emmas's parlor - entrepreneurship management
TRANSCRIPT
EMMA’S
PARLOR
CASE FOR CRITICAL ANALYSIS
Mari-Ann B. Bringas, MD
Emma’s Parlor • Emma Lathbury’s shoulders sagged
as she flipped the cardboard sign hanging in the window of her tearoom’s front door from “open” to “closed”.
• The normally infatigable 52-year old owner was bone-tired. Any doubts she’d harbored about the wisdom of seriously considering some major changes in her business were fast disappearing.
• She hadn’t felt this weary since she’d left nursing in the early 1990s. After years of working as an intensive care nurse – with its grueling hours, emotionally draining work, and lack of both respect and autonomy – she’d developed a bad case of burnout.
Emma’s Parlor
• At the time, she was convinced she could walk away from a secure, if difficult, profession and figure out a way to making a living that suited her high energy, outgoing personality.
Emma’s Parlor
• Then one day, she noticed an 1870’s vintage Gothic Revival cottage for sale in the small Illinois farming community near where she’d grown up, and the answer to her dilemma came to her with a startling clarity.
• She’d get the financing, buy the house, and open up a cozy Victorian tearoom.
• Emma was certain she could make it work.
Emma’s Parlor
• Her success was due in part to her unintentionally perfect timing. Specialty teas had taken off, with no end in sight to the current double-digit annual growth rate.
• The solid performance of Emma’s Parlor owed a good deal to its owner’s hard work, which was more fun when she worked for herself.
Emma’s Parlor
• She personally decorated the place, graced the small circular tables, hired staff, and tracked down recipes for the finger foods, jams and Battenburg cake that earned her growing reviews in numerous guidebooks and national reputation.
Emma’s Parlor
• Quickly realizing that special events were key to attracting customers, she organized and publicized fanciful gatherings that drew everyone from children toting their favorite animals to an Alice in wonderland affair to women dressed in their best outfits...
• The tearoom which employed about 20 people was nearly always completely booked.
Emma’s Parlor
• Most of all, the former nurse developed a real expertise when it came to teas, becoming particularly fascinated by the medicinal benefits of herbal teas.
• She started by conducting workshops on efficacy of organic teas. Eventually, began blending her own Emma’s Parlor Organic Teas.
Emma’s Parlor
• Her own Emma’s Parlor Organic Teas started to sell in retail stores, restaurants, and to individuals over the Web.
• Her Web-based business flourished, generating slightly less revenue than she was realizing from the tearoom. The profit margins were higher.
Emma’s Parlor
DILEMMA/ PROBLEM
• Despite the fulfilment she found running her own business, it was getting too big for her to handle.
• Emma was beginning to experience the all-too-familiar symptoms of burnout.
Emma’s Parlor
DILEMMA/ PROBLEM
• What might be the best option for Emma at her current business stage?
• How can Emma manage her business at its current stage?
Emma’s Parlor
Emma’s Options
Drop the tearoom and focus on the Internet
business, or vice versa
Master the fine art of delegation and turn
Emma’s Parlor over to an experienced
restaurant manager
Sell the tearoom outright
Close the restaurant or the Internet business
Key Objectives
• To determine the best option for Emma in running the current stage of her business.
Organizational objective:
• To unload Emma of the pressure in running the business thru POLC.
Business objective:
• To maximize the potentials, opportunities and resources at the current stage of business.
How did Emma Start?
Reasons for Starting a Business
Lay off
41% Joined Family business
36% To control my future
27% To be my own boss
25% To fulfill a dream
5%
Source of New Business Ideas
Brainstorming
Copying someone else
Hobby
37% In-Depth Understanding of Industry or Profession
36% Market Niche Spotted
7%
4%
4%
11% Other
Emma’s Parlor
• At the time, she was convinced she could walk away from a secure, if difficult, profession and figure out a way to making a living that suited her high energy, outgoing personality.
