Managemeny Accounting of Welvex and Sons Company

Welvex and Sons Company has is planning to be established on 31^st December, 2012. The company will produce beef sausages and chicken smoked sausages. The company is located in UK with twenty six acres of land. Our initial plan is to establish a beef and chicken firm which will provide us with t=raw materials to be used in the manufacturing. Our goal is to provide customers with fresh products, competitive pricing, incomparable customer services and exceptional quality. We prepare and manufacture beef sausages and chicken smoked sausages of high quality and high health standards. We will work with our customers and consider their tastes and preferences. This will ensure errors are reduced and flaws corrected early in the manufacturing process. The company is strategically placed to save customers money and time. The company will invest new technologies and ideas which will enhance our preservation methods. Considering that these products are highly perishable, we have to prepare only enough to avoid selling stale products to our customer (Schreyogg, 1980).

1.1 Objectives

1. To secure significant funds.
2. To lease and Locate suitable manufacturing institution.
3. To purchase equipment, supplies and machinery.
4. To employ skilled employees who are professional and talented.
5. To set up shops and open four businesses within a period of three years.
6. To successfully make a way into the targeted markets.
7. To secure contracts in order to achieve anticipated sales goals.
8. To become a profitable company in the nation and abroad.
9. To establish a solid image as an industry leader.

1.2 Mission

 To provide fresh and healthy products that enhances our customer’s healthy and refreshing moments.

1.3 Our Motto

Better your best. The company will do everything possible to satisfy the taste and preferences of the customers. The business expects its growing reputation to make to new customers and attract other business persons to support the anticipated growth. The two new products are expected to double the profits within a period of six months.

2.0 MARKET ANALYSIS

Food production industry gives the nation the highest GDP as compared to other industries. Food products are used in every part of the nation and also exported to outside countries. There is a noticeable increase in snacks in this century as the teenagers increase their demand for snacks. The competing company does not have chicken smoked sausages. It only has pork sausages. This is advantageous since we shall have unique products in this area.

2.1 MARKET SIZE

Meat processing companies in UK are sector includes over than 50,000 companies. Their combined annual sales add up to about $2 trillion. Additionally, there are about 500 sausages producers with a combined annual sale of about than $1 billion. In this case, Welvex and Sons Company will use a targeted industry strategy to pursue definable and specific market sections.

2.2 TARGET CUSTOMER

The company is located near the new university of science and technology. We highly target the students who are likely to use our products in large numbers. The university holds a population of 10,000 potential customers. Additionally, there is a medical college next to the university with 5,000 students. Therefore, the expected number of immediate customers is 15,000. The company will also supply to several supermarkets and private schools around before exporting plan starts.

2.3 Customer Profile

Lillian’s Hair Salon typical customer will be as described below:

• Between the ages of 15 and 50 especially students and pupils

• Income levels of $5,000 to $50,000 

• Students or full-time employed members of staff

• Looking for a refreshing snack for breakfast or between meals

• Searching for reasonably priced services

3.0 MANAGEMENT

Our leadership team is professional. Currently, the team consists of the Chief Executive Joyce Geoffrey, President Antony James, and Vice President Job Anne. Additional key leaders in the company will include marketing and sales managers, human resources managers, and information technology director and directors of finance. These positions are currently unfilled. However, we have several qualified candidates who are interested in joining the company in its new venture (Mintzberg 1994).

3.1 STRATEGY AND IMPLEMENTATION

To achieve our goals, the company will use new technology in all sectors. We have planned to use new technology ovens, coolers and heaters. We will have an aggressive advertisement immediately after starting so that we promote our product. This will include media campaign, online advertisement, bill boards and direct mailing the targeted institutions.

4.0 FINANCIAL PLAN

Welvex and Sons Company will earn revenue from sale of beef sausages and chicken smoked sausages. The attached Income Statement shows that the company’s gross profit margin will go beyond 72%. Additionally we will be in a position to gain a break-even with sales of $700,000. We anticipate reaching profitability within the first six months.

4.1 SOURCES AND USE OF FUNDS

Welvex and Sons Company require $2,450,000 to launch. Currently, we have raised $100,000 in which is in our treasury. Additionally, co-owners Joyce Geoffrey, Antony James and Job Anne have each invested $50,000 into the company. The company is currently looking funds from banks, business loans and outside investors. The initial funds will be used for software installment, operating costs such as taxes, payroll and utilities, insuring the company, equipment and build-out costs (Simons 2000).

4.2 SWOT ANALYSIS

4.2.1 Strengths

1. Exceptional customer services
2. Software development experience
3. production and Manufacturing experience
4. understanding target market
5. Competitive product pricing
6. Implementing cost saving processes
7. Comprehending emerging technologies

4.2.2 Weaknesses

1. Lack of  company history
2. New staff
3. Small customer base
4. Lack of influence with new relations

4.2.3 Opportunities

1. Hiring new talent
2. New processes and products
3. Coming up with modern technology the industry
4. Creating a new image
5. New applications and innovations of modern technology

4.2.4 Threats

1. Market demand fluctuations
2. effects of new legislation
3. Challenges in creating a talented team
4. Retaining chief staff members
5. Probability of competitors applying our technologies.
6. Retaining key staff members

4.3 Conclusion and Recommendation

Welvex and Sons Company expect to start the business and earn profit from sales of beef sausages and chicken smoked sausages. We have collected a fraction of the initial capital which will be used to start the business. The company requires $2,450,000 to launch. Currently, we have raised $100,000 in which is in our treasury. In addition to this, co-owners Joyce Geoffrey, Antony James and Job Anne have each invested $50,000 into the company. The company is currently looking funds from banks, business loans and outside investors. The initial funds will be used for software installment, operating costs such as taxes, payroll and utilities, insuring the company, equipment and build-out costs. This company will not only benefit the co-owners and the employees but the society and the nation at large. I therefore recommend banks and business loaning companies to support the company with funds and help us meet our target (Merchant 1985).

5.0 Environmental Impact

Every manufacturing industry is hazardous to the environment. We cannot afford to assume the environmental impacts that our company will have on the environment. First and foremost, there will be noise pollution which will interfere with the normal functioning of the society if not catered for. Additionally, the animal farm we want to establish will have a bad smell as a result of animal waste. Waste produced in the production sector is also hazardous. In solution to this, the company will use modern technology to decompose the wastes from animal farm in a manner that it will not have the bad smell. Chemical waste from the company will be disposed wisely to avoid interfering with the environment. In addition, the company will have modern noise absorbers to avoid excess noise. We shall also plant trees and specific flowers which refresh the air (Bodnar, H. & Hopwood 2009).

6.0 Reflection

I have prepared this accounting report and have successfully managed to remember what we have learnt in class. It has been an interesting and challenging activity to remember the process of preparing the report. The most interesting activity was brain storming to come up with a company with two products. This has enabled me come up with a potential business which I can establish in future. It has shown me the gap in this food industry. Beef sausages combined with chicken smoked sausages can be profitable. The most challenging activity was the SWOT analysis. It took me time to come up with strengths, weaknesses, opportunities and threats possible in this business area. Additionally, it has been stressing to come up with a break-even point for the two products product and for the entire company. In general, this assignment has enabled me remember lectures and encouraged me to think widely as a business student.