MEMO
To: Management Team
From: Jacques Lamoureux, CGA,
Date:
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Re: CRM system, draft financial statements, operational initiatives, and other issues
The purpose of this memo is to discuss the operational initiatives and related risks, the draft financial statements, the CRM system and other issues that have arisen over the past year.
Homes sales and other operational initiatives
Further analysis needs to be done to determine the feasibility of both the home sales and the new candle line. Preliminary research suggests there is a market for scented candles; as several companies similar to FFI report increased sales of up to 5% with the addition of a candle line. However, the sales projections prepared by Mandy show a 20% increase in sales in the first year; this is significantly higher than the results experienced by others within the industry. An evaluation of how Mandy arrived at her projections is required. As it stands, FFI does not have the production capacity to produce a line of candles. Accordingly, a third party contractor will need to be engaged. There are several risks associated with contracting a third party. Specifically, FFI will have less control over quality and the contractor will have access to FFI’s secret recipes for potpourri. Also, the minimum order levels required by the contractors represent the majority of production; this would require a large upfront capital outlay.
The home sales program is relatively unknown to us and will have its own risks. The commission rate should be competitive with other home sales programs so that we are able to recruit and retain consultants. To stay compliant with the Privacy Act (PIPEDA) we will not be able to contact potential consultants from our existing customer listing unless they have given us permission to use their personal information