36% To control my future
27% To be my own boss
Emma’s Parlor
• Then one day, she noticed an 1870’s vintage Gothic Revival cottage for sale in the small Illinois farming community near where she’d grown up, and the answer to her dilemma came to her with a startling clarity.
• She’d get the financing, buy the house, and open up a cozy Victorian tearoom.
• Emma was certain she could make it work.
36% Market Niche Spotted
• Her success was due in part to her unintentionally perfect timing. Specialty teas had taken off, with no end in sight to the current double-digit annual growth rate.
• The solid performance of Emma’s Parlor owed a good deal to its owner’s hard work, which was more fun when she worked for herself.
Emma’s Parlor 36% Market Niche Spotted
5 TYPES OF SMALL BUSINESS OWNERS
IDEALISTS 24%
JUGGLERS 20%
HARD WORKERS
20%
OPTIMIZERS 21%
SUSTAINERS 15%
Rewarded by chance to work on something new and creative
Get personal satisfaction from being a business owner
Thrive on challenge of building a larger, more profitable business
High energy Enjoys handling every detail of the business
Enjoys chance to balance work and personal life
Source: Yankelovich Partners for Pitney Bowes in Mark Henricks “Type-Cast” Entrepreneur ( March 2000); 14-16
At what business stage is Emma’s Parlor?
5 Stages of Growth for an Entrepreneurial Company
STAGES OF GROWTH Start-
up
Survival
Success
Take-off
Resource Maturity
Main Problems are producing the product or Service and obtaining customers.
Workable Business entity. It produces product & service and has sufficient customers. Concerns include finances.
Solidly based & profitable. Systems & procedures are in place. The owner could stay involved or turn the managing tasks to professional managers.
Key problem is how to grow rapidly & finance the growth. The owner must learn to delegate and the company must have sufficient capital to sustain the growth.
The company’s substantial financial gains may come at the cost of losing Its advantages of small size, including flexibility and the entrepreneurial spirit.
At what business stage is Emma’s Parlor?
• Success Stage:
– Solidly based and profitable.
– Systems and procedures are in place to allow the owner to slow down if desired.
– Owner can stay involved
– Turn over the business to a professional manager
At what stage is her Web-based organic tea business?
• Success Stage:
– Solidly based and profitable.
– Systems and procedures are in place to allow the owner to slow down if desired.
– Owner can stay involved
– Turn over the business to a professional manager
What synergies exist between the two businesses? How critical do you think those synergies are to the success
of each business?
• Synergy- the whole is greater than the sum of its parts
The tearoom came first before the
Internet business
Tearoom is isolated, less accessible, limited in capacity
Internet business is a
good venue to market the
products from the tearoom.
• Online/Internet business
Business expansion can take a simple idea and turn it into a lucrative
business
Owner should be persistent in marketing, savvy with technology and skilful at building online relationships
Wider market, technology-driven
workplace can keep in touch with customers
online
The Web Based Tea Business, does not only
market the Tea itself, but also the venue
where these products are served.
Encourage more clients to visit Emma’s Parlor
where customers experience, freshly
made tea or be a venue for other activities.
Customer feedback possible
What synergies exist between the two businesses? How critical do you think those synergies are to the success
of each business?
How does Emma Lathbury fit the profile of the typical entrepreneur?
Entrepreneurial personality
Internal locus of control
High Energy Level
Need to achieve
Awareness of passing
time
Self-confidence
Tolerance for
Ambiguity
How does Emma Lathbury fit the profile of the typical entrepreneur? Which of those traits are likely to continue to serve her well, and which might be counterproductive
at this stage of her business?
Which of those traits are likely to continue to serve her well, at this stage of her business?
High-energy level-
• driven and focused at achieving goal.
• “...she could walk away from a secure, if difficult, profession and figure out a way to making a living that suited her high energy, outgoing personality. “
Need to achieve-
• motivated to excel and pick situations in which success is likely.
