Case Study: Recommendations for Expanding a Home-Based Business

This case study discusses the difficulties faced by Alison in expanding her home-based business and recommends franchising as a solution. It also highlights the challenges of running a home-based business and compares it to a store-based business. The report provides recommendations for Alison and other entrepreneurs to apply in real-time business scenarios.

Running head: CASE STUDY
CASE STUDY
Name of the Student
Name of the University
Author Note

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Executive Summary
A business environment is very dynamic in nature and any company who has been planning to
expand their business, needs to take certain considerations with which they will be able to
succeed in the future domain. The given report is largely based on a case study which underlined
the plight of Alison and the difficulties she has been facing in the business domain in lieu of
managing her business single handedly. The report will be discussing various opportunities and
options available to her and recommend the decision which need to be made. In this manner,
several other entrepreneurs like Alison can learn and apply the concepts in the real time business.

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Table of Contents
Introduction......................................................................................................................................3
Recommendation to Alison for Franchising....................................................................................3
Problems associated with growing Alison`s business further.........................................................6
Reasons while Alison is more likely to fail than a proper bespoke store business.........................8
Conclusion.......................................................................................................................................9
Recommendations..........................................................................................................................10
References......................................................................................................................................11

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Introduction
In order to make a business successful, an entrepreneur has to ensure that they are
successfully able to manage on the operational front well. As a business is not a single entity but
instead as social entity, any business will be greatly affected by the economic events in the
environment in which the business functions and shall also be affected by the life of the
entrepreneur (Baum, Frese and Baron, 2014, pg. 73-98). Moreover, in case the business is in the
form of a partnership, the enterprise needs to suit the needs and requirements of all the partners
in order to ensure a long term successful enterprise. In order to understand the underlying
business concepts more effectively, it is crucial to understand the concepts with the help of a
case study. For this reason the case of the `Bespoke Threads` will be used and the situation of
Alison will be used to analyze the prospects of business.
Recommendation to Alison for Franchising
From the given scenario, it can be clearly understood that in order to be successful in the
long run of the business, one needs to have a proper plan laid out. In order to begin something of
her own, Alison decided to get into the bespoke fashion industry with the help of her partner
(Storey, 2016). As they had no prior idea about the clothing business, they hired outside people
to handle the front. Although this provided to be a bit expensive in nature, it worked out well
with them and the business made continuous profits and was operating quite well. Moreover,
when they thought they could further expand their business and obtain the knowledge of a third
partner, they decided to hire a partner (Baum, Frese and Baron, 2014). However, the partner was
not able to manage the business well and based on this the business collapsed and the
organization had to be closed. However, the zest in Alison did not die and she continued to
function from her house. It was her hard work and knowledge which helped her to function well

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from her home. In fact working from her home helped her further as she was able to cut down on
a large number of costs. Moreover, even when the country was faced by an economic crises, the
home business continued to flourish. This was more suitable to Alison who had a family as well.
On a good note, the business of Alison has spread out considerably and reached to its maximum
capacity. She could have considered employing staff however, she knew it wouldn’t have been
possible to manage the staff that way. Hence, she has been considering to give out for
franchising (Beaverstock and Budd, 2013).
For this reason, it could be recommended to Alison that instead of continuing to conduct
the operations on her own at her place, she can give out the idea of the business for franchise and
in return gain considerable fee (Parker, 2018). This is being suggested because, as stated in the
case study, her home business has been operating at a maximum capacity and any change being
made would lead to inefficiency in the operations and would ultimately bring out the quality as
associated with her brand name. Hence, giving out the business for a franchise would be
considerably a good option. Moreover, the other reasons for franchising her business have been
given as follows:
Reduced pressure on her: As given in the case study, as her business has reached its
maximum capacity, she is already under a lot of pressure. Giving out her business for franchising
would assist her to ensure that she can balance her personal life well as well and continue
maintaining the quality if her business.
Ensuring quality: If she works more than her efficiency capability, the quality of the
business is bound to suffer (Hoy and Stanworth, 2014). This is because, she will single handedly
not be able to manage all the aspects of the business and moreover, in case she is able to the

