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Small Business Management Essay

In: Business and Management

Submitted By RAMBROSE1
Words 679
Pages 3
Robert Ambrose
Small Business Management
October 9, 2015
Professor S. Turner

Final Paper

The Dilemma
The gentlemen of “Three Guys Garage” all have the best interest of the organization in mind. However, they have differing outlooks on the best approach to expand “Three Guys Garage” and reach the level of success they all aspire for. Karl is very interested in turning the company into a national chain, but the other members of the team have some concerns. For an example, Ben is concerned about control losing control of the brand. Rick on the other hand has voiced that he is worried about losing his profits.

The Strategy
After evaluating the different Growth strategies the best strategy for the team is to continue on as a privately owned company. As a privately owned company while growth may be slower than the other options it is still possible. On the other hand, if the gentleman where to try and franchise the organization there is a very good chance they would lose control of the day to day operations of some units, which is an issue for Ben. While it is required for franchise owners to follow company-operating procedure developed by the parent company, ultimately the unit is owned by the franchisee and he or she going to make decisions for his or her shop that best fits their goals (Joseph, 2015). If the team decide to take the offer of the investor and start a joint venture, they will have to further split their profits which does not go over well with Rick. Other problems with starting a joint venture are liability and conflicts. When entering into a joint venture there is no separation between the partners and the business plus there is unlimited liability between for company debt and obligation (Carter, 2015). This means creditors can go after the partners personal property when pursuing a business debt and can go after the business’s assets when pursing a partners personal debt (Carter, 2015). In regards to conflicts, partners may disagree on how to handle business decisions that will arise. In a joint venture leaves the door open to these possibly costly disputes (Carter, 2015). In continuing on as a privately owned company, the team can still expand and pursue growth while keeping control of their organization and their profits.

Innovation
In their effort to expand “Three Guy Garage”, it is key for Karl, Ben and Rick to move forward with investing in the new technology necessary to service newer cars. According to a study put on by Accenture, 90 percent of business owners believe that “long-term success of their organization’s strategy depends on their ability to develop new ideas” (Brooks, 2013). It is important to keep operations, products and services fresh (Brooks, 2013). If the gentlemen of “Three Guys Garage” are interested in keeping up with their competition and growing the organization, they are going to need to stay on the cutting edge of technology.

The Template COMPANY-OWNED | FRANCHISE | JOINT VENTURE | PROS: 1. – Maintain control of company 2. – Keep the profits 3. – free to choose team and culture | PROS:1. –Minimal growth risk2. –Owners motivated due to investment3. -Rapid growth potential | PROS:1. –Shared risk2. –Access to resources3. -Increased funding | CONS: 1. –Responsible for all cost 2. –Take on all the risk 3. –limited resources | CONS:1. – The set up process is slow2. – Less control of management3. - Difficult to innovate | CONS:1. –Different management styles2. –You have to share profits3. -potential for conflict and disputes | (Joseph, 2015) | (Shane, 2013) | (Carter, 2015) |

References

Brooks, C. (2013, September 23). Innovation: Key to Successful Business.
Retrieved from http://www.businessnewsdaily.com/5167-innovation.html

Carter, C. (2015). The Advantages & Disadvantages of Joint Ventures or Partnership Relationships.
Retrieved from http://smallbusiness.chron.com/advantages-disadvantages-joint-ventures-partnership-relationships-24009.html

Joseph, C. (2015). Company Owned Vs. Franchised Chains.
Retrieved from http://smallbusiness.chron.com/company-owned-vs-franchised-chains-10389.html

Shane, S. (2013, May 7). The Pros and Cons of Franchising Your Business. http://www.entrepreneur.com/article/226489

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