Jim has obtained close to 50 commercial accounts for cleaning. Most customers pay well, although there are about five customers to whom he has to give reminder calls. If the account goes more than 30 days overdue, he cancels service, and no further services are provided to that customer. So far, he has done this for two accounts, which cost him about $500.
To Jim’s surprise, when he walked into one of the condominium shopping malls, he found notices on three of the stores that they would be moving out. When he talked to the owners, he heard that, in the current round of lease negotiations, the condominium was increasing their rents by over 30 percent, in line with current commercial rates in the neighborhood. Those who were moving out were leasing from the condominium corporation, rather than owning their units.
REQUIRED
How will this announcement affect Jim’s business? How does this affect inherent risk of the 12 commercial accounts that Jim has in this building