be adjusted. If I see my classes are not profitable, I can either discontinue them or charge a higher fee. If I see I need to increase sales, I can strive for that. My budgets may also need to be adjusted if unrealistic goals were set.

In conclusion, in order to run a successful company, I need a good understanding of accounting skills. I need to know the best ways to create budgets, implement internal controls, manage cash, and examine financial reports. I need to know when and how to make sound business decisions.

References

Kieso, D., Kimmel, P., & Weygandt, J. (2003). Essentials of accounting: Tools for business decision making (2nd ed.). Hoboken, NJ: John Wiley & Sons, Inc.