Lawsons

LAWSONS   Case 2   Memo   Recommendations and Implementation     Show profitability       Find another supplier       Drop financing through FWL       Short Term (1-4 months)     Lawson’s will need to show the capability to be profitable.       Lawson’s will find another supplier.       Medium Term (4-8 months)     Lawson’s proves to be profitable and a line of credit is granted     for tight months.       Lawson’s stops financing through FWL.       Long Term (8-12 months)       Control and Feedback     Review financial statements ensure that there is profitability   and no increasing trade debts.       Be sure that purchasing through FWL has stopped and a new supplier   is acquired.       Ensure that MacKay is making the effort to not withdraw as much   money.       Contingency Plan   If Lawson’s does not comply with the requirements in order to reach an agreement for a loan, the loan will then be declined.   Executive Summary   Paul Mackay is a sole proprietor of a general merchandising retailer in Riverdale, Ontario named Lawson’s. The business strives to have value at competitive prices and targets mainly middle to lower income families. Lawson’s deals with products such as ladies’ wear, men’swear, accessories, home needs, toys, and seasonal items. Since the start up of operation Lawson’s has shown positive earning with the exception of their first year due to all start up costs. The businesses main supplier is a wholesaler called FWL, Lawson’s is required to decide on what to merchandise at two annual trade shows in May and October.   Through the years of operations Paul Mackay’s withdrawals and the assistance of FWL created a considerable amount of trade debt incurred over time placing Lawson’s in a tough financial position. Mackay’s plan is to secure a bank loan with less interest to pay off his current trade debt in order to increase profitability.   Recommendations   Lawson’s current situation requires careful attention because of the amount of debt in the business. To fix…