Family Business

By | 06/02/2019

Family business startups are beneficial though they may present lots challenges when the owners do not assess the opportunities available for its growth. Starting up a small family business requires a lot of resources regarding human resources of capital, time and energy. The paper examines the Dell family startup, the opportunities that were available, mistakes the inventors made and the success as well as the failure of their planning.

CJ’s Mclaine’s Deli family’s idea of opening an Italian style deli in Evergreen, Colorado in 2004 was a good idea. The evergreen area was full of potential for the business and presented an opportunity for business growth as evident in the rapid growth of the company within its first year of operation.

The business grew rapidly because the family knew how to prepare good Italian food and there were no Italian restaurants in Evergreen at the time of their venture. Evergreen had lots of weekend visitors, increased tourist trade, retail office complex which would provide customers with the family’s business.

The launching of the Deli had lots of skills and resources as Angela, Dina and Josephine had a unique set of skills and personal strengths the business needed, hence its successful first year of operations. Josephine was to fund the startup as she also had the understanding of the small business basics having run a small CPA firm.  Angela who had10 year’ experience in bed and breakfast services and eventual rise to management level would manage the business’ operations.

Dina due to her extensive experience in restaurant and catering was essential in running the catering business from the kitchen inn. Dina had a lot of experience having worked in fast food establishments and excellent dining restaurants as a meal planner, counter service, waitress and eventually as a restaurant manager (Watson, 2009).

The family’ business current situation is not doing well as it is making lots of losses. At the end of its second year, the business had made a net loss of $ 19,388 for the year ended December 31st, 2006, a slight improvement from the previous year’s (2005) loss of $ 30, 505.

Ibrahim, Angelids, and Parsa (2008) pointed out that mall business startups often experience challenges that managers must reevaluate their strategies to overcome. Deli, like any other small start-up, was facing problems due to the economic recession, competitions, and changes in the micro business environment (Porter, 1990).

The managers especially Dina and Angela spent much time recruiting and training employees who quit after working for s short period. Filling such vacancies was difficult once a part-time employee leaves for a better paying job than Deli’s Richbell, S. (200.

Increased completion from two other stores as one, located half a mile from CJ Mclaine’s with convenient store items, selling sandwiches by the pound instead of fixed prices as well as operating for more extended hours than Mclaine’s. The second competitor was a catering business that a chef from a famous culinary institute managed.

Mclaine’s former customer also opened a coffee kiosk and made its patries making Mclaine’s to lose some of their customers to the coffee shop. The increased competition added to the problem the Mclaine’s was also experiencing in its second year of operations (Porter, 1990).

As a result of the current business losses, Josephine, Dina and Angela are considering some options to sustain their business. Such options include allocating more funds for their brand’s advertisement, paying off their lease and closing the store or just remaining opened and wait for new tenants when the recession ends (Headd, 2003).

Alternatively, the partners would develop products to market through the internet such as the mail order barbecues as Angela had already established a website (Porter, 1980). Product diversifications were also necessary such as selling newspapers, lottery tickets, wine coolers and beer. The partners even thought of getting a bigger space to accommodate their customers who would wish to have it as a destination for a sit-down meal.

Every available option and any change Josephine, Angela and Dina would make necessary extra funding to obtain the required permits which were quite expensive amid the $30,000 decrease in sales. The only possible source of funding would be to take a salary cut to avail more funds for the implementation of the changes (Headd, 2003).

Ibrahim, Angelids, and Parsa, (2008) noted that business owners need to do prior planning before setting up the business. Josephine, Angela, and Dina should have considered planning for extra space to allow for more sitting space before launching the business.

The owners, each having different skills and experience may reconsider the organizational status. Josephine is additional to financing the business, may offer her accounting skills as she is an experienced CPA holder to manage and provide financial advice on cost-cutting methods to minimize the business’ operational costs.

Angela, due to her creativity may need to develop unique dishes to attract customers. Dina, due to her gregarious and pleasant personality she developed from her fifteen year’s retail experience may take the role of sales and marketing of the business’ products. Such organizational changes would increase the company’s operational efficiency, reduce expenses and increase sales (Richbell, 2006).

Small business startups often have challenges, and one may feel like quitting. However, the partners should not close the business (Headd, 2003). Instead, they should focus on diversifying their products, increase sale and marketing thus and continue with operations. The business, just like its first year may pick again and grow.

In conclusion, starting a business is a great achievement for many entrepreneurs. However, small business managers face a lot of challenges such as recruiting and retaining the right employees, financial and cash flow management, building a business brand, getting and maintaining customers, competition, economic changes, fatigue due to overworking and staying competitive. During such challenges, the managers need to ask for help from financial advisors and marketers on how best to manage their business.