First of all, Erica Mills and her husband have been decided to start a family business. They open a Warm Fuzz Cards company which is sells greeting cards made by Mills which she designs. Mills have been doing many researches to study and understand the cards market in the Canadian and U.S market, by estimating the annual consumption of buying cards and prices according to the nature of cards. All products offered by their company were made by Mills; as a child she had a passion for art and loves to become an artist than to become an entrepreneur and open her own business. Erica Mills study science as university education but she still continued to pursue her passion and art. After her marriage she lived in Russia with her husband but they have been suffering of working because language speak and immigration rules. So they decided to focus on their career and life by starting the Warm Fuzz Cards Company. According to (Ralph J. Massey, 1954) he talks about the importance of entrepreneur that “In recent years there has been an increased interest in the vital role which the businessman or, more specifically, the entrepreneur plays in economic development.” According to the case study Mills and her husband have decided to open their own business, so she earn funds from sales so the cash flow is so important to continue what she starts with minimum cost. Mills should decide how business would grow, and deciding will accrue disadvantages and advantages. If Mills decided to have a slow growth than she’s not taking too much risk, but she has a very low investment. On the other hand if they decides to become a fast grow business, they must invest more, and find partners to increase sales and profits but it will leads by taking high risk. Mills decided and liked her slow growth, to stay in the decision maker and control to a safer environment even she lacks of money and assets. She will apply for loans soon. Most of entrepreneurs, when they first start they own business, if they have limit funds and don’t have partners to share risks and money and invest more, they decided to pursue a slow decision growth, so they earn first some money and gain customers royalty and leads after to growth and expand their businesses. Being an entrepreneur isn’t easy as seen, it require passion and something that the person know about it, and how he will manage, having the business spirit to become winner businessman which leads earning profit and sales. As we can see in the case study Mills have passion to arts and designing cards, also the spirit of being leader and manage her business to have a successful company. As (Acs and Audretsch, 2003) “Entrepreneurship has come to be perceived as an engine of economic and social development throughout the world”. But a problem for many start-ups business is the acquisition of external equity during the first year of opening.
Strategic plan of any business is so important, according to (Roger Kaufman, 2014), that “A useful organizational strategic plan will identify, define, and justify where the institution is going, why it is going there, and provide the criteria for effective and efficient decision making.” In addition it also provides criteria for planning how achieve the mission, so the financial, physical, and human resources will be well allocated. As the case study shown Mills have both strengths and weaknesses; Mills strengths is able to self evaluate finance her business and doesn’t have cost and fees to pay. Also Mills has positive cash flow, good planning by calculating expenses and observe them, and paying all account receivables on time to avoiding penalties. They deliver their products produced to customers on time with good quality and according to the satisfaction of their customers; if for example a customer is not happy about what he was ordered Mills reproduce the work to ensure that he is satisfied and gain customer trust again. Also Mills does not have a very big company which will reduce risk, cost and expenses. In the case study, what helps Mills to start her business with no financial investment and expenses is, when a family friend has been paid the bill to produce and print the 36 designs card with thousands of copies. So Mills does not have a rent expense or buy a shop to produce cards and work on it, but just in a back office at home they have been working to reduce risks and expenses. And in their office they buy only a high quality printer and Mac computer, she has only phone costs and she create an internet website. Mills have many relationships with many companies and printer which helps her to produce cards when she has a big order. In addition, as the financial part, Mills does not have an accountant to hire, so she learn all financial things and create a system to enter all data necessary to the job, for example; customer’s business card, date of each order with an invoice date and when she receive the payment. Sometimes Mills talks to an accountant friend to helps her to do the financial statements, also the husband of Mills play an important role to help her by having a successful company. On the other hand, Mills weaknesses was, no enough internal cash, and small assets to have a growth and expand her business quickly as soon as she can. And have limit management, financial experience which impact on the company. All of these weaknesses shown will create many future challenges that Mills will faces. Mills can use strengths to have in the future and become successful according the plan she put it and achieve objectives. According to (Mattias Norvdqvist, 2010), which talks about strategy that” the strategy as practice perspective emphasizes that strategic work is not the same for all organization”. Also the way of applying a strategy tend to have commitment to some routines, and work patterns may change from a company to other, and between different types of organization as may be influenced by many practices. Every starting business or a company put a plan which includes an analysis of strengths, weaknesses, opportunities and threats. By analyzing all of these previously, it helps by knowing who to start and where to work more to have successful business. According to the case study, Mills has weaknesses and strengths like any person who wants to start his own company, but Mills need to use all her strengths and opportunities to stay her company alive, and earn profit and money however she has a slow growth. Add on this Mills and her husband before starting their cards company, they have been put a plan with goals, and stick on it to accomplish what they dream to do.
