ImageFX Project Culmination Finance and Accounting

Mr. Allan Cohen Director of auditing for AOL Time Warner Modern business issues have caused businesses’ accounting procedures to be more closely observed and regulated. Accounting is watched over by SEC and AICPA.

Mr. Mark Skinner President and CEO of Citistreet Perfection is not only desired, but required in business.

Sigma Level Six Sigma  Incorrect drug prescriptions each year  Unsafe drinking water; hours per month  Missed landings each day at London’s Heathrow airport  Incorrect surgical operations per week  Newborn babies dropped by doctors and nurses each year  Lost mail per hour 99.7% 54, ,350 10,000 54, % 4, ,000 4, % 1 every 25 years 1 second every 16 years 1 in 10 years at all U.S. airports 1 in 20 years

Ms. Alison McDonald Auditing Director in Price Waterhouse Coopers Sacrifices must be made in order to turn around a company.

Introduction Several goals that we looked to accomplish. Find a sufficient use of seed capital to create a capital base for our business. Create a solid business plan to attract investors and set out a useful guideline for our company. Form a set budget that would provide a thought healthy divesting of funds into our business.

Business Plans Provide foundation of a business Revisited by management to keep focused on goals

Parts of a Business Plan Description of business Marketing Finance Management

The Importance of Business Plans Most underrated aspect of a business A strong business plan is key in gaining support from investors, strategic alliances, venture capital firms, or other sources to obtain seed capital Establishes a base for analysis of company performance

Investors Investors are risk-takers that buy into a company in order to make profits Provides a company with start-up capital as well as a continual supply of monetary funds as the company grows

Seed Capital Seed Capital is defined as the initial equity capital used to start a new venture or business. This initial amount is usually quite small because the venture or business is usually of high risk.

Monetary Backing A good business start up is key to a venture such as ours. A solid beginning will pave the way for a long and profitable lifespan of the company. A good corporation can not function without monetary backing. This monetary backing is used to fund such things as: office space, office supplies, labor, business licenses, rent, insurance, maintenance, advertising, and research and development.

How do we get our seed capital? Our business will require a total of $75,000 starting capital. In order for us to raise the necessary capital we will require support from banks and from our strategic alliances. Our faith in this corporation will be displayed in the books, as we will submit $20,000 of our own money. It is imperative that we do not put in only our own money, but that we obtain capital from outside sources.

Strategic Alliances A strategic alliance is an arrangement between two companies who have decided to share resources that one company may not have while holding something that another has. Our strong business plan will speak for itself in obtaining strategic alliances. Our strategic alliances will be made with our vendors who will provide backing on consignment. This means that we will pay for our raw materials as finished goods are sold. We will utilize our strategic alliances to achieve the advantages of scale, scope, speed, increase our market penetration, and enhance competitiveness in our market. In addition to these strategic alliances we will have venture capitalists’ financial support to develop new business opportunities through our new products.

The Rest of the Money As the initiators of this corporation, our confidence in our product is displayed in our financial data as approximately 20 percent of our funding will come from our own resources. The rest of this funding will come thanks to our strong business plan that will entice investors to place their faith in us as well.

Budgets This week we reviewed the importance of budgeting. The ability to budget effectively is a very important part of being a successful organization. A budget can be useful in setting standards of performance, motivating board and staff members, and providing a tool to measure results. Fulfilling the organization's mission is the main goal, and budgeting makes it possible.

Budget Cont. The budgeting process begins with something called zero-based budgeting, which is recommended at least every two years. Starting at zero and determining the needs of each department and program can provide a far more accurate budget than allowing for a simple incremental increase each year. Additionally, budgets should be conservative. Expenses should be overestimated by as much as 10 percent, and revenues should be underestimated to allow some flexibility.

Budget Cont. Involving board members, fundraising staff, accounting staff and other department heads is critical in this process. This allows for a concentrated look at the organization's mission, while considering the projected revenues and resources to meet those needs.

Budget Cont. Budgeting also plays a critical role in strategic planning. Many factors must be considered when outlining future financial goals, including: o Technology needs o Capital improvements o Overhead needs o Planned giving and capital campaign revenue o Borrowing funds

Budget Cont. Budgeting is an ongoing process. Budgets should be revised throughout the year and allow for increases or decreases in the budget as necessary. Not only should the board monitor the budget, management and staff should constantly scrutinize actual results in comparison to the amounts budgeted. It is important that procedures are in place to make sure that the difference between what was budgeted and what actually happened are being appropriately addressed. A well-prepared budget can help determine where the organization has been and prepare for its future. A solid budget can be the difference between success and failure.

Conclusion Discovered what sources of seed capital were and were not feasible. Created an efficient business plan that fitted in with our available resources and made a business strategy that would allow us to be competitive. Made a budget that did not go over what we had to work with.