Koala And Kiwi Travel And Tours Shop: Business Scenario And Factors To Consider

Discuss about the Koala and Kiwi Travel and Tours Shop business scenario.

Factors that need to be considered in selecting or using appropriate business structure

Australia is big, bold and full of adventures.  It is full of contrasts with its bright blue skies, deserts and sun bronzed beaches providing the great opportunities to tour and travel organizations. Koala and Kiwi Travel and Tours Shops will save the clients time and energy with providing most suitable deals of travel. It works for you and it’s our duty to plan your holidays on your behalf.  We aim to satisfy all your travel needs while getting the value of your valuable money and time (Nomadic Matt’s Travel Site, 2018).

Economic Factor

Any business requires money for its operations. The economy has an important impact on the smooth functioning of the organization. Price of luxury goods and services decline with recession. Prospective market situations and other external factors should be considered to get the maximum with minimum cost.

Size 

Size is one of the important components that affect the size of the design. Size defines the number of workers of the organization. The size and operational scale are to be considered in determining the business structure of the organization. The structure of large companies and small companies differ in terms of division of labor, rules and regulations, budgeting and performance appraisal procedures.

Environmental Factors

Environmental factors like resources, competitors, political and social issues are important in designing the business structure. The organization has to meet the industry standards, has to interact with its suppliers, government agencies and distributors to survive and grow.

Technological Factor

Technology affects the organizational structure by improving the communication between the employees. Technology can be used to boost the productivity with optimum utilization of resources at low cost.

Strategy

Strategy of any organization means the way the business presents itself to its stakeholders. Strategy affects the business structure as the strategies are followed to achieve the objectives (Teacher, 2018).

Advantages

Complete Control

In sole proprietary the owner will have complete control profit and loss. The owner can himself decide the working timings, holidays and packages for the clients to attract the people towards the organization.

Easy to start and close

Starting such a business is simple as no registration from government bodies is required. The owner has the sole decision to start, relocate or close his business entity.

Low cost formation 

You can start the travel company online with very few employees and just the capital is required to start the firm.

Advantages and disadvantages of a sole proprietary

Disadvantages

Lack of resources

As there is less people involved and no legal registrations are done. It is difficult to make people trust the organization. It is also difficult to get loans from the organizations to meet the financial requirement of the firm.

Unlimited liability

In sole proprietary the owner’s personal property is dissolved to clear the debts if the service or any package tour plan creates a huge loss to other person (Startupfreak, 2014).

Advantages

Higher Capital

Capital is higher than sole proprietary as more persons are involved. The more exciting business deals of tour and travel can be implemented with higher capital.

Higher innovation

There is unlimited managerial ability as many partners give different views and opinions about different offers and deals to attract more number of customers.

Better Decision

There is less chance of taking wrong decision as there is specialization in taking decisions.

Reduced risk

The partners bear the risk of failure of deals in right proportion

Disadvantages

No personal contact

A partner cannot personal contact with its customers and staff. He can’t customize the offer for any customer individually.

Delay in decisions

The partners are required to consult and take the decisions with approval of all the partners that makes the decision making process time consuming.

Danger of conflict

There can be dispute in partners due to misunderstanding or other reasons that may cause problem in operations of the business organization (Tyrocity, 2018).

Advantages

Transferability of shares

The shares of company can be sold at any time to anybody that increases the liquidity and attract investors towards the shares of the organization. It also increases the trust of people towards the firm. And trust is an important factor for company providing services like travel packages to customers.

Stability of existence

Change of ownership or death of any director does not affect the continuity of the business.

Efficient management

Companies hire professionals for its functional areas as it has good financial strength. Marketing professional play an important role for Travel Company to attract individuals with more exciting deals.

Disadvantages

Difficulty in formation

The formation of a company is difficult and time consuming. Preparation of documents required and completing the legal formalities requires a lot of time and money.

Lack of secrecy

All business strategies are discussed in the meeting. The annual accounts are required to be published in journals (Reddy, 2012).

