Owning a boatyard is indeed a great challenge especially if youre practical contact is more on technical rather than functional experience like dealing with accounting numbers; but this technical experience will serve also as an asset for bates as he has a wide exposure on the different know-how of the operation side as may be compared to other buyers who may not have any idea at all about the business model and processes. bates being a thrifty person will be an advantage on his part as it may help him control unnecessary expenses thus increases cash flow. negotiation is another advantage for bates as he has more control over the situation. the seller being wanted to retire will be willing to sell the boatyard into a reasonable price just enough for him to enjoy his retirement. bates will be dealing with a lot of business challenges/risks to manage; such as the high level of uncertainty on what kind of accounting records or financial system should bates kept. bates does not have any practical exposure or experience to accounting and added to that the business which he purchases does not have any proper accounting system. bates has limited accounting records from the bookkeeper which were cash disbursement and cash receipts only. bates needs to establish a proper cost accounting system. the system which he needs to set up must be suitable to identify and assign the cost to each department/product/services he is going to offer. bates needs to implement segmental reporting for each of the departments so he can fully assess the contribution and profitability of different departments by comparing the percentage revenues and percentage cost that they generate. once bates will apply the segmental reporting he can now fully identify which products/services are contributing to the profitability or the losses of the business. at the same time it can help him justify the removal of the unprofitable products/services and most importantly he could identify and focus on the core products/services of the business. bates having multiple products/services would need to implement a computerized accounting system. using this system bates will be able to track more the accounting records properly for general ledger accounts payable account receivable cash management fixed assets bates can also avoid the risk associated with manual recording which is more prone to human error disorganize to locate and can be easily misplaced. additionally bates can also benefit from the usage of an inventory management system to keep track of the inventory level achieve efficiency and productivity in operations minimize costs maximize sales and profits integrate entire business automate manual tasks and keep customers happy. bates needs to conduct a cost-benefit analysis on the other products/services which he intends to offer as value-added services to his customers like the fishing tackle sporting goods and refreshments to his retail shop. bates must identify first if these products/services would add more value to his business. every inventory that will sleep in his store/warehouse would mean additional costs thus he needs to be careful of what items product category to sell. bates needs to study also the season/weather of maine and which seasons is his business more profitable so as for lean seasons he may opt to introduce new products/services that are more appropriate and at the same time he can segregate the duties/support needed/demanded by each customer. bates needs to establish proper scheduling concerning on the people group management thus he can minimize overtime charges and premiums. lastly bates needs to be careful about the contract technicalities associated with the borrowing of money from a friend especially on interest rates surcharges and mortgage conditions. given the fact that he borrowed money from a friend we could also suggest to him why not make the friend as a business partner in this way he will have lesser monthly/quarterly/yearly expenses. but of course doing this action might reduce his accounting profit but in the long run it might help avoid/minimize the risk of property closure. bates needs to ensure that his profit would be greater than his obligations.
Bates Boat yard Essay
Words: 676, Paragraphs: 1, Pages: 3
Paper type: Essay
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Bates Boat yard. (2019, Nov 14). Retrieved from http://paperap.com/bates-boat-yard-best-essay/
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