Coral Divers Resport

Mr. Jonathan Greywell is contemplating a concern decision in which there be quatern virtual(prenominal) options. He is the owner of Coral souserse use, located in the Bahamas on the island of New Providence. He caters to customers looking for a use package that overwhelms honkytonk. This causa discusses a decline in tax incomes for the three-year period of 2005-2007. His options include selling the hangout, partnering with a nonher concern, centraliseing on exalteder(prenominal) margin disdain, or improve his veritable employment organization to be more(prenominal) competitive. Selling Coral plunkrse repeatThe most signifi set upt reason to sell the business is the declining revenues. However, Greywell would require to find another(prenominal) means of income such(prenominal) as another business venture or a new location for a inter qualifyingable business. Greywell could submit a business valuation done, only since his equity in the business is low, he would not have much(prenominal) left over to jump-start another business venture. Greywell has built a lifestyle around the Coral divers(prenominal) Resort business and enjoys it. At this time, I advocate that he focus on his other options and keep the business. Partnering with Rascals in ParadiseEntering into a business agreement with Rascals in Paradise would change the direction of Greywells business to a more family-oriented business. In improver to rebranding Coral take down Resort to target families, there would be additional uppercase improvement set downs. Cottage renovations would be nearly $50,000. The addition of a playground is estimated at $15,000. The wages expense to hire a chef could vary based on the quality and get wind of the chef. However, making use of an be facility such as the kitchen and dining room would add an additional stream of revenue and would military service to offset the additional be.In my opinion is it unrealistic for the fix to be at 100% capacity on a continuous basis. Therefore, if we look at realistic numbers using historical Coral Reef Resort data, we can reasonably predict a 90% capacity in the high age an improvement over the current 70%. The revenue generated from this increase is approximately $100,000. Another factor to retrieve in making this decision is whether Rascals is worth the 30% commission. The fees for families (i. e. more people per room, etc. ) when comp bed to the operation expenses keep the profit margin the same(p) with the added benefit of a unique identity in the market.Higher Margin back Diving Adventure honkytonk generates a higher margin and therefore it is a impregnable idea for Greywell to consider adding it to the mix of dive offerings. However, it cannot be considered without weighing the risks involved. Coral Divers Resort has an excellent reputation and careful consideration should be given as to how to protect this intangible asset. Adventure dives would withdraw specifically trained and experienced dive masters. Simply training existing employees might pose an additional risk since they arent in like manner stirred up about diving with sharks and also lack experience that might be helpful for safety issues.Within an moments distance away, competitors are already a part of this market and bringing in $cxv per jeopardise dive which is $50 above the regular dive experience. An additional $600 per calendar week can be earned on two days per week with an average of 6 customers each of those days. Despite hiring or training costs and additional $31,200 in revenue can be generated, after the expenses for shark provender and the special dive suit. Perhaps more contingency dive business is possible, yet this estimate would need to remain conservative until the demand can be established and adjustments made accordingly.Improving Existing Coral Divers Resort Greywell should look at running the business more efficiently to see where he can lowe r expenses such as operating costs and both fixed and variable costs. However, improved cleverness alone will solve Greywells current problem of reduced revenue. He needs to be looking at additional revenue sources by bringing in more customers for existing business or new offerings. While it is a good benefit to customers to get free services such as afternoon rides, many of those customers would also present to go.If he had an average of 9 free-ride customers per week pay back only $25 for the ride, he would generate another $225 per week in revenue. He could add a box lunch for purchase, a snack package, or a cocktail option. Having more offerings will help to increase revenue. Although I dont expect these forage and beverage items on the boats to bring in much revenue and could be more work for too little reward. Greywell would certainly not want to be distracted from his core business. Conclusion Greywell should go with the Rascals in Paradise partnership. They can help reb rand and market the resort driving up occupancy rates.While increasing kale through occupancy and additional revenue streams are a positive move, Greywell will still need to solve his issue of high debt in rule to make the renovations needed. In addition, he should already be running the business efficiently and regularly quest out ways to maintain a high level of efficiency. I would not recommend that Greywell lay into the Adventure Diving segment of the business at a lower place the Coral Divers Resort name. The risks of injury are too high and an accident can have a very adverse effect on the business reputation.Also, in my opinion, a family business and an adventure business would serve opposite segments and have different branding messages. Having both under the same resort name will dilute the message and negatively impact the more profitable business segment. Instead, if Greywell feels hot about pursuing the adventure business, I recommend he wait until his partnership with Rascals shows results and then acquire a subsidiary or a divulge business with its own branding that caters to the adventure diving market. This way, his businesses can feed each other and the trade messages for each remain clear and focused.