Jackie's Business Expansion Options:
Jackie has been presented with numerous options for expanding her business plan. The first offer allows her to form a business partnership with an established jewelry store owner who has a large inventory and multiple storefronts. The profits would be split in half, but after he retires, she could buy his share.
The second option allows her to work with a franchiser who would own her patent in exchange for 50% of profits for the first three years and 35% of benefits for the following three years.
Jackie could also take out a bank loan and expand her business on her own.
If Jackie chooses to work with Holland Hardy, she could get her necklet on an exclusive storefront which will guarantee a lot of customers. She will retain ownership of her patent and would get 50% of the profit without making any investment (Morris, 2011).
The disadvantages of this option are that she would have to purchase Hardy's stake at half its value, which is a loss in itself. There is also no timeline for Hardy's retirement and half of her sales could go to him for an extended period. While the franchise could get the Jackie the opportunity to get her necklet across stores countrywide, she would lose ownership of her product for a small fraction of the profit (Murphy, 2006).
The greatest advantage to be had from securing the bank loan is that Jackie would have full control of her business. She would own her patent, and the profit from any sales would all go to her (Awe, 2006). With the correct marketing techniques, she could grow her business exponentially and create her store fronts throughout the country. Unfortunately, sole ownership also exposes Jackie to all the risks. There is a chance that her business strategies might fail and as such she could lose most of the loan and make little or no profit. She could end up losing her business entirely.
The Best Option for Jackie:
The best option for Jackie would be to form the partnership with Holland Hardy. She would get her necklet in an exclusive storefront with an impressive inventory and an established clientele. She would also share the risk and get 50% of the profit for no investment. Eventually, she will own the entire business as Hardy has offered her an opportunity to buy his stake after he retires. This option has the lowest risk and the best reward.
References
Awe, S. C. (2006). The entrepreneur’s information sourcebook: Charting the path to small business success. Westport, CT: Libraries Unlimited.
Morris, M. J. (2011). Starting a successful business. London: Kogan Page.
Murphy, K. (2006). The Franchise Investor’s Handbook: A Complete Guide to All Aspects of Buying Selling or Investing in a Franchise. Ocala: Atlantic Publishing Group.
