Starting your own Business: Case Studies

PLEASE READ THE FIVE CASES ATTACHED AND SOLVE THEM AS PER INSTRUCTIONS AND SUBMIT ON SAFE ASSIGNMENT VIA BLACKBOARD. Summary for each Case Study is required. Case Study 5: Entrepreneurship Stories (5 mini case-studies) Wendy’s Hamburgers (Success Comes from Listening to Customers) The founder of Wendy’s International was Dave Thomas – a man who made his first million dollars as a Kentucky Fried Chicken franchisee owner (Dave invented the rotating bucket sign that stands outside many KFC restaurants). Eventually, however, Dave decided to stop selling fried chicken so he good make and sell the type of food he really loved – hamburgers. Unfortunately, everyone told him – particularly the bankers and financial people he spoke with – that opening another burger restaurant was a bad idea. ‘They told me the market was saturated.’ Dave lamented. After accumulating years in the fast food industry, however Dave thought otherwise. For a long time he had noticed that the big burger chains sold batch-cooked hamburgers made from frozen beef that sat under heat lamps. Early on he decided that his competitive advantage would be to offer something different – quality and freshness. In 1969, Dave opened up his first Wendy’s restaurant (which was named after his daughter) and sold made-to-order hamburgers, chili, french fries, (real) milkshakes, and soft drinks. Since day one, his idea has been a success. In fact, his first restaurant became profitable after just six weeks. Later, as the business grew, Dave added menu items that corresponded to exactly what customers told him they wanted. This formula of providing what customers wanted in a hamburger, combined with offering better quality than the competition proved to be a real winner. ‘The hardest part about running a business,’ Dave often said during his career, ‘is being willing to listen to customers and then doing whatever it takes to make your dream (and their wants) a reality. SUMMARY Dave Thomas, founder of Wendy’s Hamburger also a former franchise owner of KFC, started selling his dream hamburgers instead of fried chicken. Despite of discouragement from people regarding his idea of selling burgers, he worked on his innovative technique to use fresh chicken with the exact “wants” of customers. He eventually succeeded in no time with this combination that actually came from truly listening to his customers. __________________________________________________________________ Running a Business is as Hard Mentally as it is Physically Laurey Masterton started her apartment-based business (Laurey’s Catering and Gourmet-to-Go)in Asheville, North Carolina in 1987. ‘Running a business was a lot harder than I thought it would be,’ she says. ‘Of all the challenges I face, the greatest is dealing with the everydayness of business ownership. It exists from the moment I wake up until the time I collapse in exhaustion at the end of the day.’ Hard work isn’t the only hurdle Laurey faces. ‘Keeping ones’ spirits up is as crucial as it is difficult. I’ve averaged 30% growth for the past five years, but I still worry. In fact I’ve never done better than last year, yet during the slow times worrying can consume me.’ Fortunatly, Laurey’s hrd work paid off. As the business grew, however, she realized that she couldn’t continue to run the company from her apartment. So she brought in a private investor who added money, management experience, and emotional support to the mix. Laurey’s catering business has since grown to a 2,500 sq. foot kitchen and gourmet shop that sells sandwiches and salads. ‘You have to be your own worst critic and your own best cheerleader,’ she says. ‘My advice is that most business owners reach a point where no one is there to tell them “you can do it”. You have to be able do that yourself.’ SUMMARY Laurey Masterton was running out of energy and enthusiasm which are required to run her apartment-based catering business. She had to work really hard whole day. However, she managed to expand and grow the business by adding the private investor in her business, who also shared work with her. Only with her continue efforts, self belief and positivity she succeeded. . _____________________________________________________________________ You’re on Your Own For years, Tracey Campbell worked as a financial journalist for Standard and Poor’s wire service. But in 1995, she left the corporate world and started her own business – a 24-hour telephone and Internet service designed to search for bed-and-breakfast inns throughout the United States. Almost immediately Tracey discovered that the transition from working in a corporate office to becoming an entrepreneur created its own set of unique difficulties. ‘I took for granted the support services and infrastructure that was built into my corporate job,’ Tracey says. ‘For example, the office supply cabinet was always stocked and a technical crew was always available to fix my computer, and so on.’ Now if Tracey needs envelopes, pens, or paper, she has to travel to an office supply store. If her computer breaks down she spends hours on the telephone waiting for technical support from the manufacturer’s customer hotline – or spends hours travelling back and forth to a computer shop. When a potential client asked for a brochure, she had to design and create her own. When she ordered 10,000 ‘tent’ business cards, she had to fold them herself. In short, Tracey has found what a lot of entrepreneurs discover: that sometimes a large part of her day can be spent drowning in a sea of menial duties. Such is the life of an entrepreneur. SUMMARY Tracey Campbell former financial journalist started her own business of telephone and internet service to search beds-and- breakfast in U.S. She suffered with the dilemmas of entrepreneurship such as maintaining of office infrastructure and supporting functions. She had to work at her own for every single little thing. ___________________________________________________________________ The National Association of Secretarial Services (Look Before You Leap) In 1996, Lynette Smith (a secretarial service owner in California), was asked if she would be interested in purchasing The National Association of Secretarial Associations, a business support group operating in the USA. Because the offer came so quickly, and a contract was signed even faster, Lynette didn’t have the time most professionals would say is appropriate to prepare for ownership. In not time, after spending two long weeks doing as much research as she could, she found herself virtually on her own. It was then that she discovered the association was losing memberships. In addition, few members seemed to be aware of the services the association provided so membership retention was extremely low. To compensate for her lack of preparation, Lynette began working 70 hours a week. She consulted with members of the association, sought comments and suggestions from them, and added a website. She followed up renewal notices (previously, less than half the association’s members renewed their memberships when they expired), updated the business’s publications and added several new ones. Her time then switched to becoming a salesperson, whereupon she found herself explaining the benefits of belonging to the association countless times each day. During this period she realized that most members had no idea of the range of services the association offered – so she began tackling that issue. Eventually, as each of her challenges was overcome, she started encouraging the opening of new local chapters and even pursued major corporate clients. Later, when members said they didn’t like the term ‘secretarial’ in the association’s name. she changed it to The Association of Business Support Services. As a result of her hard work, Lynette watched memberships increased dramatically and the retention of current members improve to 72%. But to this day, she still doesn’t want to think about how much hard work could have been avoided if she had only done a little bit of homework before signing her ownership contract. SUMMARY Lynette smith made the decision to purchase The National Association of Secretarial Associations in haste. She acquired the association when members leaving the association and retention rate were declining. She had to work very hard to maintain the retention level from vigorous marketing to excellent member services. Finally, she managed to improve the situation, but, if she took enough time before taking buying decision, it could help her saving lots of her energy. ____________________________________________________________________ Keeping a Watchful Eye Believe it or not, the conglomerate behind Hardee’s, Taco Bueno, Carl’s Jr., Rally’s and Galaxy restaurants all started with a hotdog cart. Carl Karcher had an 8th grade education, a steady job as a bread truck driver, and a burning ambition to own his own business. In July of 1942, he borrowed $311 (against his car) and bought a hot dog cart in Los Angeles, California. His first day’s sales totaled $14.75. A muffin tin served as the cash register. Carl kept his bread delivery truck job and his wife worked the cart with their first baby asleep in the car. Two additional employees were eventually hired to help out. Each man worked alone for an 8-hour shift. Carl arrived each night at 02:00 hrs to collect the day’s receipts and close up the cart. One day, Carl noticed that the night shift employee consistently made about 25% less than Carl himself had brought in during the same period. When he stopped by the cart unexpectedly one evening, he dicovered that the employee was using hot dogs buns that neither he nor his wife had bought. As it turned out, the employee knew that Carl kept track of his inventory by counting the hot dog buns, which were bought by the dozen, rather than the hot dogs, which were purchased by the kilo. He then bought his own buns in order to sell several hot dogs ‘off the books’, the sales of which he pocketed. ‘I learned real fast about costs and inventory control after that,’ Carl recalls. Tips for avoiding situations like Carl’s include keeping a close track of inventory, signing every check (and checking bank statements against purchases), assigning different financial duties to different people (which makes it difficult for one employee to take advantage of a situation), and enforcing employee holidays (dishonest employee practices often cease while the culprit is away). It all comes down to keeping a watchful eye. SUMMARY: Carl’s Jr., Rally founder of Hardee’s and Galaxy restaurant started his journey from hotdog cart. Initially his wife worked at the cart later he hired two employees and delegated duties in alternate shifts. He caught fraudulent sale made by his night shift employee by closely observing first decline in sales and then counter checking of inventory. He suggested taking preventive measures and having watchful eye on business for effective success. ____________________________________________________________________ These stories have been adapted from: What No One Ever Tells You About Starting Your Own Business, by Jan Norman, Upstart Publishing Company (a division of the Dearborn Publishing Group), Chicago, Illinois, 1999. ‹ Case Study 4: Grameen Bank and Grameen Telecom – Profiting from ‘Unprofitable’ customersupCase Study 6: Marketing and Entrepreneurship (2 mini case-studies) ›

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