SESSION 2 CASE STUDIES
A Tale of Two Entrepreneurs
Pros and Cons of Running a Small Business|
* Independence| * Earning less|
* Putting own ideas into action| * Working harder|
* Creating work for yourself| * Still being under a big organization| * More freedom| * No negotiation power|
* Individuality | * Uncertainty of success|
* Challenging | * Risky, less security|
* Flexibility and informality of working environment| * Co-operation with larger companies that make and market final products| * More flexible in responding to customers’ requirements| | * Not waiting for someone else to do it for us| |
2. In Andrea’s case I would advise her to look at her options. She must look into the benefits and the drawbacks of staying within the company and transferring departments, or taking her redundancy package and starting up her own business. She should assess and measure the opportunity. Not only banking on the government authority as her only customer she must analyse if other customers are reachable. She must assess is if her market potential and annual growth is could be significant and durable. She might also measure if the customer payback would be less than one year, and if she would break even within the first 2 years. Andrea should also assess her competition and see if she can compete and provide her services at lower cost than them, and lower capital. All the above is important for her to look at when assessing and differentiating starting her own business from being a mere idea to an opportunity. Kit too should look at these same aspects of differentiating between a good idea and an opportunity as Andrea. He should look into finding out the costs involved in operating his business in an environmentally friendly manner, and measure if the venture will be sustainable as well as profit maximizing, with cost effective measures. He must assess and formulate a plan on how he would build relationships and alliances with both the small firms in the industry as well as the larger companies who make and market the final product. With the skills and experience of his partner, he could learn more about how to start a new venture and learn from the mistakes made in the past, assess them and formulate a plan to do better.
3. If I were in their positions, my decision would be to branch out and move into small businesses. It would be good to achieve independence in this small business. It would make the move to expecting a profit after taking such a risk and leaving the security of the large company. In Kit’s position I would take the chance to start a business whose operations have less damaging effects on the environment, thus contributing to a better environment making a significant difference. In Andrea’s case I would make the move as well as it would be a solution to the government authority as they are looking to outsource its central services, as well as a solution to my problem as I was “in a rut” at work and would have needed to transfer departments or find new employment. This move would give an opportunity to reach my full potential that could have been held back in the confines of the government authority.
4. The Entrepreneurship Process is driven by opportunity. Market demand is key to measuring an opportunity. In Andrea’s case we see that there is viable demand for her Payroll business. If she branches out and starts her business she has the opportunity of getting the contract for the government authority she was working for before and provide the necessary service to them. This customer is reachable, thus enhancing the opportunity. In Kit’s case, he saw the opportunity of starting a business with a difference that operated in an environmentally friendly way setting him apart from the other businesses out there. There would be a business like his that uses...