Case Study - Online Media Solutions

Online Media Solutions is a marketing and web development business based in Melbourne, Australia. From idea to design, development and marketing, we achieve results for our clients and grow their business. We have ventured into the web service industry to offer our superior and unique services to small businesses and organisations. Our experience and expertise in web sales and ecommerce give us the backing to provide solutions that are currently lacking in the market. There is an all-time high demand for web development and marketing for small businesses with signs of rising further. Interestingly, few web developers have taken advantage of this opportunity, leaving the industry with no dominant provider. The high costs of the projects and the focus on more prominent companies and organisations could be the contributing factor as to why this market remains untapped. We have a system that will reduce the project costs dramatically, giving us the opportunity to offer quality services at reduced prices.

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q---The requires to report on key aspects of the business and make variances to the business plan.

Report on current processes and systems

• Version control information
• An introduction to the project
• Table of contents
• The main body of the report
• covering the following topics: --
• System failures
• Product and service failures
• Variations required to the business plan and reason for variations
• Recommendations to address system and product and system failures
• Summary and review
• Glossary
• References

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Report system failures, product and service failures and variances to the business plan information use for report :-----

When it comes to the failure of a business, there can be many and varied causes which could come from both the external environment and from factors internal to the business. External reasons are not natural to predict and can be harder to be seen in advance. It is also quite rare for one single factor to be involved in the failure of the business as often it will be many causes coming together at the right time to detract from the success of the business. Internal causes of business system failure Problems that are 'internal' to a business are more likely to be predictable and can be anticipated as potential threats to the viability of the business. These internal causes can better inform your business plan, allowing you to place contingencies to minimise the risk of failure to your business. Poor Management Poor management is the most commonly occurring 'internal' cause of business failure with other internal causes often inevitably being linked to this cause. This type of cause is used here in a broad sense to refer to the failure of the management of an organisation to ensure problems are identified promptly and that the correct solutions are applied for continuous improvement as part of your business plan to give the business the best possible chance of growth and survival for the organisation. Management competence is an issue for businesses of all sizes since it is management which is invariably responsible for making all the relevant financial and commercial decisions for the business. However, with smaller organisations, it is less likely they will have the specialist financial skills and experience in-house for which vital decisions have to be made that best serve the organisation's commercial interests. Managing a successful organisation requires not only good creative and operational skills but good business skills as well. However, good your products and services may be, many business owners do not always have skills and experience in areas such as business planning, financial reporting, marketing, customer relations and financial management. It may come too late for some businesses to realise they don't have the right in-house skills, therefore requiring the need for specialist advisors or business skills training at the management level. The training requirements will then form part of your business plan as the need arises, thereby allowing for management to track and assess the business strategy is current and up-to-date. The first three years for a new start-up business are both crucial and challenging for the viability and success of the business. A high proportion of new businesses fail during this initial period. The risk of failure stems from the fact that the organisation has to prove itself quickly, with its customers and suppliers, providers of finance, employees and possibly outside investors and stakeholders too. To get through this challenging period, a new business will need to make sure that it prepares an accurate business plan. Any lack of a track record of the commercial viability of the business will mean that any prospective commercial lender or investor will look upon it with some caution, and will invariably attach stringent conditions to any loans which it is prepared to advance.

Deficit in Accounting The decisions of a business need to be backed up and supported by good quality financial information and must be relevant and user-friendly and made available promptly. Insufficient or poor accounting and reporting can affect decisions made if based upon inaccurate or incorrect financial information and can cause problems which may threaten the solvency of the business. When an organization is operating with poor bookkeeping practices which do not comply with recognised accounting principles, they risk incurring penalties from the regulatory authorities. This can apply in many financial areas, from general ledgers, account receivables and payables, to indirect and direct tax, such as; VAT books, VAT returns, income returns and other indirect taxes. This can sometimes lead to an inspection from fiscal authorities, which can last for a few months and cause considerable stress and undue burdens on the business which can slow down the routine activities of its daily operations. Also, poor accounting increases the risk of the business, not being aware of significant problems. Like high fixed and variable costs, reductions in sales and incorrect revenue as well as other financial issues. By recognising these elements too late, and by not acting promptly to rectify the situation you can cause long-term damage to the solvency of the business. Poor quality or misleading accounting information can result primarily from two factors: it can be driven by tax considerations or by mistakes made by management in the financial decisions of the business. The long-term mistreatment of recognised accounting principles in areas such as depreciation, bad debt and stock control can lead to a decline in business performance. These poor accounting practices will also be reflected in the company's statutory financial statements, if not corrected. If the accounting is not by recognised accounting principles, the financial statements will not give a 'true and fair' indication of the financial position of the business, and of the results of its operations and its cash flow. When the business is audited, this could cause a 'qualified opinion', a 'disclaimer of opinion' or 'adverse opinion' given by the auditors which would prevent the business from obtaining loans from banks, as well as other financial impacts on the future success and solvency of the organisation. Poor cash flow management One of the most common internal causes of business failure is poor cash flow management and implies an imbalance between the payment terms taken by debtors and those given to creditors. With the most obvious outcome of poor cash flow management being a significant decline in cash, with the business being unable to cover its repayment obligations with either bank or investor loans, or towards suppliers for the purchase of goods and services. The inadequate management of inventory and Work In Progress (WIP) can also lead to cash flow problems with the ultimate result being the lack of working capital to run daily activities of the business. Inappropriate sources of finance Extreme reliance on loan finance can test the business's cash flow position, leading to excessive obligations for the company to repay capital and associated interest, especially when loan conditions allow the lender to vary interest rates. If the company starts to experience financial difficulties, insufficient risk capital will only worsen the situation, as the existing loan capital may prevent raising further debt finance. This can result in the unbalanced mix of risk and loan capital which can cause threats to the solvency of the business. Dependency on customers or suppliers Businesses can take on a high level of risk when relying on only one customer or only one supplier, especially in the event of their only customer or supplier going out of business. The withdrawal of orders can cause gross margins to drop significantly, which in turn can see .

