Roxanne Quimby is an example of the type of person who can be an entrepreneur.
She identified in herself the skills and personality traits that enabled her to be successful: a strong will to be self-reliant and independent, ability to take risks, and vision for a future direction. Willingness to work hard, make difficult decisions, and take initiative are also traits that seem to be necessary. To run a successful company, Roxanne claims, all one needs to do is earn more than you spend. Having exposure to other businesspeople also gave Roxanne a general orientation to what business meant. Another thing that emerged as significant was her passion for the entrepreneurial spirit, for generating products and income, bringing something useful and productive into the world.2.
What are the risks, benefits, and tradeoffs of a lifestyle business vs. a high potential business- one that makes $5 million in sales and grows substantially?Having a lifestyle business can be more fulfilling than having a high potential business since a lifestyle business is based on the individual’s choices of how to live, whereas high potential businesses may be motivated more by ambition to make money or succeed, and may detract from a person’s broader life goals. On the other hand, one can make more money by having a high potential business, which can be very fulfilling.
For example, Roxanne has to choose between living in Maine – which she loved – in a lifestyle business, or relocating to North Carolina where she could expand the business and make more money. A high potential business requires the hiring of more talented professionals, since it would be too much for one person to do all the work. This is beneficial to the owner in the sense that s/he has fewer tasks to complete personally, but it can also be frustrating because having division of labor causes bureaucracy and can lead to inefficiency.
A perk to having a high potential business is the visibility and media attention a bigger business might have over lifestyle businesses.What is the difference between an idea and an opportunity? For whom? What can be learned from Exhibits C and D?Whereas the banker in charge of granting loans would have viewed Roxanne’s proposition for Burt’s Bee’s company as just an idea, and not something that seemed likely to be created and succeed, Roxanne saw Burt’s beehives as an opportunity for a great business. The difference, then, between an idea and an opportunity is being able to see a things’ potential. Exhibits C can teach us that over the years, more companies were developing. Cost of materials increased, as did value of shipment. Each year, companies in the toilet preparations industry become more and more expensive to operate.
Exhibit D demonstrates that even compared all other manufacturing sectors, operating and maintenance costs for the toilet preparation industry rose over the years.Why has the company succeeded so far?Roxanne and Burt succeeded so far since their product appealed to urban consumers for its simplicity and taste of nature. Also, Roxanne was able to make split second decisions about the business on her own, which enabled her to take risks necessary for success. Her vigilance about never allowing the business to be in debt also helped the company’s success. The outstanding chemistry of the two owners contributed to the success of the company, since there were no disputes and only agreement; Burt was so nonchalant and entrusted Roxanne with most of the important business decisions.What should Roxanne and Burt do and why?Their options are (1) moving completely to NC and becoming facial cream company, (2) going back to Maine and restarting the Bee business after negotiating lower taxes, or (3) selling the company and moving to India. Burt and Roxanne would seem to be the happiest if they could move back to Maine and run a lifestyle business of the products they are used to selling. Roxanne said herself that if Maine offered them even half the tax break of North Carolina, she would have stayed in Maine, so Maine is really where she wanted to be.
Also, being in North Carolina instead of Maine would detract from the natural, rural appeal to Burt’s Bee’s which so much pleased consumers.Finally, labor is very expensive in North Carolina, and Burt might have a difficult time readjusting to life outside the forests of Maine. Ultimately, this would be choosing a lifestyle business over a high potential business, and though moving back to Maine may mean that it will take longer for Roxanne to earn enough to be able to retire and travel to India, she will be more content all those years she will be working, since she will be living the best way she can. Moving to North Carolina is allowing business prospects dictate and overrule lifestyle choices; it would be a shame if Burt had to cut his long wild-man white hair just to fit into society in North Carolina.Another risk to moving to NC is that then they would have to share the stock of the business with other parties.
This would hamper Roxanne’s ability to make business decisions that may seem counterintuitive and risks but really are the right decisions, since every decision would have to be agreed upon by the shareholders they shared the stock with. Roxanne does not do well under circumstances of rigid supervision, and one of the things she loves about business is the opportunity it grants her for being independent and self-reliant. Moving to North Carolina will strip her of the things she loves about business, leaving her dissatisfied. If she is dissatisfied with her role in business, she is likely to abandon the company, which would be a shame since she worked so hard and gained so much pleasure in running the company.