Ny Bagel Company

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Decision Objectives: • Mel Green should have more time for himself and time to grow his business. • He wants to maximize the returns on his investment. Decision: a. Leave the stores as it is. b. Employ a baker/supervisor for the Downtown store immediately. c. Restructure the business with a view to making a push towards getting more wholesale customers and using up the spare capacity of the downtown store. Reasons for my decision: 1. Additional sales of just $20,000 will result in a positive cash flow when the business is optimally staffed. This projected $20,000.00 only takes into account the two customers who are currently interested in buying bagels from NYBC. His does not take into account the third customer who wants to buy unbaked bagels. 2. I believe that Mel Green’s marketing experience will result in revenues far greater than the $20.000 used in the proforma profit and loss account. 3. Concentrating on the wholesale business will increase revenue without increasing labour and overhead costs significantly. 4. Both stores are located in prime locations and offer high visibility, closing any of the two stores will lead to a loss of the competitive advantage these prime locations affords the business. Conclusion: The decision meets the objectives because; • Mel Green has time to use his experience to grow the business and time for himself. • The business is still profitable and has potential for growth New York Bagel Company Profit and Loss Account as at December, 1999 Notes Main Store West-End Store Wholesale Total $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 Turnover 225.00 325.00 125.00 675.00 Cost of Goods Sold Materials 75.00 108.33 41.67 225.00 Manager 22.10 22.10 - 44.20 Driver - 1.50 11.00 12.50 Baker 1 - 22.10 - 22.10 Counter Staff

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