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quality of her services are bound to suffer. Hence, in order to avoid this, she needs to give out her
business in the form of franchising.
Cost effective expansion: Moreover, considering the advantages of franchising the
business, the franchising procedure serves as a cost effective expansion technique because as
franchisees may handle the funding and research involved for the expansion, and thus Alison
will not be required to invest her own capital or the additional funding required for the same
(Fan, Kühn and Lafontaine, 2017, pg. 2082-2125). Moreover, she will also not be required to put
in human efforts for the same.
Support in marketing: The marketing done by the franchisee will help Alison to market
her business as well. This is because in franchising the name of the business will be the same and
hence, when the franchise will be advertising for their own business, Alison`s business would
become popular too (Schaper et al., 2014).
Additional source of revenue: As Alison will become a franchisor, she will be receiving
additional income from the franchisee in the form of royalty as per the agreement made during
the legal regulations (Wynarczyk and Graham, 2013, pg. 451-470). The royalties are generally
paid monthly and this will be beneficial for Alison.
Acquiring talent managers: The different talent managers who will be investing in the
franchising business, will have an interest in its success and will handle all the additional
responsibilities like workforce management and operational management as well. Had Alison
expanded on her own, she would have to invest her interests in all domains effectively (Brenkert,
2017, pg. 85-128).

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Scalability: Alison will also be able to successfully able to manage the size of the
franchise agreement and she can set the terms on her own will.
Additional assistance: Lastly, giving out the business in the form of a franchise will also
help Alison in situations where Alison may not be able to contribute well. In such a case, the
talent manager, will successfully able to assist Alison in her operations.
Problems associated with growing Alison`s business further
As stated in the previous section, it was given that Alison should probably expand her
business and give it away for franchising (Nijmeijer, Fabbricotti and Huijsman, 2014, pg. 62-83).
However, if Alison adopts the franchising option or may decide to expand the business on her
own, she might face the given problems:
Personal life: Expanding her business more than what it already is would have a deep
impact on the personal life of Alison. As given in the case study, Alison already finds it quite
difficult to manage her business from her own (Drucker, 2014). Moreover, in case Alison
decides to expand her operations, she would be then required to look out after two branches more
than one. This shall allow her very less time for herself and lead to health complications as well.
Limited access to funding: Expansion is a costly procedure. When a business plans to
expand, they need to ensure that they have adequate funding to meet up with all the related costs
associated with it. In case Alison, decides to expand her business, she would be required to
invest her limited funds for the welfare of her organization.
Balancing her life: As Alison has a family to look after, managing the expansion single
handedly will make it difficult for her to manage her life with their family like husband and

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children. If she is always involved with the business, she may miss out on the little pleasures of
life with her family (Kuratko, 2016).
Coping with the fear of failure: Alison may not be successful in expanding her business
enterprise. She may try to expand it but due to certain unforeseen circumstances she will not be
able find success (Gani, 2014). Hence, not only she will lose out on her resources in this manner,
she will also have to bear the psychological barrier of a failure. Hence, in such a scenario, she
needs to consider this dimension.
Lack of assistance: As Alison has to look after the business single handedly and without
any assistance, there are high chances associated with failure (McAdam, 2013). This is because,
her existing business already occupies with most of her time but in the future if she decides to
expand, she will not be able to manage both the businesses well.
Keeping up with the business market: The business environment is very dynamic in
nature and for this reason, it changes very often (Godlovitch et al., 2013). Due to this, it may
become difficult for Alison to keep up with the business market and adapt to the change in the
new trends which may take place. A majority of this can be contributed to her single operational
plan.
Less control over franchisee: The franchisee pays the royalties to the franchisor but may
be required to manage the business enterprise on their own. Hence, Alison would then have no
control over the business of the franchisee. If the franchisee is not honest in nature they may try
to deviate Alison`s business towards their own one.