• “Emma was certain she could make it work. “
Which of those traits are likely to continue to serve her well, at this stage of her business?
Internal locus of control
• knew that their future is within their control and external forces have little influence.
• “She’d get the financing, buy the house, and open up a cozy Victorian tearoom. Emma was certain she could make it work.”
Self-confidence
• act decisively;
• need confidence to master day to day tasks for the business;
• feel sure on their ability to win customers, handle technical skills and keep business moving. Security that they can deal with anything in the future.
• “She personally decorated the place, graced the small circular tables, hired staff, and tracked down recipes ...”
Which of those traits are might be counterproductive at this stage of her business?
Awareness of passing time
• Impatient
• Feels urgency to do something
• “Despite the fulfilment she found running her own business, it was getting too big for her to handle. “
Tolerance to ambiguity
• psychological characteristic that allows a person to be untroubled by disorder and uncertainty.
• “Emma was beginning to experience the all-too-familiar symptoms of burnout”
Which of those traits are might be counterproductive at this stage of her business?
• Female entrepreneur- Only 20% of women-owned business have employees, an area of great growth and opportunity. The want to do things by themselves.
• To survive TURBULENT TIMES:
Realism Flexibility Passion
EMMA’S PARLOR MISSION
The Emma’s Parlor Tea room will provide only the highest quality, healthy products
and services to leaf tea drinkers in an environment that is safe, comfortable and attractive and will encourage customers to
come back and make repeated visits.
EP VISION
We want to be the social coffee/tea shop of the 21st century, the place where
everyone can meet and build relationships
EMMA’S PARLOR STRATEGY
Quality tea and teaware products
Best food products
Most attractive decorations and ambience
Best quality customer service
SWOT HELPFUL HARMFUL
INTER
NA
L
STRENGTH Creativity/ own production Culture/ Special personal touch Good reputation Business synergy Team of 20 more manageable
WEAKNESS Growing business hard to manage Knowledge/Skills need to be delegated
EXTER
NA
L
OPPORTUNITIES Pop-up activities Younger and older customers Health issues/ benefits Globally consumed product
THREATS Tea industry Emerging tea rooms Online marketing Direct competitors
Action Plan
Strength Opportunities Pursue Opportunities that are fit to Strengths
Use creative planning to
organize activities in the tearoom
that will promote tea products.
Personal touch and welcoming
culture can cater to the tastes of both young and old customers.
Good reputation of products can be
promoted to target health
issues using the Web-based
business and make them globally consumable.
Strength Threats Use Strengths to reduce vulnerability to external Threats
Action Plan
Business synergy can employ more
manpower and customers.
Multiple product lines- create teams and
divisions
Creative products and innovative marketing
strategies can promote sales of tea with health
benefits on different venues such as retail
stores, local supermarkets and
online.
Weakness Opportunities Overcome weaknesses to pursue opportunities
Action Plan
Hire more people to help organize and sustain the
growing needs of the business.
Multiple product lines- create teams
Train more people in
tea-making to increase
productivity.
Provide more job
opportunities
Weakness Threats Establish defensive plan to prevent weaknesses
Action Plan
Delegate responsibilities.
Strengthen manpower and management staff to be able to compete with growing industry
Intrapreneurship- recognizing the need
for innovation and promoting it within the
organization. Innovation and new products can attract consumers in online
business.
MANAGING A GROWING BUSINESS
START Self-confidence Internal locus of
control Creativity
Owners love to perfect every
detail
CONTINUED GROWTH Shift in management style
Need to adjust POLC
Planning is in the form of the Business Plan.
One Planning concern is to be Web Savvy.
Managers must learn to delegate and decentralize authority. The organization must
hire competent managers who could handle the fast growth rate of the organization.
The driving force in a small business start ups is the leader’s vision. The leader can signal values of Service, efficiency, quality & Ethics. The leader must learn to motivate employees.
