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Entrepreneurial Mindset

Entrepreneurial Mindset

Statement of Problem Satellite problems: There are several satellite problems that are effecting Scott’s current situation. • Scott’s skills do not transfer well to the small business setting. This will make his business endeavour that much more difficult to achieve. •He has no immediate technical support to help him run his business since none of his family members ever owned a business. •He lacks confidence in his abilities to run his own business. •He does not know what kind of business he wants to have. •Scott feels increasingly unfulfilled with his current employment.

Primary problem: Scott Mackay wants to start his own business. He doesn’t know which strategy to follow in order to become a business owner. He therefore needs help determining his best course of action while considering the fact that that he has been successfully working at Manulife for four years. Assumptions: Several assumptions can be made about Scott’s situation. •He lacks management skills, and this is illustrated by the fact that he is not confident about his chances and also by the fact that his skills do not translate well into a business-decision environment. He does, however, perform very well at his job. “.. he has been quite successful. He has received raises and promotions” •He also has substantial personal savings that he can access easily. “.. has built up some savings during his time at Manulife Financial” •He is also seeking a new challenge, in his life, as shown in his feeling of being unfulfilled. “he has not felt truly fulfilled” •Based on the information provided, it appears that he has to decide whether to become his own boss, or keep working as an employee (not his own boss). All of his life he has dreamed of running his own business” “He only knows that he wants to be in charge” Implications: There are implications of the current situation involving Scott and Manulife. The implications can be divided into two sections: on the organization (Manulife) and on the personnel (Scott). Implications on the organization •The company could undergo a decrease in productivity because Scott’s state of mind could lead him to be less productive which in turn may cause a ripple effect among the employees. •Scott’s company branch will operate less effectively and efficiently, again because of Scott’s state of mind.

Goals and objectives will not be met, and resources will be used in a non-optimal fashion, or just wasted. •As a highly decorated employee if Scott will become disgruntled at his position this will lead to low morale among the employees around him. •If Scott’s work becomes less effective and less efficient and as the company front face he will tarnish the company’s reputation. •The drop in efficiency and effectiveness will require the company to compensate through other employees and tactics, which will ensure a rise in operational costs. Implications on Personnel If Scott does not start his own business, he will feel increasingly unfulfilled. •He will also never know the thrill or the feeling of running his own business. •His skills will never be used beyond Manulife as long as he is working there. •He will never be his own boss. •He may never do anything fruitful with his savings that he has been accumulating from his work at Manulife. •He will never know if he can be successful as a business owner and his potential, ambition and enthusiasm will be wasted. Alternatives 1. Status Quo Description: Scott remains at Manulife and doesn’t start his own business.

By definition status quo is a lack of change. No attempt will be made by Scott Mackay to alter his current situation. His primary source of income will not change nor will his responsibilities or personal liabilities. As he remains an employee of Manulife, the effects on the company depend on his performance which in turn depends on his sense of fulfillment. Pros: •He will never have to take the risk of losing his money. •His job and income will remain secure as he stays at Manulife. •Manulife will continue to benefit from his skills and competencies and his ability to produce value for the company. He will not have to worry about the usefulness of his acquired skills. •His relationship with Manulife will grow as he continues to work there. Cons: •His energy will never be used towards being a self-employed entrepreneur. •He will not use his savings productively. •Manulife’s performance will decrease as Scott’s performance decreases. •Employee morale will suffer as Scott’s morale sinks. •He will never be his own boss, or have the opportunity to run his own business. Analysis: Overall, the cons of the status quo choice for Scott outweigh the pros.

While he will not risk losing his money by remaining at Manulife, it is clear that Scott would never get the chance to live his dream of being self-employed. His aspirations to be his own boss are more important to him than keeping his savings. He claims to have wanted to start his own business his entire life and does not seem to be risk-averse to the point where he is willing to never invest his savings. His main obstacle to pursue this project is not the threat of the risks involved, but a lack of self-confidence, especially when it comes to his skills in a business environment.

His main objective appears to include self-fulfillment, as opposed to mere financial security. It is unlikely, considering the fact that he has only been at Manulife for four years, that he would somehow reach his objective of feeling accomplished without going into business himself. In other words, in terms of personal morale, the chances of things getting better for Scott are quite small. If Scott does not start his own business, Manulife will have to deal with an employee that is less and less driven to perform well, and less and less satisfied with his occupation.

The company’s performance will suffer, as will the morale of Scott’s fellow employees. Choosing not to go into business is not the best choice for Scott Mackay. This is not a viable solution to Scott’s needs, and it does not help him generate business ideas in any way. 2. Franchising Description: A franchise consists of a franchiser and the many franchisees that it may have. “Franchising is an agreement that gives franchisees the right to sell the product of the franchiser” (Griffin et al, 2009, pg 98). A franchising agreement needs to be signed between the buyer and the company.