First, if Mills wants to continue slow growth she should use cash generated by the business to make it grow. By making this decision Mills will reduce risk and control. But Mills has preferred to choose the slow growth option, because she feels more flexible on control and manage her business. However Mills know by choosing this way of slow growth it might be more difficult, because she wants to start a family and have motherhood responsibilities, and might be giving up on some business opportunities, when a family friend know a senior executive who works in a large company, which sold cards, and Mills will invest in this organization to serve and gain more customers. But if she will continue slow growth the company will not earn too much cash and assets to invest.
If Mills wants to pursue a fast growth, than she need more time to spend in work, to supervise and put all their efforts to grow quickly. But in this case Mills will see this option very hard to do, which she has a plan both start a family and work on her business. However Mills can invest to grow fast her business in human resources part, which allowed her time in family life and someone who run her company. Mills decided to continue with her low growth strategy, which she invest a low amount of money in a large cards company to increase her sales. Also she thinks to study the market and penetrate in with an online marketing plan. In 2009, they born a baby; Mills and her husband believe that she can maintain her family life and her business both carefully. When a business growth slowly it can gives time to learn from previous mistakes and do not repeat it again. But slow growth may stop making profit because he missed to compete and enter a new market because the business is small. A limited growth strategy, have a cost not as expensive as fast, rapid growth. So to make the business grow faster, it requires spending and investing more money to hire employees and staff, to expand more. All of that will decrease the profit margin, May also required to take more debts or let someone invest in the company, but debt places will add financial demands on the business. Also if someone invest in the company will leads to giving up some degree of control. (Bruce R. Barringer, 2005) has been talking and have an point of view of rapid growth that “A group of firms that is
Attracting attention are rapid-growth firms, these firms are of particular interest because rapid growth is an indication of market acceptance and firm success”. Add on this, studying fast growth firms is so important, it will allow to researchers to help all companies to better understand the attributes which
associated with this company growth. However, fast firm growth may be to some businesses difficult to maintain and achieve.
According to the case study, Mills husband saw that his wife is talented and can handle the company to become successful. So he believe of fast growth, and possible but Mills was furious when and where to invest to achieve the fast grow. So Mills has many options where to invest to grow her business; we can cite improving financial management, increasing sales and marketing efforts, investing in the company and adding more design capability. First Mills can hire someone who will take care of all accounting department, instead she need to spend more time on accounting and financial section. This step will help here to spend more time on making card design and focus on sales. Also she can bring a salesperson or someone who represent her to earn more sales and increasing profit. So she can use a broker who take only a percentage of sales because Mills Company was small, and a broker that it might not receive enough attention. In addition Mills can hire a marketing person, or an administrator and buying accounting software to ensure all errors. However Mills saw that her accounting system is effective and her company don’t need a high end accounting system to work on it. Also Mills can invest in company and focus on large retailers; this part can be leading a fast grow revenue, for example 160 stores with 10 designs at six copies of each at 2.25$ wholesale. But in this case Mills can’t predict the percentage of sales of her cards in inventories and it is risky and will lead to an unexpected cost. The dollar amounts are small, which she can finance this option from current cash flow. Mills can make an n agree with the printer to print on demand to reduce her cost and risk. And the last thing that can Mills invest in is adding design capability to focus on marketing and sales. By hiring a part time or freelance designer to help her to accomplish her job, but she believes that her unique card design style is the key of her success, and using this method will not be successful, according to the case study to Mills because art and design are her passion. Mills believes that she can grow her business and become successful if she has the necessary time to do that by focusing on her target. A study has been developed to examine the changes in firm strategic adaptations and environment in the last 24 years in china. According to (Justin Tan, 2005)” the study found that compared with 1990, in 2002, the business environment in China has become more conducive to entrepreneurial activities, and managers in state-owned enterprises have reacted to commit to future growth and make more innovative and risk decisions”.
To conclude, Mills need to consider how to finance this fast growth; first she can have a loan from a private sector or from a bank, but according to her business if he is doing well or not, so the bank decide the percentage of amount of money will give to her. Or in the other way Mills can put personal guaranties or personal assets to have been accepted to the loan. Also Mills can find someone who will invest with her company. In this case this option will lead both advantages and disadvantages. Mills will lose some control in the company and increase the risk which will leads a slow growth. However if the partner have the specification that Mills needed and well trained and have skills, this will be a successful choice and help Mills to be more balanced in her life and give her more time to spend and begin her family life. Add on this Mills can find a private investor. This will lead to lose for sure her control in the business and lose the majority of the ownership; however this step will defiantly allow her the cash needed to grow her business faster.