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Case Study 3 The New Vine

Case Study 3 The New Vine

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Published by Heidi

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Published by: Heidi on Aug 12, 2008
Copyright:Attribution Non-commercial


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Case Study #3: The New Vine
 This case is to be used in conjunction with Modules 6, 7,9,11, and 12. Thebusiness counselor should read the case, and then respond to the questionsat the end of the case. The Training Coordinator may ask for your answerseither in writing or by verbal discussion.
The New Vine
 Judy Vine is your 2:00 client. All you know about her is that she wants to starta new computer consulting company, and that she has already attendedyour center’s seminar, “Start Your Own Business.”When Ms. Vine arrives, you are immediately impressed by herprofessionalism and intelligence. She tells you that she, and about eightother computer wizards, have recently been informed that their jobs at alarge company are being eliminated in six months. She has her degree incomputer science and has been employed by several companies inprogressively higher positions (and increasing income) for the last five years.She has never owned her own business.When Judy got over the shock of being let go, she decided to start her ownconsulting company to provide computer experts to firms needing hardwareor software expertise. She feels that four or five of her co-workers will beinterested in working for her, a few of whom will be short term until theyfinds something better.She believes that there is a market for her consultants. A consultant couldhelp a business owner analyze a firm’s IT needs, determine the appropriateequipment and software to purchase, supervise the installation, and providetraining for the firms employees. Another service would be to provide one of her consultants as a “temp” employee. Troubleshooting would be a servicethat she is convinced would be in demand.Ms. Vine ahs an initial estimate that she will need $75,000 to start thebusiness and operate it fro six months. She owns her own home with about$10,000 in equity, and has about $10,000 in savings. Her parents own theirown business and are willing to invest any additional needed funds in hernew company, but want a share of the ownership in exchange. Like manyentrepreneurs, Judy is reluctant to share ownership. The “Start Your Own Business” seminar both excited her and overwhelmedher. Today, she has more detailed questions.
Questions to Answer
1.Does she meet the requirements for a bank loan? If not, what are theadvantages and disadvantages of accepting the equity financingoffered by her parents?2.How does she find out if she has any competitors? How can shedetermine if there are enough potential clients to justify starting thebusiness?

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