Financial control is important in the firm’s growth. Control is exercised by simple
accounting records and by personal supervision. Operational budget are in place and a structured system must be
implemented.
PLANNING
• Start-up Stage
• Non-existent
• Primary goal is to remain alive
• Success stage
• Formal planning
• Define goals
• Decide on tasks
• Use of resources
1
3
ORGANIZING
• Start-up and Survival • Informal
• Employees report to owner
• Success • Hire functional managers to take charge of finance,
manufacturing and marketing
• Outsourcing
• Functional organization
• Managers learn to delegate and decentralize authority
• Multiple product lines- create teams
• Greater use of rules, procedures and written job descriptions
1
3
LEADING
• Early Stage
• Driving force is leader’s vision
• Leader’s personality shapes corporate culture
• Success
• Owner must motivate employees or bring in managers who can
• Take-off
• Employee cooperation
1
3
4
CONTROLLING
• Early Stage
• Simple accounting and personal supervision
• Success
• Operational budgets in place
• More structured control systems
• Take-off
• Sophisticated control techniques
1
3
4
EMMA’S OPTIONS
OPTION PROS CONS
Drop the tearoom and focus on the Internet business, or vice versa.
•More time and close monitoring of just 1 business entity. •Productive time less stress.
•The delegated business might not be managed well. •Loss of synergy.
Sell the business •Retirement money •Start a new business
•At her age, she might not be as driven and high-energy in starting up a new business. •Loss of work may be deteriorating
Delegate to a manager
•More work can be done •Expand business •Opportunity to employ others
•Loss of personal touch •Hiring inefficient employees •lose advantages of small size, including flexibility and the entrepreneurial spirit.
Close down the restaurant and Internet business
•Less stress. •No worries. •More time for self.
•Limited source of income •No more productive years
Which course of action would you recommend?
OPTION PROS CONS
Drop the tearoom and focus on the Internet business, or vice versa.
•More time and close monitoring of just 1 business entity. •Productive time less stress.
•The delegated business might not be managed well. •Lack of synergy.
Sell the business •Retirement money •Start a new business
•At her age, she might not be as driven and high-energy in starting up a new business. •Loss of work may be deteriorating
Delegate to a manager
•More work can be done •Expand business •Opportunity to employ others
•Loss of personal touch •Hiring inefficient employees •lose advantages of small size, including flexibility and the entrepreneurial spirit.
Close down the restaurant and Internet business
•Less stress. •No worries. •More time for self.
•Limited source of income •No more productive years
Delegate to a manager
• The food business is very competitive and physically demanding .
• As business grows, there needs to be additional manpower to cater for present and future customers.
• A NEW MANAGER can share workload done by Emma.
• Emma can still continue to oversee operations of her business but on a supervisorial level.
What is DELEGATION ?
• Assignment of responsibility to another person for the purpose of carrying out specific job-related activities.
• A shift of decision-making authority form one organizational level to another
GOAL FOR EMMA
• Appreciate the importance of delegating as a way to offload work and get more work done in her busy life
• Face the fear of delegation and learn to think positively
• Adopt an appropriate strategy to delegate
– Right task, right people, right time, right way
• Use a systemic step-by step approach to brief people on what she wants to delegate to them
BENEFITS OF DELEGATION
Manager/ Supervisor
Benefits
• Reduce stress
• Improved time management
• Increase trust
Employee Benefits
• Professional knowledge and skill development
• Elevated self-esteem and confidence
• Sense of achievement
Organizational Benefits
• Increased teamwork
• Increased productivity and efficiency
Delegate to a manager
• Less workload and stress • Build divisions or teams for each business line • Deal with suppliers and consumers properly • Expansion of business is possible if job
delegation is implemented- employee cooperation
• More structured control systems • More profit can be channeled to expansion. • Enter next stage TAKE OFF
“Instead of wondering where
your next vacation is,
maybe you should set up a life
you don’t need to escape from.”
____________ SETH GODIN
Thank you for your kind attention.