Annual Reports 

The organization should prepare proper annual financial report of the business. And should also collect and analyze the financial annual reports of the competitors.

Advantages and disadvantages of partnership

Financial strength

The directors should have a detailed list of all the financial strengths of the organization. So that it can be demonstrated to the customers.

Financial statements

Financial statements can be defined as the report card of the business, to keep track of your finances you need to create financial statements properly (Murray, 2017).

Travel Insurance

The knowledge of travel insurance along with its kinds is required. So that you can better explain its benefits to customers. Travel insurance includes travel health insurance, medical evacuation insurance, trip cancellation insurance etc.

Natural calamities 

As a travel agent you should be aware about the natural disaster prone areas and the calamities happened in recent times.

Legal duties

You should also be aware about the various legal rights and duties related to different areas (The Balance Small Business, 2018).

SapphireOne 

SapphireOne is unique business software that keeps records of sales and purchases. These records can help in setting up CRM System. The managers can reload any accounting information whenever required. It helps in managing accounts properly with the help of customer tracking invoice management and activity analysis. It provides a clear and accurate view of financial position of the organization.

Sage

It helps in calculating and submitting VAT returns, manage income and expenses and reconcile bank statement with accounts (Sapphireone, 2018).

Going Concern Principle

Based on the financial strength the business can state that company will exist to carry out its objectives and commitments towards travel to its customers.

Matching Principle

The company uses the accrual basis of accounting. The expenses of the company are matched with the revenues (Accounting Coach, 2018).

Economic entity assumption

The business transactions are kept separate from the business owner’s personal transactions.

Revenue recognition Principle

Revenue of the company will be recognized as soon as the service will be performed, regardless of actually receiving the money. It works under the accrual basis of accounting (NIOS, 2018).

Conclusion

Koala and Kiwi Travel and Tours Shops will save the clients time and energy with providing most suitable deals of travel. It works for you and it’s our duty to plan your holidays on your behalf.  We aim to satisfy all your travel needs while getting the value of your valuable money and time. With the use of accounting software and following the right principles it will enhance the customer value but adding value to their tour packages.

References

Accounting Coach. (2018). Accounting Principles. Retrieved from https://www.accountingcoach.com/accounting-principles/explanation

Murray, J. (2017). Financial Statements for Business Plans and Business Startup. Retrieved from https://www.thebalancesmb.com/financial-statements-business-plans-397551?utm_term=what+is+in+a+financial+statement&utm_content=p1-main-1-title&utm_medium=sem&utm_source=msn_s&utm_campaign=adid-7c63940a-ad3d-4602-90a7-c130b6f42b60-0-ab_msb_ocode-22874&ad=s

NIOS. (2018). Basic Accounting Principles. Retrieved from The National Institute of Open Schooling: https://www.nios.ac.in/media/documents/VocInsServices/m1-5f.pdf

Nomadic Matt’s Travel Site. (2018). Australia Travel Guide. Retrieved from https://www.nomadicmatt.com/travel-guides/australia-travel-tips/

Reddy, P. (2012). What are the Advantages and Disadvantages of Joint Stock Company? Retrieved from https://www.preservearticles.com/201101183549/advantages-and-disadvantages-of-joint-stock-company.html

Sapphireone. (2018). Most Unique Accounting Software. Retrieved from https://www.sapphireone.com/accounting-software/accounts/

Startupfreak. (2014). Avantages and disadvantages of sole proprietry. Retrieved from https://www.startupfreak.com/advantages-and-disadvantages-of-sole-proprietorship/

Teacher, U. (2018). FActors affeting organizational design. Retrieved from Universalteacher.com: https://universalteacher.com/1/factors-affecting-organizational-design/#

The Balance Small Business. (2018). Tax Planning Issues. Retrieved from https://www.thebalancesmb.com/tax-planning-for-issues-4161430

Tyrocity. (2018). Merits and demerits of partnership firm. Retrieved from https://notes.tyrocity.com/merits-and-demerits-of-partnership-firm