Product details

By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them.
You can change your cookie settings at any time but parts of our site will not function correctly without them.

Abstract

This case illustrates the start up and growth of a recruitment business and subsequent decision by one director to start up her own business. The remaining directors are faced with the decision whether to sell a division (ie harvest) and for how much. The outgoing director is faced with alternative options for starting a business, should she buy the business and how much should be paid for it. The case study illustrates the negotiation process in buying and selling, and techniques for valuing a business. It raises the strategic issues such as harvesting and financial constraints in achieving growth in an owner managed business. The case study is a good basis for class discussion and individual and/or group analysis. Different groups can take on the role of buyers and sellers. Discussion points for the sellers are what are the issues and problems if they don''t sell. What are the alternatives to selling, the benefits, and the strategic and operational implications. The importance of the personal motivations of the directors can be explored. Negotiation tactics such as how should the remaining directors deal with the director who is leaving can be raised. The advantages and disadvantages of buying the business and alternatives for the buyer can be discussed. The case study is aimed at students who are taking an advanced small business or entrepreneurship course at undergraduate or post graduate level. This case was first prize winner of the Scottish Enterprise 1996/97 case writing competition.
Location:
Industry:
Size:
Small business
Other setting(s):
1996

About

Abstract

This case illustrates the start up and growth of a recruitment business and subsequent decision by one director to start up her own business. The remaining directors are faced with the decision whether to sell a division (ie harvest) and for how much. The outgoing director is faced with alternative options for starting a business, should she buy the business and how much should be paid for it. The case study illustrates the negotiation process in buying and selling, and techniques for valuing a business. It raises the strategic issues such as harvesting and financial constraints in achieving growth in an owner managed business. The case study is a good basis for class discussion and individual and/or group analysis. Different groups can take on the role of buyers and sellers. Discussion points for the sellers are what are the issues and problems if they don''t sell. What are the alternatives to selling, the benefits, and the strategic and operational implications. The importance of the personal motivations of the directors can be explored. Negotiation tactics such as how should the remaining directors deal with the director who is leaving can be raised. The advantages and disadvantages of buying the business and alternatives for the buyer can be discussed. The case study is aimed at students who are taking an advanced small business or entrepreneurship course at undergraduate or post graduate level. This case was first prize winner of the Scottish Enterprise 1996/97 case writing competition.

Settings

Location:
Industry:
Size:
Small business
Other setting(s):
1996

Related