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Regulations: Moreover, there are various legal obligations associated with the franchising
and Alison would be required to get her business registered successfully in order to ensure its
success. This may serve to be costly in nature as well.
Reasons while Alison is more likely to fail than a proper bespoke store business
Although a home business has several advantages associated with it like low cost
required, easy management, less overheads costs and other associated advantages. It can be
agreed that Alison is more likely to fail than a bespoke business which operates in a shop. The
reasons for this failure may be contribute to the following factors:
Home business is impacted by household distractions: The business which is based in the
household has high chances of being affected by the different events which tend to take place in
the household of Alison. As she has a small son, she needs to devote her time to her as well
which may act as a barrier for her in achieving operational efficiency.
Less professional: Although it is cost effected in nature, a store or an office in the house
may not be as professional as having a formally located office (Deluxe.com ,2018). It is all about
the perspective of the employees and as in this case it can be observed that the customers visiting
Alison’s home may feel that she is not professional and this affects the brand name of the
company she operates in.
No walk in traffic: The stores generally face a limited amount of walk in traffic. The walk
in traffic can be described as the traffic which is faced by the firm from the customers who often
visit the store in lieu of trying the products which are provided by the store and thereby this
increases the chances of the customer conversion rate. However, this is not the case for the

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business which Alison runs from her house and when faced by this, she might not be able to
convert the customers as there will be no walk in traffic at the stores.
Expansion is limited: As Alison has her options limited, the expansion aspect of her
business is quite limited in nature (Lee et al., 2015, pg. 28-37). She has no employees, no
assistant and other such resources, hiring them would increase the costs of her business and
hence, she would not be able to expand the business extensively as trusting extra employees is
not recommended.
Continuous presence: Moreover, the home business might fail because it requires her
continuous presence (Dees, 2017, pg. 34-42). A bespoke shop will be open even when the owner
of the shop is not present. However, in case Alison is not present at her house then, she will have
to close her home store as well. This could lead to a loss of customers and thereby increase her
chances of failure.
Hence, from the given analysis, it can be rightfully said that if Alison`s home based
business is compared to that of a shop based business of the bespoken wear, then due to the
given reasons, Alison`s business is more likely to fail.
Conclusion
Therefore, from the given analysis on the difficulties of a startup, expansion possibilities,
home run business and the management aspects, it can be rightfully stated that running a
business empire is not any easy task. Partnership does allow the enterprise to divide the different
opportunities which are available with the company, however, in case the partnership is
dissolved, the entire business can suffer. It also highlighted the advantages of giving the business
for a franchising and the various opportunities a firm would receive in lieu of that. Moreover, it

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assisted in understanding the manner in which a home run business is likely to suffer more than a
store running the same business. Hence, Alison needs to make the correct decision after
consideration of the different factors which are available in the given report. The following
section would provide certain general recommendations which can be adopted by an
entrepreneur to succeed in their business.
Recommendations
After analyzing the case study was based on Alison`s bespoke store and home business
the following recommendations can be made:
 Alison should not further stress herself and in case she is evaluating the different business
opportunities as available to her, she needs to ensure that she is successfully able to give
out the business expansion idea in the form of a franchising so that it can reduce the
business pressure and even have other financial benefits (Burns, 2016).
 Moreover, Alison also needs to ensure that although the home based business may seem
to be a viable option at present, in case of the product business she runs, she may be
required to shift her operations to professional office soon. Although it may add up to the
costs, they will also add to the welfare of the organization as well as the society at large.

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References
Baum, J.R., Frese, M. and Baron, R.A., 2014. Born to be an entrepreneur? Revisiting the
personality approach to entrepreneurship. (pp. 73-98). Psychology Press.
Baum, J.R., Frese, M. and Baron, R.A. eds. ,2014. The psychology of entrepreneurship.
Psychology Press.
Beaverstock, J.V. and Budd, L., 2013. International business travel in a digital world economy.
Brenkert, G.G. ,2017. Entrepreneurship, ethics, and the good society. In Entrepreneurship (pp.
85-128). Routledge.
Burns, P. ,2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
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Entrepreneurship and Sustainability(pp. 34-42). Routledge.
Deluxe.com ,2018. The top 10 challenges faced by entrepreneurs today: solved. Retrieved from
https://www.deluxe.com/sbrc/financial/top-10-challenges-faced-entrepreneurs-today-solved
Drucker, P. ,2014. Innovation and entrepreneurship. Routledge.
Fan, Y., Kühn, K.U. and Lafontaine, F., 2017. Financial constraints and moral hazard: The case
of franchising. Journal of Political Economy, 125(6), pp.2082-2125.
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