TABLE OF CONTENTS
Introduction 3
Learning Vignette -- Changing Generations: An Entrepreneur takes over the Family Business 3
Guiding Questions 4
Products 5
Changing Generations: An Entrepreneur
takes over the Family Business
(The Family Business)
Introduction
Michael Bates was a young, creative, talented college graduate who was ready to conquer the music world. He had double majored in business and music. This somewhat odd mixture of classes was the result of his early passion to be involved in the local opera, while his parents had insisted that he should get a degree that would be useful in the "real world" and one which he could use to take over the family business.
Learning Vignette -- Changing Generations: An Entrepreneur takes over the Family Business
The business was a country-style restaurant that had been in the family for two generations. The community had grown into a small city with this restaurant in a very prime retail space. Through good planning and sound business decisions the family had been able to acquire several acres of this prime retail property adjacent to their restaurant. The family had also recently bought a small shopping center that joined the property on which the restaurant was located.
This business, which had been started by his grandfather, had become an icon in the community. Many of the older couples had their first date at this restaurant. Some of the younger people would come to the restaurant to appreciate the nostalgia, while newcomers found the restaurant and its legacy through word-of-mouth when they moved to town. The restaurant had also become somewhat of a tourist stop as it was on the main highway and tour groups stopped by to see a little bit of yesteryear.
The restaurant, which had been the primary source of income for the family, was going through a time of great change. The grandfather had passed away several years previously and Michael’s father, who had been the only one to work in the family business, was ready to retire and pass the business on to his son. Michael had two sisters, who chose to not be involved with the family business but who had been receiving a quarterly check from the profits of the restaurant. They had not been involved with the management nor operations of the business for quite some time, although they still had family ties and a sentimental attachment to the restaurant.
Michael had gone away to the major university in the state and had many opportunities to be involved with plays, musical performances and even with writing his own music. He had excelled not only in music, but also in his business classes. He had taken a leading role in the Free Enterprise program at the university as well as being an active member of the Collegiate Entrepreneurs Organization. He felt a great loyalty to his parents, but also had a burning desire to become an accomplished musician.
Upon returning from college, Michael worked with his father during the day and pursued his interest in music after work by playing in a local band and teaching piano lessons. After Michael had worked for six months in the restaurant, his father told him of his plans to retire within the next year and pass the business to Michael. This would be a challenging and learning year for Michael, as he would be faced with many difficult decisions regarding his personal and business life.
After the retirement of his father, Michael took over running the family business and had plans to implement new ideas in the business. He was also approached by several investors who wanted to purchase the restaurant with hopes of selling the property to a real estate development firm. Family members were taking a new interest in the business, as they felt they were about to lose out on the riches of its being sold to a major development company. Michael could possibly have the opportunity to follow his career dream and become an accomplished musician. There were numerous factors to consider and options to weigh, as Michael needed to make a decision as to his future.
Michael decided to research and think through his decision because he wanted to do the right thing for all those involved. There were some options that might not only enhance the current business, but could also help Michael realize some of his personal goals. He searched the Internet and was able to find several sites that had information about expanding an existing business. These sites had information on how one might obtain financing for various projects related to the expansion of an existing business. He discovered one site that is maintained by the federal government is the Small Business Administration. The site can be found at http://www.sba.gov. The information contained in this site would be a great starting point for individuals wanting to know about financing or expanding an existing business.
Selling the business is an option that Michael could consider as he plans for the future. Although selling the business would get him out of the operations of the company and he could pursue his musical interests, there could be some possible conflict with the other family members who have been receiving income from the business. This conflict within the family could lead to a great deal of bad feeling within the family, an outcome that Michael wishes to avoid.
There has also been talk around town about a group of local people wanting to take over operating the restaurant and giving Michael an opportunity to pursue his musical career. These individuals are looking at ways to keep some of the "small town" feel to a rapidly changing community.
Guiding Questions
- What are the major issues facing Michael?
- What options does Michael have?
- What type of information does Michael need to make decisions?
- What legal rights will the two sisters have in this case?
- How can Michael align both his personal goals and responsibilities to his family?
Products
Develop a plan for Michael.
This case maybe used to begin the process of developing the Entrepreneurship spirit at the College Level. This case can be used as the framework for other similar situations.