Business Administration Case Study

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Business Summary

According to the existing information, Carlos does not want to retire and instead, wants to start his own brick-and-mortar business, as he sees that printed books and magazines no longer attract readers. The financial state of affairs suggests that Carlos is not going to experience any monetary issues with a severance package of $50.000, a monthly $1.800 house payment, and a grown child that lives away from home. The future of Carlos’s business looks bright, as he has a specific plan that he is willing to follow in order to appeal to potential customers. Carlos’s potential business partner, Julio, is hesitant about being one of the business owners while Carlos himself is also interested in how his imminent company could interfere with training time. It is rather unlikely that Carlos is going to meet any financial difficulties along the way. Still, it is also important to remember that the modern business environment requires a specific approach to marketing and management. This means that the prospects of Carlos and Julio’s business depend on their ability to adhere to the ever-changing business trends.

Situation Analysis and Recommendations

The first thing that Carlos has to do is to determine whether he is going to be a small business owner or an entrepreneur. The current decision depends on the size and source of investments that have to be made in order to keep the business alive (Djupdal & Westhead, 2015). Knowing that Carlos already has a specific amount of money (limited resources), it may be safe to say that he will become a small business owner. It would keep Carlos satisfied while also giving him a competitive advantage of uniqueness.

To make a decision regarding how much capital is needed to start the business, Carlos should evaluate the amount of expenses required to erect and maintain a brick-and-mortar enterprise. The vital variables that Carlos should consider are public utilities, weekly and monthly re-stocking, and technical equipment. Without these three, he will not be able to maintain competitiveness and adhere to the legal requirements.

In the case where Carlos requires financing, he will be obliged to provide income and cash flow statements in order to be able to represent his economic excellence. Throughout the first several years, Carlos would also have to pay extreme attention to the cash flow of his business. The reason for this is that the lack of income would negatively affect his ability to maintain a decent level of production.

When picking the best form of business organization, Carlos should pick between sole proprietorship and partnership. Due to the fact that Julio is hesitant about his role, it may be safe to have Carlos choose the sole proprietorship option. Even though it would leave him liable for all business debts and limit him in terms of available resources, it would be the best choice because Carlos would be able to evade severe regulations and make the best use of all profits.

Evidently, if Julio decides to support Carlos in his decisions, it would affect the form of business and turn it into partnership. In this case, both of them will be responsible for debts and expenditures, with the partnership ending right at the time when Julio decides to withdraw. The main benefit of the partnership between Carlos and Julio is that it offers the same level of flexibility as proprietorship while also allowing partners to share company profits equally.

From the case description, it is evident that Carlos is an old-school businessperson who is not very well versed in new technologies and digital marketing. It may be safe to say that he could successfully reach potential customers via all the other marketing channels such as radio or newspaper ads. Nevertheless, Carlos should not ignore the value that social media marketing could bring, especially given that it is somewhat cheap and accessible to anyone.

At the existing point, Carlos might benefit from the help of an SEO specialist who would develop a campaign intended to promote his equipment store. Even though traditional marketing would also work for the current company, a certain degree of digitalization would help Carlos and Julio create a better image for their business. Without an expert in marketing, Carlos would struggle and spend more financial resources to support his business because the number of customers would not grow with time. The marketing expert would also help the owner to find ways to appeal to customers with the help of personalized services.

In the case where an SEO specialist is hired, Carlos would have to manage them recurrently. This is going to be necessary because business owners have to make sure that core objectives are attained and the company’s image is positive. In the case where the partnership form of business is chosen, Julio could manage the SEO-related issues while Carlos would ensure that all other aspects of business are intact. In the long run, Carlos and Julio could expand their team and hire more specialists in digital marketing in order to conquer the local market entirely.

Reference

Djupdal, K., & Westhead, P. (2015). Environmental certification as a buffer against the liabilities of newness and smallness: Firm performance benefits. International Small Business Journal, 33(2), 148-168.

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BusinessEssay. 2022. "Business Administration Case Study." November 8, 2022. https://business-essay.com/business-administration-case-study/.

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