Reference no: EM132590912

Misfitz Inc. is a small, private company specializing in non-dairy ice cream treats. Aurora and Lokee Pine, a married couple, are the owners of Misfitz and are very hands-on in the running of the company. They started the company almost five years ago. Misfitz caters to people who do not eat dairy due to allergy or preference.

Its vision and mission statements are provided below:

Vision: To provide a place where customers know that they can have a non-dairy treat in an allergy-friendly environment.

Mission: To be customers' first choice for non-dairy frozen treats, made fresh with love.

Misfitz has been successful with a brick-and-mortar store, as well as two ice cream trucks located in Calgary, Alberta. Both the storefront location and the ice cream trucks make all the frozen treats on site. The ice cream trucks are seasonal and operate only from mid-May to mid-September. The trucks visit various locations and can commonly be found at local events and festivals. The trucks are always on the go and use social media to announce their locations for the day.

Aurora and Lokee operate the storefront location, while their twin sons - with assistance of other seasonal staff - each operate an ice cream truck. The twins go to university, and this has been an excellent summer job for them. They expect to get their degrees next spring.

You, CPA, are a consultant who has worked with Misfitz in the past. The Pines are reaching out to you again, as there could be big changes on the horizon. You just received the following email from Aurora:

• "As the lease is up for the storefront location next year, Lokee and I are considering not renewing for another term. To keep the same rent, the lessors want a 10-year commitment. Yes, we know the storefront has been profitable and at capacity for several years, but look at how much less it makes compared to the ice cream trucks! We think food trucks are the way of the future, and we'd like to not be tied to a long-term lease. As we near retirement, it would be nice to not have to work year round! We aren't sure what the plan will be if we close the storefront location - maybe another ice cream truck should be added to the mix? We really need your help."

• You are surprised to hear about the proposed changes. Misfitz has been enjoying a huge increase in sales since the storefront location was profiled by a popular food television show a few months ago. You know the Pines are looking for a five-year timeline at which point they will decide to turn the business over to their sons, sell it, or close down.

Task:

Aurora and Lokee mentioned that they haven't reviewed their vision and mission statements since starting the company five years ago. When they applied for the bank loan to establish Misfitz, they were advised to include mission and vision statements in their business plan. They created them to appease the bank. Now they are unsure whether the statements are still applicable to the current business model.

Question 1: Advise Misfitz as to the purpose of vision and mission statements, and assess Misfitz's current mission and vision statements for alignment with its current business model, given the storefront and ice cream truck operations. Identify any issues and make recommendations for improvements.