Westlake Lanes Bowling

1137 Words Sep 20th, 2013 5 Pages
Memorandum
To: Shelby Givens (General Manager)
From:
Subject: Westlake Lanes: How can this be saved
Date: March 10th 2010
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As you know your business Westlake Lanes is currently not performing up to the mark. I think there are a lot of steps we can take for the betterment of the business. There are many problematic issues with the business and I have identified some of the core ones-:
• It feels old, no major renovation done in a long time
• More machines need to be replaced, maintenance expense is on the rise
• Since 2004, Revenues have fallen by 50% and healthy profit five years ago has turned into a loss
• Not targeting the right demographics of people aged
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This option still doesn’t take advantage of the growing population of the youth either.
Option 4: Sell the business
In this case the business can be sold without taking a loss. At the end of 2009 as per the data provided total liabilities are $154,208, assets constitute $191,303 and owner’s equity is $37,095. If we sell the business now, the shareholders can still make some money out of the venture and get out of the business before the situation exacerbates. The disadvantage of this option is a lost opportunity. The main threat of entering in the bowling business is the huge investment in the construction of the building and the lanes, which in this case is already there. The business is on a long-term lease and is paying relatively low rent. You will also be letting go of a 30-year-old brand that people recognize.
Recommendation:
My analysis shows that going for the Lounge option will yield the highest benefit. As per appendix A, we can attain dividends of $ 238,468 within one year of reopening of the lounge even by having average sales. The figure obtained here is the most realistic out of the three cases and yields a healthy return on investment. Raleigh North Carolina, which has grown at a very high rate in the last ten years, also has a huge youth population, which is our target market. The location of the bowling alley is in

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