Casey’s Gifts Assignment

Casey’s Gifts Assignment

Building Renovations

Ms. Casey’s decision on whether or not to renovate the existing building depends on a few major assumptions. One assumption is that Ms. Casey has the resources available to implement marketing and sales tactics make a possible increase in sales realistic. The other major assumption is that a new store opening next door would cause a major decrease in sales, making a loan payment challenging, thus risking the financial stability of the company. While there are some options available to allow for more cash flow, such as Ms. Casey reducing her salary, major risks remain.

Ultimately, Ms. Casey truly believes that a newly renovated building is necessary for the company to continue to succeed. While a new store opening across the street may hurt sales and expose the company to financial difficulties, renovating the store may improve the company’s ability to compete with the new store, limiting decreases in sales. Not renovating the store may actually prove to be a worse option, because a newly renovated store would provide customers a new experience and could provide Ms. Casey new marketing platforms to promote the store. As displayed by the spreadsheet, Casey’s Gifts can save money if Ms. Casey is willing to take a cut in salary. One way to alleviate the risk of losing sales and falling behind on loan payments is for Ms. Casey to reduce her salary, allowing company to save money or invest in marketing.

While the risk of renovating and taking out a loan is evident, the long-term viability of the company will require a building renovation. It would benefit Ms. Casey to renovate the building now and allocate additional resources towards marketing in an aggressive strategy to increase sales, rather than hope to survive a major decrease in sales with a new company entering the marketplace.