George's Trains Case Study

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Justin Heinze BUS650: Managerial Finance Week #3 Assignment Dr. Stanley Atkinson November 3, 2014 INTRODUCTION George's Trains is one of the largest and oldest established stores for model trains in North America, and all about model trains - nothing else - and one of the few hobby shops online dedicated exclusively to model trains (George’s Trains, n.d.). He gradually moved from a small go-to repair man for model trains to the owner and proprietor of George’s Trains in Toronto, Canada. This hobby of his eventually required his full-time attention when he found out that there was a potential shop for sale. George Olieux eventually persuaded the “chap” to sell the shop and he moved in eagerly. Beyond that, it was announced to him that the building his shop was located in was put up for sale. This event would require George to make a quick decision on whether or not to buy the building himself or rely on the outcome of the potential buyer. Unfortunately, with his lack of entrepreneurial experience and past career, George didn’t have the required capital to purchase the shop and building on his own. However, due to his great relationship with his bank, he was able to secure a loan. George's style of doing…show more content…
He had a very conservative approach to running his business which allowed him to stay afloat in this industry. Some of the tactics or strategies that George used were: staying current with trending items and adjusting accordingly, keeping a constrained inventory on all items while increasing levels during peak periods, and budgeted well so he would always have enough funds if any unexpected event occurred. The video shows that George’s Trains has adopted appropriate techniques of analyzing working capital practices. Moreover, George’s Trains has been using capital budgeting techniques such as NPV and IRR to appraise working capital decisions and
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