John’s Marina Case Study

Opening Problem

John’s Marina

John, a recently retired business professional from Florida decided to purchase a marina in a small community in Northern Ontario with his life savings. The marina was previously owned by a town local, who after 35 years, was ready to retire and was offering the marina for what John felt was a fair price.

John put up his saving and borrowed the rest from a few friends to purchase the marina. With the marina, John kept the accountant on board, who mainly prepared information for tax purposes.

The property had a large storage unit which could store up to 20 boats inside and several more outside for the winter. As the general area surrounding the marina was quite wealthy, there was always high demand for these spaces from cottagers mainly commuting from the Toronto area. The marina was also used to provide maintenance and repairs for boats during the spring and summer months and employed one full-time mechanic to do this work, and who also helped out in other areas, as needed, such as filling fuel or helping at the store.

There was also an area which could be used to manufacture new boats. The sale also included all the needed equipment and tools to manufacture boats and there was a steady stream of 3-4 boats being manufactured at any time, with 2 workers employed as needed.

The marina had a general store, supplies, a wharf and gasoline pumps. It was also a favourite gathering spot for locals to exchange fishing stories and mingle while having light refreshments. The previous owner spent most of his time here as he enjoyed spending time with the locals, discussing the days fishing adventures.

What must John consider in running the business? Consider both general business and accounting related issues.

Issues for consideration?

Who are the stakeholders and what are their needs?

What are the business units? Assess each separately and collectively.

What are the accounting/strategic/operational considerations in each?

Other considerations?

Who are the stakeholders and what are their needs?

Primary Stakeholder:

John

Need: returned business person, enjoys fishing and water. Is he looking to spend time in Ontario or run the business for profit? What are his needs.