The agreement details the duties and responsibilities of both parties, what is required to operate the business, the expectations of the parent company and other elements such as trademark protection and other obligations (Lorette, n. d, para. 2) Pros: •The business has an already well established reputation and brand loyalty. •The likelihood of the success of the business is maximized since the franchise is already thriving. •The franchisor may offer training programs to the franchisees in order for them to become successful managers. Scott will run the business and its success will ride on his decisions. •He will be able to keep most of the profits. •Scott can save time and money by not having to build a business from scratch. •Franchiser representative could visit Scott to provide expert advice on how to run the business. (Griffin et al, 2009, pg. 100) Cons: •The initial costs of franchises are usually very high. •Scott will need to cover operational expense and emergency needs for the first six months. •Some Franchises contracts could be very strict which can become restrictive to Scott’s idea of running the business. Scott must pay advertising fees if he wants the franchiser to advertise in his business area. Analysis: Franchising will finally enable Scott to be his own boss and achieve his long life dream. Although the initial costs maybe high but with Scott’s savings and his risk-taking attitude, money would be the last thing to hold him back. If he were to run into any trouble financially, the franchiser could provide financial assistance in the form of loans or could help Scott obtain loans from banks and other local resources.

Considering the low failure rate compared to new ventures that start from scratch and the attractive benefits tied to franchising this is the easiest way to solve Scott? s problem of not knowing what kind of business he should own. The only problems are raising the capital needed for the start-up cost and the availability of the franchise. If Scott acquires a franchise he will be able to run his own business and to use the corporate management skills of the big franchiser to his advantage.

Franchising will be costly at first, but the rewards that come after that are worth the money and effort and later cost incurred later could be covered by the business itself. This alternative maybe the answer that Scott is looking for. He can run his own business and rely on the big business management experience and skills. The money he saved will serve him well as payment for the initial costs and he can work hard and start generating new money fast. 3. Buying an Existing Business Description: Scott could buy an existing business with a formal organizational structure which will have better odds of success.

An existing business would already have a management structure and is already established in the market place. The existing business has already formed relationships with lenders, suppliers and other stakeholders and is able to attract customers (Griffin et al, 2009, pg. 98). Scott can work with its successful organizational structure and start with the small business he always wanted. Pros •The business is already established and has its organizational structure and culture. •Trained and experienced employees already work at the establishment. The business has already acquired its place in the market and the industry. It has relations with suppliers, lenders and customers. •Since the business is already a working entity buying it would be less risky than starting a business from scratch where outcomes are uncertain. •Because of its existing history and track record the business is able to provide a clearer picture in what to expect in terms of sales and market potentials. Cons •Since the organizational culture is already established there might potential issues with taking control.

Employees many not appreciate the new management vision or new plans. •As a new owner Scott may face resistance from the old employees who are used to an already established structure. •After buying the existing business Scott will not have access to the old owners’ management skills and expertise. He will be left to figure things on his own. •Since Scott skills are not transferable to the small business world and some small business can be very complicated (example: piece designs, manufacturing, engineering based business), he might have hard time understanding the business before even trying to run it. There could be a host of problems that Scott as a buyer will not notice till later. The business may have a poor reputation or poor location, unsatisfied employees or customers, etc. •It often difficult to determine a fair purchase price for small business and although Scott does have his savings he would not want to waste them on overly priced business. Analysis: This alternative will allow Scott to take an existing business and run it the way he sees fit. He can grow and expand by creating a new infrastructure or reformulating the already existing one.

Although he will have all the business and operation protocols set in place he might have difficult time understanding them or following through with them. To run an existing business successfully Scott needs to understand the ins and outs of the management, operation and the sale aspects of this entity but he lacks these skills. Buying an existing business may not cost Scott much money, and the success and the failure of the business will definitely rest on his shoulders but he will never have the support or the knowledge he needs to run this business.

Another problem he may face from purchasing an existing business is the stakeholders’ resistance to a change in the organizational culture. Culture is formed early in an organization and becomes embedded. He might not be able to implement new changes or even gain the trust of people around as the new owner. This is one alternative Scott may not be able to consider unless he has great background in small business management and he picks a business and industry that is tailored to his experience. For him buying an existing business that offers no support is not a viable option. . Starting a business from Scratch Description: Starting a business from scratch requires having an idea that will be great for business or identifying an opportunity in the marketplace (Griffin et al, 2009, pg. 84). For this Scott need to recognize and seize an opportunity that is marketable and will generate profit. Starting a new business will require accessing the resources and the fit of the opportunity but most of all it requires a formulation of a business plan that will act as the guideline for operation. Pros Starting a business from scratch can be very fulfilling to Scott as he sees his own ideas, efforts, investment and ambition come to fruition. •Total freedom in the running and operation of the business. Every decision Scott make will be his own and every choice his make will affect his business accordingly. •Freedom to be creative and innovative. There will no rules to follow or strict guideline to adhere to. Scott can become an “outside of the box” thinker in his quest to find the best business idea out there. •It could be very simple to start if Scott chooses to be a sole proprietor.

