5.1 Choices to be made

Read through these additional points for our five case studies, note how they approach the six options you have just reviewed.

Bike-a-lot

  • The partners at Bike-a-lot are expert trainers and computer literate, and whilst they could create a website, the time it would take would be excessive. Also since the website is the main point for booking and payment then the extra confidence of using an IT expert is well worth the money.
  • The partners at Bike-a-lot considered leasing the motorcycles for the training but the high mileage they expected to cover and the additional insurance premiums meant that the monthly cost of a business loan was significantly lower than the leasing costs.
  • Bike-a-lot do not employ staff but have a number of associates who can be used at times of high volume or to cover holidays or sickness.
  • The partners do lease the storage and training facility. They have a small unit on an industrial estate. The cost of buying a training facility was prohibitive and would take more than ten years to recoup the extra costs over leasing.

JJ Components

  • JJ did not have a choice over leasing the manufacturing equipment. With it being specialised equipment, made to order, therefore purchasing was the only option.
  • JJ leases an industrial unit just outside the town. The leasing is a great option as this allows for the business to expand and move more easily than property that is purchased.
  • JJ employs two assembly technicians. In a business where quality is paramount, there is a need for a consistent and skilled workforce.
  • JJ uses an accountant to deal with his payroll and all reporting. The cost of the accountant is only £100 per month and frees JJ to concentrate on the main tasks of the business.

Mucky Pets

  • The equipment Alex uses is fairly low cost, the largest expense was the workshop in the garden which was purchased outright.
  • In the future Alex is considering going mobile and leasing a van for this purpose, this would be a good option.
  • Alex does not currently employ anyone but as the business grows then Alex is considering taking on an apprentice to train and support through the grooming qualifications.

Red Bush Brewery

  • At Red Bush Brewery, Sam is fairly reliant on the master brewer. The one full time employee. Whilst Sam is happy to learn the business and support the brewer, gaining the skills and experience to run the brewery alone is not feasible in the short term.
  • Sam is fortunate to have the farm buildings provided free of charge and bought the second hand equipment at a low price.
  • Because Sam has farm duties in addition to supporting the brewer, it makes sense to outsource the marketing and website for the brewery. A local admin firm is used and they also arrange for casual labour to cover farmer’s markets, if Sam is not available.
  • Sam uses the farm accountants to look after the payroll, getting a really good rate as part of the family farm.

Turn-it-round

  • Charlie uses Turn-it-round as a way of employing ex-prisoners. The turnover of staff is quite high, with staff typically staying with the business for between nine and twelve months, but this suits Charlie well. The staff are recruited on their release from prison and encouraged to develop skills and build relationships. Charlie sees it as a success when staff are head hunted by firms they work with.
  • Turn-it-round does not have significant assets and hires venues and vehicles as required.
  • The computers have been leased from a local IT company. The IT company maintains the computers and ensures the security is up to date. This was a requirement of the funding Charlie receives.

Activity 5

Timing: Allow about 10 minutes

Go back and review the table you produced in Activity 4 earlier.

Are there any items you would change, perhaps emphasise or remove in light of the case studies?

If so, what is it that has caused the change?

Comment

What we hope you got out of this activity is a sense that there is no one right approach. The decisions on how you approach and resource your business will depend on your circumstances.

You will need to look at your skills, situation, objectives, resources, finances and ambitions before making a decision.

5 Running the business: some choices

6 Your business