The following appeared as part of an article in the business section of a local newspaper:
"Hippocrene Plumbing Supply recently opened a wholesale outlet in the location once occupied by the Cumquat Café. Hippocrene has apparently been quite successful there because it is planning to open a large outlet in a nearby city. But the Cumquat Café, one year after moving to its new location, has seen its volume of business drop somewhat from the previous year's. Clearly, the former site was the better business location, and the Cumquat Café has made a mistake in moving to its new address."
The author argues that the Cumquat Cafe made a mistake when he moved to his new address because not only did his volume of business drop somewhat from the previous year's but also that Hippocrene Plubming Supply, the business that is occupying his previous location, has been quite successful. Although the author's claim may have merit, his line of reasoning is flawed and thus his claim can't be accepted.
The first issue with the author's claim comes from misinterpreting supporting evidence. The author states that Hippocrene has been successful in their location, previously occupied by Cumquat Cafe, because they are planning to open a large outlet in a nearby city. The latter statement isn't enough information to make such a conclusion. It may be that Hippocrene is actually doing really bad business and they are closing down their store and relocating to a nearby city. Maybe they totally miscalculated the chosen location and have zero business coming their way.
The second issue with the author's claim comes from his reasoning that comparing the success of a Plumbing Supply company to the success of a Cafe can lead to any useful conclusion. These two companies are in two different industries and market so it doesn't make sense to compare the success of one to the success of another. Maybe the residents of the old Hippocrene were in dire need of Plumbing supply equipment so they were able to quickly grab some market shares.
The third issue comes from the author not doing a proper analysis of the financials of the new Cumquat Cafe. Stating that the volume of business "somewhat" dropped is not good enough evidence to support his claim. A thorough analysis is needed here and knowing the bottom-line numbers of the Cumquat Cafe at the 2 different locations would be much more useful. Volume of business is an indicator of success. The volume may be high but the costs might be higher. It could be that Cumquat's Cafe is actually more profitable at their new location.
In summary, the author's argument that the former site was the better business location for Cumquat Cafe is flawed. It would be helpful to get and compare the bottom-line figures of Cumquat Cafe current location to the old one. Then from there, it would be smart to figure out the reasons of this drop in profits. If any.