It will also be very low cost to start. Cons •The whole process will rely on one individual, Scott. He will have to do everything, from creating a business name to promotion, and he must make all his own decision. •Requires identifying a new idea that could translate into successful business. •Starting a new business needs a lot of planning a long time conducting market studier, research and coming up with business strategies. •Failure rate is higher when compared to other forms of business (Vitez, n. d. para. 6) Analysis:

Starting a business from scratch will satisfy Scott’s need to be in charge and thirst for the thrill that success or the failure of the business would rest on every decision he makes. He will be responsible for everything from the name of the business to the financial reports and tax claims. He will be free from strict large corporate structure and have total control. Every move he will make will affect the business and he will experience what it truly means to run a small business. But an entrepreneur must have a wide variety of skills in order to run a successful business.

Scott might have the initial capital to start a business from scratch but he lacks the skills to do so and most importantly he lacks the good ideas that will generate profit and can be turned into a business venture. As Scott’s experience, skill and ideas are very limited at this time, starting a business from scratch is not a path that he should choose. 5. Intrapreneuring Description: Intrapreneuring allows the development of a new idea or a new innovation in a small business environment with the confines of a large corporate structure.

Intrapreneuring with Manulife would mean Scott must have a vision of how things should be done differently in order to benefit the company and the intrapreneur. In order to start a small business environment with a large company Scott must find an opportunity that he wishes to pursue. This opportunity must provide Manulife with a new edge in its marketplace and gives it a stronger competitive advantage, only then will Manulife provide Scott with the intrapreneurship and the small business opportunity the he covets. Pros There will be little risk when starting an intrapreneurship. Scott will not have to risk any of his money and he will rely on Manulife financial resources. •Scott could rely on Manulife business management expertise to help him develop his business idea. •Scott has excellent knowledge and business skills when it comes to Manulife and the insurance industry. Both of which could be put to good use in order to develop his business idea. •Scott will have access to all of Manulife’s resources (physical, financial, Human and information). Cons Scott will still need to come up with good idea within the insurance industry that will generate profit for Manulife. •Manulife may reject Scott ideas for intrapreneurship and may not agree with what he finds as a new innovation. •Scott will not be the owner of this business nor will he have full control. He will only be managing a sector from Manulife. •The intrapeneurial sector would have more of a “groupthink” way of producing decision, and may influence Scott’s initial idea in a bad way. Analysis: Scott feels insecure about running his own business.

Not only is there a lack of business ideas, but also there are very limited resources he could reach out to for help, as he would be the first in the family to start a business. Intrapeneuring would allow Scott to start a business within the existing company. This would benefit Scott because it would eliminate the risk of starting a new venture, he would receive help and guidance because he is already successful within the business and he wouldn’t need a large amount of financing, if any at all. However Manulife financial would have to agree to the terms and Scott would not own all of the company.

The most important aspect of this solution is innovation, the discovery of a new idea or a new product that will give Scott and Manulife a great advantage in their industry. Since Scott seems to be lacking in good business ideas this may not be the best solution for him to pursue. Recommended Solution: Franchising Buying a franchise is the perfect solution for Scott current dilemma. Scott Mackay has always dreamt of owning his own business and always wanted to be in charge. He is a hard working man who performed admirably at his current job at Manulife.

He has acquired some savings from his current job but lacks the skills needed for running a small business. In light of all the previous facts, franchising is the perfect fit for Scott Mackay. Buying a franchise maybe costly but money is not a concern for Scott. He is not averse to risk taking and wouldn’t mind spending his savings if it means achieving the dream of a lifetime. Since he does not have the skills required for running a small business nor the technical support, considering none of his family has ever owned a business, franchising will ensure that he is covered in the areas he lacks.

Although the franchisers contracts are strict they offer the structure that Scott needs as a first time owner. They will also offer him a direction on which to enforce all his efforts. Franchisers will offer Scott the training required to run the new business and will always be there for him to go back to and ask for advice or use their business expertise for help with any situation he may find himself facing. Training maybe costly and take up much of Scott’s time but it a scarifies he must make in order for him attain all the necessary requirement to run his business successfully.

This knowledge will give him the confidence he lacks and push him into realizing higher goals and greater profit for both him and the franchisers. Owning a franchise means Scott will finally become his own boss and be in charge. This business success and failure will ride on every decision he makes. These new challenge will change Scott’s life and outlook. He will finally find the fulfillment he was seeking as he will be in control of this new domain. Franchising is the best course of action for Scott to choose to achieve his quest for owning a business.

It will offer him the thrills and achievement he seeks and will provide him with the skills he lacks while still making a profit and benefiting both himself and the franchiser. Scott’s decision to acquire a franchise and leave his current job at Manulife may have a negative impact on Manulife in the short run as they will be losing a valuable and profit generating employee, but in the long run it will be to their benefit. Since considering if Scott were to stay in his current job he will be disgruntled with his position and may cause many mishaps to his employer.

This decision will also be of a great benefit to the franchiser whom Scott will buy from. Scott will be paying royalties and generating profit for the franchiser. But the greatest beneficiary of this decision will always be Scott. Fulfilling a lifelong dream is achievement very few people would ever enjoy. The sense of satisfaction and greater purpose that Scott will enjoy will help give confidence and push into greater and greater achievements. His success would know no bounds and so will his profits. Franchising may not be for everybody but it is the best fit for Scott Mackay.