ATENEO PROFESSIONAL SCHOOLS

Graduate School of Business

CASE ANALYSIS: BLACK-JACK ANTIQUES

PRIMAN S17

Submitted to:

PROF. NICOLAS LANSANG

Submitted by:

Aseron, Anna Lourdes

Loredo, John Paul

Villena, Pocholo
1. If you were Kevin, how would you initiate a conversation with Jeremy? What
would you want to learn? What would you say?

I would initiate a conversation with Jeremy by going back to the reason why their
friendship blossomed and they went to business, and that is their love for antique
furniture.

During the conversation, I would like to know the reason why Jeremy is considering
leaving the business to work for another company because by knowing these reasons,
I would be able to formulate solutions to make him stay in the company because not
only will the company suffer because one of its services will be gone, but at the same
time, my livelihood will suffer since I am old and looking for another source of income
will be difficult.

Besides this, I would also say the adjustments that we can do to make operations
better and increase profit if those are his concerns.

First is creating a partnership agreement. This will specify the shares of the partners
in terms of responsibilities and resources. Also, this will indicate how each partner will
contribute their expertise. (Daft, 2014) In this case, Kevin on sales and business-side
and Jeremy on the restoration side. By doing this, the distribution of the resources will
be fair depending on the investments a partner has put in the company. This is to also
eliminate the concern of Kevin of not getting what is due to him.

Second is creating a business plan. A business plan is a document specifying the

details of the business. Also, if a business plan is written carefully, the business will
have a higher success rate than those without a business plan. (Daft, 2014) By
combining their knowledge and spending time and effort on creating a business plan,
they will be able to have a clear direction of where the business will go in the long-
term. They will also be able to think of the problems and issues that they might face.
Knowing these is crucial for the success of the business because they will be able to
think of solutions to prevent these issues and problems from happening. Also, if they
will be needing additional funds or investors to further grow their business, having a
well-written business plan will attract investors.

The third is to participate in a business incubator.

“Business incubators help start-up companies by connecting them with a range of

experts and mentors who nurture them, thus increasing their likelihood of success.
(Daft, 2014, pg. 205)

When Black Jack Antiques will face a problem, Kevin and Jeremy can consult
experts and mentors who had experiences in the past that are similar to the problems
they will face. This will also broaden the scope of the business by connecting with
 other start-ups. Doing so will expand their operations and identify new market
opportunities for their current line of business.

Lastly, I would tell Jeremy the benefits of making the business work. Since he
currently has a lot of personal debt, I will tell him that as his business partner and
friend, I will help him get through those challenges by growing the business. I will also
ask for his participation because the business can only grow if he is 100% in it and for
us to reach the full potential of the business, we must have our vision aligned and we
must give our all in the business.

2. What does this case illustrate about the risks of starting a business with a
partner? How might those risks be minimized? Explain.

Risk in the contribution of responsibility, resources, and expertise:

1) Kevin and Jeremy share a common interest in Antiques, although different aspects of
it. Kevin is into antique collections, while Jeremy is into antique restoration. The
partners have different areas of expertise which they are bringing and using in the
business.
2) Kevin put in the money in the business since he is the one who is able to secure start-
up loans. Jeremy has personal loans and low credit. The contribution in terms of
monetary value were not equal and might put the partnership in a different level of
authority and importance.
3) Kevin is business savvy, while Jeremy has construction skills. The difference
contribution in terms of responsibilities may also pose as a risk since one partner does
more of the manual labor.
4) If one leaves, in this case Jeremy, the business will undergo difficulty since half (which
is a big portion) of the business relies on him.

“To avoid misunderstandings and to make sure the business is well planned, it is wise
to draw up and sign a formal partnership agreement with the help of an attorney. The
agreement specifies how partners are to share responsibility and resources and how
they will contribute their expertise. The disadvantages of partnerships are the
unlimited liability of the partners and the disagreements that almost always occur
among strong-minded people.” (Daft, 2014, pg. 197)

Minimizing risks:

1) Creating a business plan and a formal partnership agreement.

Creating a business plan contributes to high uncertainty avoidance. The partners

will have a better picture of what they want achieved moving forward. The company
may have existed for years already, but there will come a time that it can be stagnant
if plans for growth or for the future are not set. Of course, each partner would want to
 know what is in it for them in the long run. It will motivate them as well to make their
business grow.

A formal partnership agreement drafted with the help of a lawyer will put into
consideration issues that may not have been foreseen by the partners. Especially if
the partners simply created their business out of passion, which in this case, their love
for antiques. The agreement may also include monetary issues such as the possible
splitting of profits or proper compensation of each one. The agreement may also
protect each partner if there will be a possible separation in the future.

2) Layout clear contribution of responsibilities. This way, each partner would feel equal
importance or bearing in the business. Each would realize that , as equal owners, the
success of the business is highly dependent on the task of each one and the
interdependence of making both work.

3. Do you think Kevin could make a go of the business alone? Should he try?
Discuss.

It would be really challenging for Kevin to pursue this venture alone

considering he already has a difficult time managing the business’ day-to-day
activities. The stress of solely managing the business would surely take a toll on him.
In addition, it was Jeremy who provided the company a solid customer base because
of his reputation in furniture restoration. Should he decide to let Jeremy walk away,
there’s a strong likelihood that most, if not all, of their existing customers would also
move to the nearby furniture design firm. Not to mention, the company would also
lose a huge chunk of its revenue from furniture restoration.

From the group’s perspective, it would not be wise for Kevin to push through
with the business alone since there is a huge risk of failure. Since he secured the
startup loans, it would be a huge burden for him to repay all those financial obligations
if the business is not working. In addition, with his advanced age, there are limited
options for him to fall back on should he decide to sell the business or if the business
fails. The group thinks that the best option for Kevin is to convince Jeremy to stick
with their business.
 References:

1. New Era of Management Eleventh Edition. Richard Daft, 2014.