Gel Assurance Insurance Plan

This paper provides an outline of Gel Assurance Insurance PLC’s market strategy. Which includes the firm’s goods and services, maps of accounts, and the effect of the regulatory climate on the company’s activities.

Gel Assured Insurance PLC is a new insurance company that specializes in providing pet insurance. The company was founded for the sole purpose of providing insurance services with high standards of integrity while adhering to the existing ethics. It necessitates complex and nuanced business practices, and with the market’s fierce competitiveness, diversification in the manufacturing process would be critical (Adcock, 2010). The firm is equipped to compete in the highly competitive market in the U.S. some of the products and services that will be offered by the Gel Assured Insurance Corporation include pet insurance cover, financial reinsurance, Life and Annuities Insurance and agricultural insurance. In the quest for the enhancement of the firm_x0092_s performance, it will also ensure that it hires only skilled and qualified employees. A suitable rewarding, benefits and recognition system will be incorporated to help in bolstering job satisfaction levels within the company. Good leadership and a collaborative communication will also be vital in creating a suitable workplace environment. It should also be noted that integration of e-commerce will help in boosting the firm_x0092_s sales (Farhoomand & Conley, 2003). Finally, all the staff members will have to abide by the set ethics codes of conduct. With the high employee-motivation levels and workable business models, Gel Assurance Insurance PLC will find it easy to penetrate the U.S. insurance market and improve its financial performance.

Form of business

As a startup pet insurance company, Gel Assurance Insurance will come along with various benefits. The creation of the business will be in line with the Company Act 2006. As a form of business, the firm will be incorporated under the American laws as a private limited company. In the future, it, however, plans to transport into a public limited liability organization, and in the process, it will be listed on the New York Stock Exchange. Some of the benefits of that the company_x0092_s status as a private limited will enjoy will include tax advantages, thus a decline in the costs of production, as an own legal entity, it will enjoy permanent succession, and it will also receive funding from both financial institutions and interested investors.

Chart of accounts

A chart of account for the Gel Assurance Insurance will entail a listing of all the accounts that will be used in the general ledger for the firm. Below is the chart of accounts for the company.

Balance sheet account

Assets (cash, inventories, account receivables, fixed assets)

Liabilities (accounts payable, wages payable, accrued liabilities)

Shareholders_x0092_ Equity (common stock, preferred stock, retained earnings)

The balance sheet will be essential to the firm in the determination of its financial position. It will also be vital to the investors and customers in their decision-making process on whether to be a part of the company or not. The manager and employees will use the balance sheet in the determination of the suitability of adjustments in the business practices.

Income statement account

Operating revenues (revenues, sales)

Operating expenses (advertising expenses, cost of goods sold, administration fees, wages)

Non-operating revenues and gains

Non-operating expenses and losses

Rationales for the selection income statement are the benefits that it will bring to the firm when embraced. The income statement will show profits and revenues generated by the company over a given period as well as the losses. Managers will also use it in the determination of expenses incurred by the firm.

The use of GAAP by the business

Gel Assurance Insurance Corporation will abide by the set GAAP accounting regulations in its daily operations. In line with the principles, the company will be required to ensure that it appropriately maintains its financial records, incorporate transparency and integrity in its financial transactions, ensure that there is consistency in its accounting and that long-term and short-term financial decisions that it makes are in line with the GAAP. Adoption of the Generally Accepted Accounting Principles will play an instrumental role in enhancing the company_x0092_s financial performance and bolstering its reputation. It will be easy for the company to compare its financial statements with those of its rivals and this will help it gauge its performance in the market. By meeting the set GAAP regulations, several investors will be attracted to channel their investments to the firm and this will in return bolster its financial performance (Brigham & Ehrhardt, 2017). It will also help the firm transform from a private entity to a public company, thus growth in its productivity. Adjustments in the books of accounting will have to be approved by the Chief Financial Officer and will have to be in line with the provisions in the GAAP. High level of accuracy will have to be applied when making any changes on the company_x0092_s financial records.

Preparation of the company_x0092_s pro-forma balance sheet and income statement

Balance sheet in $

2017 Assets Current Assets   Cash 12,573 Accounts receivable 1,123 Inventory 835 Prepaid expenses 236 Short-term investments 1,276 Total current assets 16,043 Fixed (Long-Term) Assets   Long-term investments 1,100 Property, plant, and equipment 14,756 (Less accumulated depreciation) (2,200) Intangible assets 2,145 Total fixed assets 15,801 Total Assets 31,844 Liabilities and Owner’s Equity   Current Liabilities   Accounts payable 9,850 Short-term loans 234 Income taxes payable 3,145 Accrued salaries and wages 5,650 Total current liabilities 18,879 Long-Term Liabilities   Long-term debt 2,350 Total long-term liabilities 2,350 Owner’s Equity   Owner’s investment 8,560 Retained earnings 2,055 Other Total owner’s equity 10,615 Total Liabilities and Owner’s Equity 31,844

