Read the following scenarios, then answer the questions that follow. Situation 1 In the following statement, a business owner attempts to explain and justify his preference for slow growth in his business. I limit my growth pace and make every effort to service my present customers in the manner they deserve. I have some peer pressure to do otherwise by following the advice of experts—that is, to take on partners and debt to facilitate rapid growth in sales and market share. When tempted by such thoughts, I think about what I might gain. Perhaps I could make more money, but I would also expect a lot more problems. Also, I think it might interfere somewhat with my family relationships, which are very important to me. Situation 2 Bear Bills, Inc. was started in 2008 by three Baylor University alumni in their early twenties as a solution to a problem every college student faces—paying utilities. The company's name originated from the university's mascot, the Baylor Bears. The business helps students pay their utility bills without all the hassles of having to collect from each roommate and getting a check to the utility company. Bear Bills pays the bills each month and splits the amount based on each student's prorated portion. The utility companies like the arrangement and are willing to give Bear Bills a commission for increasing their market share. The apartment houses where the students live like the deal because the utilities remain in the renters' names and the management receives a referral fee from Bear Bills. Of course, the students sign up because they do not have to bug a roommate to pay their share of the bill. And Bear Bills makes money. The first year, Bear Bills signed up over 2,000 college students at the university. The second year, it incorporated as Simple Bills, Inc., and went to other college campuses, doubling its customer base to over 4,000. At this point, the concept is proven, but the owners have a decision to make. They can raise money from investors and grow the company faster to capture market share, but that will mean they will have to give up some of their ownership in the company. Alternatively, they can continue to bootstrap the business to conserve ownership percentage but then cannot grow it as rapidly. In other words, they would limit the growth of the business to what can be financed from the cash flows currently being generated from operations. Situation 3 Bracken Arnhart, the founder and CEO of WSR Tool Services, Inc., has immersed himself for the past 10 years in growing his business and has been unquestionably successful in doing so. When he started the company, there were only three employees. Today, he has over 100 employees, and he has achieved more than he even had hoped for in terms of financial rewards. To realize the goals, he set out for the business, Arnhart knows it has been at some cost to his personal and family life. He explains that he always tries to be at home when his children get up in the morning and is there to help tuck them into bed at night. The rest of the time, he is focused on the business. In discussing his work-life balance, he says, Living a balanced life is generally more accepted by society than sacrificing much of one's time to pursue one thing. However, I would argue that to truly do something great, one must give an inordinate amount of time and hard work to see it come to pass. There are the people that are just not okay with the fact that there are only 24 hours in a day. However, unable to alter this fact of life, they are bent on wringing the most out of those 24 hours, and doing it eight days a week, 53 weeks out of the year, only slowing down when they die (and even then, still going at about half-pace). They welcome angels such as caffeine, and curse crutches such as food and sleep. I would probably fall into this category. I would say that I have exchanged work-life balance for building a business. I am told that I'm hard to get ahold of, and even when I do have “free time,” my mind is still fully engaged with my business. I am passionate about what I am doing and wouldn't want to be doing anything else. I'll admit that I may miss meals, social events, and really anything that could distract me from my goal, and I am generally okay with it. I believe that this is perfectly acceptable for entrepreneurs, possibly even necessary. Work-life balance is a great debate between entrepreneurs, small business owners, and even those attempting to climb the corporate ladder faster than most. Many are of the opinion that living a balanced life is essential for personal “success,” whatever that may look like. However, I strongly believe that tipping the scales toward building a business is the only way to go. In Situation 1, should this venture be regarded as entrepreneurial? Is the owner a true entrepreneur?
Read the following scenarios, then answer the questions that follow.
Situation 1
In the following statement, a business owner attempts to explain and justify his preference for slow growth in his business.
I limit my growth pace and make every effort to service my present customers in the manner they deserve. I have some peer pressure to do otherwise by following the advice of experts—that is, to take on partners and debt to facilitate rapid growth in sales and market share. When tempted by such thoughts, I think about what I might gain. Perhaps I could make more money, but I would also expect a lot more problems. Also, I think it might interfere somewhat with my family relationships, which are very important to me.
Situation 2
Bear Bills, Inc. was started in 2008 by three Baylor University alumni in their early twenties as a solution to a problem every college student faces—paying utilities. The company's name originated from the university's mascot, the Baylor Bears. The business helps students pay their utility bills without all the hassles of having to collect from each roommate and getting a check to the utility company. Bear Bills pays the bills each month and splits the amount based on each student's prorated portion. The utility companies like the arrangement and are willing to give Bear Bills a commission for increasing their market share. The apartment houses where the students live like the deal because the utilities remain in the renters' names and the management receives a referral fee from Bear Bills. Of course, the students sign up because they do not have to bug a roommate to pay their share of the bill. And Bear Bills makes money.
The first year, Bear Bills signed up over 2,000 college students at the university. The second year, it incorporated as Simple Bills, Inc., and went to other college campuses, doubling its customer base to over 4,000.
At this point, the concept is proven, but the owners have a decision to make. They can raise money from investors and grow the company faster to capture market share, but that will mean they will have to give up some of their ownership in the company. Alternatively, they can continue to bootstrap the business to conserve ownership percentage but then cannot grow it as rapidly. In other words, they would limit the growth of the business to what can be financed from the cash flows currently being generated from operations.
Situation 3
Bracken Arnhart, the founder and CEO of WSR Tool Services, Inc., has immersed himself for the past 10 years in growing his business and has been unquestionably successful in doing so. When he started the company, there were only three employees. Today, he has over 100 employees, and he has achieved more than he even had hoped for in terms of financial rewards.
To realize the goals, he set out for the business, Arnhart knows it has been at some cost to his personal and family life. He explains that he always tries to be at home when his children get up in the morning and is there to help tuck them into bed at night. The rest of the time, he is focused on the business. In discussing his work-life balance, he says,
Living a balanced life is generally more accepted by society than sacrificing much of one's time to pursue one thing. However, I would argue that to truly do something great, one must give an inordinate amount of time and hard work to see it come to pass.
There are the people that are just not okay with the fact that there are only 24 hours in a day. However, unable to alter this fact of life, they are bent on wringing the most out of those 24 hours, and doing it eight days a week, 53 weeks out of the year, only slowing down when they die (and even then, still going at about half-pace). They welcome angels such as caffeine, and curse crutches such as food and sleep. I would probably fall into this category.
I would say that I have exchanged work-life balance for building a business. I am told that I'm hard to get ahold of, and even when I do have “free time,” my mind is still fully engaged with my business. I am passionate about what I am doing and wouldn't want to be doing anything else. I'll admit that I may miss meals, social events, and really anything that could distract me from my goal, and I am generally okay with it.
I believe that this is perfectly acceptable for entrepreneurs, possibly even necessary. Work-life balance is a great debate between entrepreneurs, small business owners, and even those attempting to climb the corporate ladder faster than most. Many are of the opinion that living a balanced life is essential for personal “success,” whatever that may look like. However, I strongly believe that tipping the scales toward building a business is the only way to go.
In Situation 1, should this venture be regarded as entrepreneurial? Is the owner a true entrepreneur?
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