George’s Trains

George’s Trains is a respectable player in the model trains industry in North America. They deal with model trains and not so much of anything else. Attempts to venture into sports vehicles models have been piloted. George’s Trains specializes in the repair, sale of new units, and trade-ins in all models of model trains. To ensure that his business is holistic, George’s also supplements his sales by including provision of merchandise for layouts, sets, scenery, and accessories for models. To ensure that the business continued as a going concern, the firm has adopted vital values to drive its strategies, for instance, integrity, honesty, and fairness. The firm has upheld the standards because it is a family business. The business has clients who come in as individuals looking for toys or collectors who come from many corners of the world. The business maintains a professional team of workers who know their way around model railroading George’s customers are always catered for. 

George’s business came about as a hobby, and George Olieux cannot look back. He started off in a basement and was serving about five shops in Toronto, Canada when his clients noted his craftsmanship and decided to engage him in high gear. His artistry, strong work ethic, keenness, and attention to detail caused George to develop great expertise as far as model trains is concerned. People would line up at his home waiting for him to come from church. One of his clients, Bob’s Toy Trains went up for a sale, and George took it up in 1962 marking the beginning of George’s Trains. His venture grew so well, and in 1976 he took up a neighboring store making his space triple. He even bought the entire building where the business was housed. He grew his business out of passion and honesty. If a customer offered more than necessary, George would politely decline, and he would only take what was rightfully his. His reputation spread far and wide, and his honesty and dedication paid off. 

George’s passion for model trains, though he passed on, has been present for a long time. He was passionate about model trains in 1901 where he started collecting trains. Huge players in children’s entertainment noted and solicited for his services. First there was Disney Studios who were doing a movie and preferred to rent his collection store (George’s 2013). The movie, Magic Christmas will cause any movie fan to appreciate the passion. Marketing in his earlier days was done using magazines and hard copy catalogs. These days it is done using the internet, and things just got better. Model trains can be ordered and delivered anywhere in the world through the use of technology. Before passing away, George had oriented his two sons, John and Richard, into the business and had them take over control in 1981 and 1984 respectively. They had more than a decade of training before he passed on in 1995. The two sons hold the flag that their father raised high. Though they had other interests initially, the two found time for their father’s business and have run it to date. The shops that they have maintained and acquired over the time have become premiere shops for hobbyists. Through continued upgrading, the shops are reminiscent of the modern technologies. 

George’s capital practices are impeccable and admirable. To begin with, he invested where it was worth as well demonstrated by Bates (1990). George was able to make decisions with a futuristic foresight as well as being cognizant of the prevailing conditions. He ensured that his business was trendy as well as poised for the future. He only acquired what the business could make use of, for instance, the store, the building housing the store, and inventory. The bank was also impressed by his smartness and precision in determining what was good for him and the future of his business. 

The pitfalls that waylaid George in his capital practices included investment in the wrong kind and quantities of inventory. He was in the train business, and it was appropriate for him to ensure that he invested in what his clients wanted. Investing in the wrong items would have been critically wrong for him. The other pitfall that he faced was non-commitment to the investments he made. Failure to service his loan according to the plan between him and the bank would have rendered him too risky when it came to borrowing. This would have in effect made him non-suitable for lending to. Being committed to a financial plan between a business and the bank does not entail just making the payments on time. It involves ensuring that the money goes to the intended function and generating incomes reminiscent of the plan. 

From the video, the cash flows for George’s Trains would be as follows; 

Cash flows from operating activities 

•    Purchase of inventory

•    Sales

•    Salaries 

•    Utility bills

Cash flows from investing activities

•    Cash inflows from bank loans

•    Cash spent on purchase of a business

•    Cash spent on purchase of building

•    Loan repayments  

Cash flows from financing activities

•    Payment of dividends to the owner (George)

References

Byrd, J., Hickman, K., & McPherson, M. (2013). Managerial Finance. San Diego, CA: 

Bridgepoint Education Inc.

Bates, T. (1990). Entrepreneur human capital inputs and small business longevity. The review of Economics and Statistics, 551-559.

George’s Trains (2013) retrieved from website http://georgestrains.com/about-us/ on December 27, 2017.