Essay on Northern Rush

1622 Words Oct 16th, 2015 7 Pages
Following his investigation into the dorm furnishing industry, James was left with a decision as whether or not to invest his time and money to starting Northern Rush with a group of third year students as his partners. His first option was to maintain the status quo, that is, to choose not to proceed with the venture. The other option open to James would be to proceed with his $10000 investment into Northern Rush. If James chose not to proceed with the investment, he would have the freedom to spend his money any way he wish whether it be consumption, saving or investing in other ventures. As mentioned, he would also have significantly more free time during his summer months to allow him to travel. One advantage of pursuing the …show more content…
As seen in the financial statements, the biggest annual outflow of cash would be the purchasing of inventory. Bedding, the category that must be ordered earliest in advance, takes two months to arrive, meaning two months is the longest time that James would have to wait in order to take his stake in the business. An exit during any season other than summer would likely only take a matter of days as all revenue collection is finalized following shipping of all kits in August. If high barriers existed for Northern Rush, James’ exit would very likely be delayed by the sale of capital or financing efforts by remaining partners to cash him out. Compared to the Status Quo, investing in Northern Rush may present an opportunity for the quicker growth of his wealth as opposed to other safer, risk averse investment due to the unique opportunities available to the company. One of which is its natural and straightforward expansion. With its present niche marketing, Northern Rush is in the unique position to retain their customer base as they age and have different demands. Within the next three years, much of the peers of the student partners of Northern Rush will be graduating. Many of those that haven’t already will be moving out of residence into apartments and houses of their own. Northern Rush could then also very easily target the niche of first time apartment dwellers, offering kits containing furnishing essentials

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