The starting of a business venture relies on the availability of all factors of production as well as a potentially lucrative market. Once all these are made available there is also a need to assess the risks involved in such a venture (Nieuwenhuizen, 2009). All said and done business ventures call for new or innovative ideas and most people that step out and go into ventures barely know what will transpire from the business. It is the dream of many to go into business because of the ever seemingly bright future that ventures offer in form of freedom and high returns.
This scenario applies to Sam-an accountant at local car parts store. Sam is discontented with his boss who seems to micro-manage him and have him do things his way. Sam is not happy with having to argue with the boss on certain stands. Additionally, he dislikes the people in the store as well as the idea of working for three Saturdays in a month. He also wishes to share in the freedom of business-men where he can report to his business premise or leave at any time. As a result Sam has opted to start out his own business of selling model airplanes and their accessories.
Sam has saved enough to rent a place for the business, and his banker has advised him to make a loan application to fund the purchase of inventory, fixtures and equipments. However, his wife fears for the financial security of the family once Sam’s fixed income ceases. Apparently, Sam has mortgage that will take 10 years to clear, a new car that he is still paying through installments and two teenage children. This paper reviews the potentials and challenges that Sam has as he tries to make a decision about his endeavors.
Sam seems to have good and ideas and inspiration in the right direction, but a review of Sam’s character shows some weaknesses that may not allow him to achieve success in the business world. Firstly, Sam desires to come and go at any time that he wishes in his daily business operations. However, this may not be possible in the actual sense of the business that he wishes to open. There is a high likelihood that Sam may not have sufficient capital through the loan acquire inventory, fixtures and equipment, and still have enough left to hire employees to support him in the business. Like most new ventures he may only have the support of his family which may also be greatly limited.
Therefore, Sam may find that he will have to be operating the business alone most of the time. Therefore, “coming and going” at any time may not work for him, because there certain essential pick hour times or seasons when the business of his kind may be experiencing higher sales. At such times one has to be dedicated and able to sacrifice even their free time to be at the business, and thus the issue of opening or closing as one wishes may not be possible, and if it does happen the returns from the business may be greatly affected and customers may seek services elsewhere if at all his shop is closed most of the times when they come for make purchases or window-shop (Anastasi, 2010). Similarly, his dislike for working on Saturdays may work against him in this business.
This is because most model airplanes are bought on weekends and holidays when children and even adults have their free time out and they go seeking for things of adventure. Therefore, he may be forced to work on Saturdays if he wishes to make the business a success. Additionally, Sam seems to dislike being managed or told what to do, and this is the reason he probably is not in good terms with his boss, because of constant ideological disagreements. This is not a good habit or attitude for any successful entrepreneur, because as an entrepreneur one needs to listen to others’ advice and ideas in order weigh the scales and make a decision that can positively spur the business (Anastasi, 2010).
The autonomy in decision-making that Sam desires is at times detrimental to a business and an entrepreneur may make wrong decisions that may plunge the business in to major losses if s/he fails to seek consultation or advice from third parties. Actually, an entrepreneur should be a disciplined individual and people that desire autonomy and hate to be managed are less likely to be disciplined because an overseer is always required to ensure discipline is upheld. Apart from hating the boss, Sam also hates the people that work at the shop. Hating on people is not a good habit for any business person considering the fact that as business person one will meet a variety of people from different walks of life and s/he has to work with them in order to sale and maintain good business relations.Sam’s “come and go goal” is not a realistic goal for any successful entrepreneur.
In the business world people tend to shop at their free times. Apparently, these are the same times that everyone else would wish to go out or have some free time, but that is not possible especially if one operates in an industry where business only increases in such times or where the business is related to free times. Taking Sam’s anticipated venture for example, people do buy model planes to fly in their free, leisure hours. Therefore, most purchases are likely to happen on holidays, weekends and other free times. Therefore, these are the periods that he probably should be actively running the shop, and as such the wishful desire of “coming and going” at any time may not help him realize substantial returns.
Traditionally, business people respond to the demands of the clients and as such sellers have to make their products available at pick purchase hours and seasons, and it is very rare for people to try and adjust their shopping according to the sellers’ schedule of operation. Therefore, entrepreneurs should enhance their service delivery to meet the needs of the customers in order to create value (Nieuwenhuizen, 2009).Despite the weaknesses held Sam seems to possess some strong points that indicate a possibility of positive performance if he makes a clear business plan. Firstly, Sam portrays creativity, innovativeness and he seems to be an independent minded person. These are basic traits that most entrepreneurs should have or struggle to culture if they need to succeed.
Sam also has a good saving habit that has enabled him to make sufficient savings to pay for the rent to the business premise that he intends to take up for his venture’s location. His positive credit record at his bank is an additional positive strength that Sam possesses. Having a positive record will allow Sam to acquire sufficient capital for the business’ inventory, fixtures and equipment. However, from a closer analysis of his financial position Sam may not be ready to start a business, because of various reasons.
Firstly, Sam has a considerable debt to pay both for his mortgage and car loan. The newly acquired car needs monthly installments to clear its loan and the mortgage needs servicing for the next ten years. Apart from these two major expenditures, Sam has two teenagers and these definitely need schooling which is also part of the expenses. All these expenses plus regular bills an miscellaneous expenditures may lack a source of income that will furnish their payments if the model plane ventures takes long to pick up in the market, and if it fails an even worse scenario may occur where Sam’s car and house may get repossessed if he fails to service the mortgage and car loan.
Though we are not told whether Sam’s wife works all that is clear is that he still needs a stable source of income that will ensure his monthly bills and debts are serviced. Probably, what Sam should do is withhold the idea until he has cleared his major debts such as the mortgage and car loan before engaging into the venture, because if the venture fails chances of going back to the previous employer for a job may not work. Alternatively, Sam could raise more than half of the required capital before venturing into the business because this will reduce the risk he may have to bear if the business venture does not become successful.
However, if Sam opts to go ahead he may need to transform some personal habits that he possesses in order to be successful in his business venture. Firstly, he should enhance better habits in working with people especially; people from different backgrounds and walks (Nieuwenhuizen, 2009). Seemingly, Sam is at loggerheads with everyone at the auto-parts store including his boss and this implies that he is not good at working with people. Therefore, he needs to improve his skills of relating with people. Secondly, Sam should learn to compromise on ideas and stands that he holds.
Sam seems to take hard-line stands and he seems to get attached as implied by the kind of disappointment he gets when his boss differs with him. Therefore, he should learn give and take when it comes to decision-making. Sam’s wife has concerns which may also negatively bear on the business. Firstly, she seems not to be in support of the idea and therefore, Sam may run the business without her support. Sam needs to convince her otherwise in order to have family support. Her concerns should be noted as genuine concerns because they have significance in the clearing of his debts and supporting his family’s daily expenses.
Anastasi, T. (2010),. The Successful Entrepreneur: American Dream Done Right, Glenbridge Publishing Limited
Nieuwenhuizen, C. (2009),.Entrepreneurial Skills, 2nd edition, Juta and Company Ltd