immediate reductions in sales. This can cause the whole future of the business to be at risk due to the decrease in the market for your products or services. Impending bad debt Impending bad debt is one of the probable and possible causes of business failure that is capable of being predicted in advance, with the significant increase of risk being due to the disappearance or insolvency of a customer. The impact of impending bad debts is the leading cause for alarm for businesses, with not being able to predict the risk through an in-house credit collection department which would be able to undertake regular credit control activities, thus allowing for the follow up of matters of ongoing concern. For this reason, bad debts may have a dramatic impact on small to medium businesses than and can lead to the insolvency of the business. Overtrading A business can take on extreme risks when planning on excessive expansions and rapid growth with over-committing its capability to cope with the impending changes which can threaten the overall success and survival of the business. Poor marketing and research A lack of adequate and appropriate market research can be a frequent cause of failure for a start-up business. This market research will inform the business about their competitors and the possible reactions to the new business in the marketplace. When starting a business, it is essential for the business to identify their customers and inform them of the size of the potential customer base, to determine what price customers might be prepared to pay and to suggest how demand for the product or service will change according to the amount charged. More established businesses will have addressed some of these marketing issues with the need to be constantly aware of how the marketplace is changing. By keeping informed on what their competitors are doing and planning, as well as looking at potential new entrants to the marketplace and how they will affect their trade. For a new business, this market research information is vital to enable the company to calculate whether it will make sufficient gross margins to cover its overheads and financing costs and create an adequate profit. Fraud and Collusion Another significant cause for the failure of a business is fraud and collusion, and when not detected in good time, can also cause substantial financial loss and reduction of business performance. One most typical case of fraud is when employees are falsifying expense reports, or are stealing small unit-value items, such as stationery or cleaning products. There can be significant losses when such thefts happen regularly and are left uncontrolled by management. With employees making secret agreements with a supplier for deliveries to be lower than actually indicated on invoices, and the employee being paid remuneration for these differences. As well as other secret deals being made by an employee responsible for treasury with the banks operating with the business, which can lead to fraud being committed by the parties involved. Additionally, fraud can also be perpetrated by the owner or their spouse, directors or by a trusted advisor. On the other hand, collusion with the stakeholders of the business can also have serious consequences.

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Product and service failure

Targeting the wrong market :----As we all know, products are made according to the requirements and expectations of customers, but somehow if marketed in a non-sustainable environment then you take the risk of your products failing to reach your target market. Poor quality of the products If the product is not made according to the expectations of users or it is not user-friendly, then there are risks associated, and you take on the chance that the product may fail in your target market. Customers do not exist Suppose you make products that are cheaper than your competitors, but they still fail due to a lack of customers needing or wanting your particular products. Poor implementation of the marketing plan Lack of research information as part of your marketing plan can cause significant losses in sales from your target market. You may have a product that is not reaching the right customers because of poor implementation of your marketing plan, causing this to be seen as product failure. Lack of product uniqueness When making products according to the expectation of the customers, it is not only about meeting their needs and being user-friendly you also need to have unique features to the products that will help your products reach your target market. Product deficiencies Your products may be developed with full uniqueness, but there are still some features which are not attracting customers to you in comparison with the response to your competitors which could lead to your products failing to meet the needs of the target market. Lack of demand Your products may fail due to the lack of demand in the marketplace at a particular time. This is why you should have a marketing plan that can be updated as the market and customer requirements change to minimise the risk of product failure. The higher price of the product When dealing with customers it is not always about quality and a unique feature to your products, for some, it is about cost and why would they pay more for a product they can get from your competitor at a lower price. This will impact on the success or failure of your products. Limited options For some customers, this may be the simple fact of limited options in regard to demand and supply of products. This may be due to the location of customers as well as the lack of suitable businesses that supply the required product.

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Business performance reports An important tool to report business performance is a business performance report. This provides an overview of how the business is performing.

Business performance reports provide an overview of the performance of the business. The data is collected from the different sections of the business and complied to identify the areas of successes and failure. Variance report A variance report compares planned financial outcomes with the actual financial outcome. Variance is the difference between the budgeted/baseline goal and the actual reality. This can be expressed as a per cent or a dollar figure. How to write a variance report: To write a variance report, you must complete the following steps: Report system failures, product and service failures System failure, products and service failures need to be reported. Reports need to be prepared based on the analysis conducted. To prepare the reports, you need to: Measure the progress towards marketing objectives of products and services Monitor system failures, product failures and variances to your plans as the implementation occurs These failures should be reported according to the organisational reporting procedures. Written reports need to be prepared.