Areas of Concern to Ensure Business Success Case Study

Areas of Concern to Ensure Business Success - Case Study Example Finally, they are often unable to raise sufficient funds as they only rely on their own ability. Â  Diversification is a method used in spreading risk. In the case of Jones Electrical Distribution, the business is only in operation during summer and spring when the weather is conducive for construction work. He should expand operations to ensure that business activity is not faced by seasonality. He should try other products that sell throughout. Â  Having a fewer supplier helps in cutting down distribution costs and the degree of logistics of the company. Consistency in the quality of materials supplied is also assured. This also reduces the number of customer complaints and establishes an intimate relationship with the supplier. In addition, the supplier aims at pleasing the customer because of the huge quantities by giving discounts. It’s not fit to have a single supplier though because if the supplier is adversely affected by an event, the business is also affected. The supplier might also become complacent since he knows you cannot get a better supplier than them. Â  The $350,000 line of credit is not enough money for the business. Looking at the 2007 balance sheet, the amount of financing required in more than $350,000. The business requires twice the amount in order to bring its liquidity to an acceptable level. Â  Alternatively, Jones can consider using profits of the business as a source of finance. Secondly, he can borrow from friends at agreeable interest rates.