Income statement in dollars (2017)

Revenue Sales revenue 123,000 (Less sales returns and allowances)   Service revenue 65,000 Total Revenues 188,000 Expenses   Advertising 1,250 Bad debt   Commissions   Cost of goods sold 61,000 Depreciation   Rent 2,300 Interest expense 4,700 Maintenance and repairs   Office supplies 5,230 Payroll taxes   Rent   Research and development   Salaries and wages 47,000 Software   Travel 1,250 Total Expenses 122,730 Net Income Before Taxes 65,270 Income tax expense 14,936 Income from Continuing Operations 50,334 Net Income 50,334

Assumptions made

The amounts in both the balance sheet and income statement are hardly affected by external factor

Depreciation of tangible assets such as equipment and property is included

There is a variation in the financial figures

Valuation assigned

Based on the financial statements, it is evident that, in its first year of operation, Gel Assurance Insurance Company will enjoy a strong financial position. Revenues generated stands at $188,000 while net profits are given by $50,334. The company, according to the balance sheet, will majorly rely on shareholders_x0092_ equity ($10,615) as a source of fund for its operations. Apparently, this will be a good start and promising results for the firm.

Internal controls to be used in property management

Internal controls refer to all the methods that the company will embrace in the protection and safeguarding of its assets. They will also help the firm conduct its business operations lawfully and without interference. The tangible assets within the company will be protected using physical internal controls such as locks, perimeter fences and installation of video surveillance to bolster security. Access of information technology will be done using biometrics, keys and passwords and this will be instrumental in the eradication of hacking and data loss. Other internal controls that will be adopted by the organization will be well-written policies and procedures that all employees will have to abide by (Brigham & Ehrhardt, 2017). They will help in the protection of the intangible assets within the company. Adjustments in the books of accounting, for example, will have to be in line with the required principles. A regular audit will also have to be conducted in the firm with the aim of ensuring that all operations are smooth and that the valuation of both tangible and intangible assets is appropriately done.

Implementation of internal controls

The implementation of the physical control will be simpler since not all employees will have to be involved in the process. After drafting all the requirements and the costs for each activity such as purchase of CCTVs, erection of perimeter walls and purchase of locks, the finance department and the board of directors will have to approve before releasing funds. The funding of the integration of physical controls will be derived from both debts and the company_x0092_s retained earnings. Upon implementation, the physical internal controls will be beneficial to the firm both in the long-term and short-term.

Drafting of policies and procedures will be the first step in the implementation of the non-physical internal control systems. A campaign awareness program will then be carried out with the aim of educating the workers on the set policies and their essence to the firm. All departmental managers will be required to ensure that the policies are implemented in their departments within two weeks. Upon implementation, employees will be required to provide feedback on the set internal controls (Brigham & Ehrhardt, 2017). It should be noted that the policies will receive resistance from pockets of employees. Overcoming this challenge will call for the managers to continue educating the workers about the significance of the set policies and procedures.

Impacts of the regulatory environment on the business

The regulatory environment will impact the firm_x0092_s business operations in various ways. First and foremost, the company will ensure that its goals and objectives are met by adopting some of regulations such as the Sarbanes-Oxley Act. A regular audit will have to be conducted in the company and this will be in line with the SOX Act. Apparently, this will be vital in ensuring that the company maintains a high level of transparency and integrity in all its financial transactions. In line with accounting regulations such as GAAP, Gel Assurance Insurance will be on the frontline in ensuring that all the figures in the financial statements are accurate and a true reflection of the firm_x0092_s performance (Brigham & Ehrhardt, 2017). This will help ensure that the company_x0092_s public reputation is bolstered, thus an increase in the consumer demand and investments. The working environment will also be impacted by the regulatory environment in that employees will be required to ensure that they abide by the set rules and regulations.

Conclusion

Based on the above business plan, it is evident that Gel Assurance Insurance PLC will enjoy market sustainability depending on the business strategies that it will adopt. Marketing strategies such as the use of online advertisement and business models entailing clearly set goals and regulation will cement the firm_x0092_s position in the pet insurance market. Integration of advanced technology will also help in bolstering the company_x0092_s operational efficiencies thus an increase in its financial performance.

References

Adcock, D. (2010). Marketing strategies for competitive advantage. Chichester [England]: Wiley.

Brigham, E. F., & Ehrhardt, M. C. (2017). Financial management: theory and practice. Boston (MA): Cengage Learning.

Farhoomand, A., Ng, P., & Conley, W. (2003). Building a successful e-business. Communications Of The ACM, 46(4), 84-89. http://dx.doi.org/10.1145/641205.641210

Williams, J. R., Haka, S. F., Bettner, M. S., & Carcello, J. V. (2018). Financial accounting. New York, NY: McGraw-Hill Education.