... the information available from the first shop, historically losses are heavy on expansion, are these losses acceptable and can the original shop support both ventures whilst this negative income period is passed and if there is a problem with customers at the original venture is there enough cash in reserve to carry the two shops. Problems with existing customers can be influenced by forces outside the control of the owner, these may be economic (interest rates, inflation), political (policies, taxation) or changes nationally in buying patterns this again would mean the need for cash reserves to carry the shops if there are any problems. The real question is why expand, the shop currently pays a reasonable salary to the owners and still makes profit each week. If Jason and Emma wanted to increase profitability overall it would be better to put off expansion and concentrate on the cost of sales at the ...

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