Reference no: EM131824608

Laundromax Business Case Study - Final Exam Essay Discussion

Reflecting on the Laundromax case reviewed by the class, assume (for argument sake) that the fundamental concept represented a viable business proposition and the rapid store roll-out was a rational way to demonstrate proof of concept.

Now, as a well-educated MBA, assume that you have signed up as a third partner with Reese and Mounger at the inception of this venture and have assumed the responsibility as chief financial officer of the business.

Please respond to the following questions relative to your financial management role.

(Note: We're looking for your insight on the financial management of this business - not the business concept itself. So please do not spend your time commenting on the wisdom of the idea, how you would redesign the concept or the scope and pace of the store roll-out.)

1. Describe how you might plan to capitalize and finance this business during the development stage - i.e. until you reach 100 opened stores. How much capital do you think would be required? How much of that amount would you plan as investors' equity capital and how much debt?

2. Describe the financial forecasts and projections you would develop to assist Reese and Mounger in presenting the business plan to potential investors.

3. Describe any financial techniques, measurement metrics, ratios, etc. that you think might be particularly useful in financially managing the activities as the business unfolds.

4. As the chief financial officer of this business, describe how you might attempt to navigate your way through the developmental pitfalls and avoid a financial squeeze?

5. Assume the demise of the business becomes apparent to you after about 40 stores are opened. Describe how you would go about unwinding the business and deal with all the relationships with your partners, investors, creditors, landlords, employees, etc.