Part 1: Project proposal
An overview of the market
A few years ago, the world witnessed one of the worst downturns in economic activity since the 1920s great depression. Businesses had to endure harsh economic times with some financial institutions having to close shop after dramatic decreases in revenue. However, in the recent past, we have seen recovery efforts instituted by governments from all over the world start to take shape. The economy is hence once again looking up and entrepreneurs are going back to the markets in droves. With increased rates of investments and a market mood that can essentially be said to be exuberant in regard to investments; it seems like the perfect time to actualize business ideas whose sustainability looks bleak a few years ago.
Fortress International shall be an investment and tax consultancy firm with branches in all parts of the world but headquartered in New York. It is important to note that currently, people are optimistic in regard t investments as the markets are looking up but a very small percentage of people possess the financial skills to capacity to make well informed investment decisions. Fortress International shall target this class of individuals. It is however important to note that though this class of individuals shall form the primary clientele base of Fortress International, other clients shall also be accommodated through a comprehensive range of services which shall be rolled out once the company starts to operate. With that in mind, it is prudent to make a critical review of the services Fortress International shall offer to the market.
Products to be sold
- Advisory services
As mentioned above, Fortress International shall have an advisory services arm that shall concern itself with availing advisory services to a diverse range of clients. This arm of the company shall mainly target high net worth individuals who have the money but no expertise in the investments world. Individuals in this category shall be advised on the wide range of investment avenues from which to choose from including but not in any way limited to the stock exchange markets, the bonds market as well as the real estate market amongst other investment avenues. Clients will also be advised on how to invest offshore and on which products to invest in when considering offshore investments.
2 Wealth management
Fortress International shall also manage assets for its clients both locally and abroad. This service is especially crafted around the need for proper management of a wide range of investments including but not in any way limited to interests in the money markets, the real estate marketplace as well as the capital markets. It is important to note that in the current day and age, pope are increasingly being held up in other commitments (be the familial or societal) and hence they must approach competent as well as experienced management consultants who act as custodians of such assets in exchange of a small fee called a commission. Fortress International shall seek to exploit this profitable opportunity.
3. Tax and auditing services
The tax and auditing arm of the company shall be concerned with the two important roles of filing tax returns for businesses as well as auditing books of accounts of firms so as to give an objective picture of the firms health as well as satisfy other legal and regulatory provisions.
Part 2: Research paper
The role and importance of an Executive Summary
It is important to note that the executive summary is taken to be the most important part of the business plan. This is essentially because it might be the only part of the entire paper that gets read by those to whom in is written or tailored for. However, apart from this, the executive summary has a number of other significant advantages.
By definition, the executive summary can be taken to be a brief of the business plan in its entirety. It hence follows that the main purpose of the executive summary should be to inform the reader of the applicability of the business as well as its practicability. In addition to explaining top the reader what the business is all about the executive summary should go ahead to entertain the reader and motivate them to read on. It is hence important t note that the executive summary can be said to have attained its mandate if the reader understands the entity more after going through the executive summary and indeed is motivated to know more in regard to the business plan. With that in mind, it must be noted that the executive summary must be easy to understand, short and not lengthy and straight to the point.
When it comes to the significance of the executive summary, it is can be noted that it goes a long way to convince investors to invest in a certain business. Without a precise executive summary, it might be hard to for investors to tell what your business is all about and hence any attempts to attract the same may end up being an exercise in futility. An executive summary hence serves as a summation of the business plan from which those interested in the business can depend on to provide a true and concise picture of what the business is all about in a nut shall.
Further according to Smith & Janet (2000), an executive summary is an important text for the owner of the business. While developing the executive summary, the owner of the business can tell whether or not the business plan is worth writing in its entirety. It is important to note that an executive summary can go a long way towards the facilitation of the identification of gaps in the business plan, an issue which can be addressed way before the completion of the business plan. Hence in a way, the executive summary acts as a premonition of the business plan.
In conclusion, it may be noted that while the executive summary is only a miniature version of the business plan, it cannot and does not indeed need contain loads of information which in some perspective can be seen to be quite unnecessary. Smith & Janet (2000) notes that the information contained in the business plan must and should not be duplicated in the executive summary section of the business plan. Doing this would essentially be usurping the relevance of the other sections of the business plan.
Essentially, a pro forma can be defined as a financial statement which is largely hypothetical and which goes a log way to show the various assets, liabilities as well as expensed and income the business entity might recognize going forward. It is important to note that in instances where is speculated that the business may merge with another; a pro forma might go ahead to show or display the projected earnings in such a scenario. The projected earnings can also be shown when there is reason to believe that the business shall offer for sale some of its operations going forward.
In the current day and age, businesses are being required to submit pro forma statements at the time of applying for loans from financial institutions. This is a trend that seems to have caught on with a number of financial institutions around the globe. For instance, according to Livingstone (1992), in an instance where the bank wants to purchase stock and is requesting the bank for a loan to purchase the same, the bank may demand to see the pro forma statement of the business which should contain the impact on current assets as well as liabilities the loan or overdraft facility would bring about. This should be based on information contained in the businessâ€™s most recent statement of financial position or balance sheet.
It is important to note that apart from its applicability on the business front as firms seek financing, banks also use pro forma statements to map the amount inform of returns that would be realized once a business combination deal is sealed i.e. a merger or acquisition. This business combination undertaken could be with another bank or in relation to a joint venture which may call other firms to make equity contributions. In that regard, it is clear that the advantages of Pro Forma statements are many and varied. Hence the uses, role as well as importance of pro forma statements extend far beyond the bank scenario recounted above.
To begin with, a business entity may use pro forma statements for purposes of planning as well as control. In this case, by virtue of the pro forma statements being standardized inform of presentation, the management of a given company can always utilize the same for comparative purposes in regard to other business plans. Hence while taking competing business plans into consideration; the management can always come up with an analysis of the results (projected) by arranging operating and financial statements data appropriately so as to determine the most appropriate plan as far as the interests of the firm are concerned.
Further, a pro forma statement is a tool for financial modeling. Hence with a pro forma statement, it becomes easy to carry out a number of mathematical calculations including but not in any way limited to financial ratios. It can be noted that financial models founded on the projections as presented on pro forma statements go a long way towards enhancing the realization of corporate goals of the firm. Pro forma statements also go a long way towards enhancing financial reporting. For a startup, pro forma statements may be utilized in reports (external) which are drafted for investors, creditors as well as stockholders of a business. It hence follows that for startups that would wish to have their stocks listed later at the stock exchange, pro forma statements may be demanded by SEC. There are also requirements by accounting regulatory bodies stating that should a company decide to institute changes as far as their financial statements character are concerned, pro forma statements must be prepared.
Livingstone, John Leslie (1992). The Portable MBA in Finance and Accounting. New
Smith, R. L. & Janet K. S. (2000). Entrepreneurial Finance. John Wiley
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