PatriotsLawn Mowing Company
Limitationof the research………………………………………………………………………..6
Significanceof the Study…………………………………………………………………………7
Identification& Discussion of Issues…………………………………………………………….9
Questionsto be Answered……………………………………………………………………….10
Information& Literature Review Section………………………………………………………12
Alocal lawn Mowing Company in Dayton Ohio has to make a choice ofwhether to maintain its status quo or expand its business operations. is a new entrant in the area and thecompany is suffering from loss of revenue due to a lack of adequateresources to run its business. In fact, the company has turned downsome orders as it only has two employees and only one truck. Thebusiness is contemplating an expansion and has therefore collecteddata from its own customers in order to find out their perceptionabout their two year old company. The owners of the Patriots LawnMowing Company have their work cut out as they need to make adecision on whether to expand or not expand its operation or risklosing their source of livelihood. Upon an analysis of the survey andinterviews it is apparent that an expansion strategy by the companyshould be put in place since this is the only way the company cansurvive in the competitive lawn mowing business.
PatriotLawn Mowing Company is a small private company that was establishedtwo years ago. The company is registered in Ohio and its head officesare in Dayton, Ohio. The company is considering whether to expand itsoperations by increasing its number of routes, buying more equipmentand other assets and also increase its workforce. The companycurrently operates in one route, has two employees and only has onetruck. The research paper seeks to answer the question whether thecompany has enough resources and whether the investment made and therisk taken by the management to expand the company will pay off inthe long run. The current economic environment in the country lookspromising and there might be some light at the end of the tunnel forPatriot Lawn Mowing Company. In order to establish if the time isright for expansion, the author examined the business environment inwhich the company operates. The analysis revealed that Patriot LawnMowing Company stands a good chance of making favorable returns if itexpands its operations.
Purposeof the Study
Thepurpose of this study is to establish whether Patriot Lawn MowingCompany stands a chance of making returns after expanding itsoperations. Patriot Lawn Mowing Company operates only one route inthe Dayton, Ohio area, has one truck and two employees. The proposedexpansion of the Lawn Mowing Company will see the company commit moreresources, hire more employees and purchase more equipment andassets. The central problem facing Patriot Lawn Mowing Company isthat the company lacks adequate resources to take on more orders asit is currently short staffed. The company only has two full timeemployees and one truck and such resources would render any such acompany in the lawn mowing business limited. At the moment, thecompany has had to turn down orders from new customers and this doesnot auger well for the management of the company especially giventhat the company was only formed a few years ago. The Dayton Ohioarea has over 50 accredited Lawn mowing companies[ CITATION BBB16 l 1033 ].Andas such Patriot Lawn Mowing Company faces an uphill task inestablishing a niche market for its clients. Some of the companieswhich operate in the Dayton Ohio area have been in operations forover 30 years and therefore Patriot Lawn Mowing Company has to getits business strategy together in order to survive in thiscompetitive industry.
Anobjective simply refers to the goal or aim of an organization [CITATION BPP152 p 8 l 1033 ].In order to come up with an effective strategy for Patriots LawnMowing Company, the management of the company needs to understandwhat goals the company is planning to achieve. PatriotLawn Mowing Company is a private company operating in the Dayton,Ohio area. One of the main objectives of the company at this point isto survive. The Lawn Mowing market is severely competitive and thecompany needs to stay afloat in order to stand a chance of expandingits services to other routes in Ohio. Currently, the company facesstiff competition from over 50 companies which operate in the areaand are a step ahead of since they havea solid customer base built over the years. In the study, the authorwill examine whether the current workforce and resources in PatriotsLawn Mowing Company will be adequate to sustain the company beforethe company expands its operations. At this point the author willlook into the company’s financial statements and work out someaccounting ratios in order to determine if the company can serviceits customers’ orders without asking for bank overdrafts. Thecompany will also seek to find out the customer’s perceptions onthe company before making the expansion move. According to Pareto’sprinciple, 80% of the company’s sales will be from 20% of thecompany’s returning customers[ CITATION Lav14 l 1033 ].Therefore, Patriots shouldembark on a customer’s survey in order in to establish the client’sperception about the company. shouldsend out questionnaires to their clients asking them to rate thecompany’s services in relation to their pricing, quality ofservices and response time. The objective behind conducting a surveyis the fact that it would be meaningless for the company to expandits services while a fraction of its customers are disgruntled withthe services offered by the company. The author will also look intothe possibility of finding new markets in the Dayton Ohio area thathave not been yet tapped in regard to lawn mowing. As mentionedearlier, the lawn moving business is very competitive in the area andthe company needs to offer its clients an array of services in orderto stand out. The case will therefore assist the company evaluate theneed of offering other services besides lawn mowing in order to stayin business all year round. The company could for instance offer somesnow shoveling services as well as offer some equipment for lease toits clients at a fee. Finally, the author will evaluate the prospectsof expanding the company should the company decide to expand itsoperations. In this instance, the company will focus on whether thecompany can finance its expansion and whether the expansion will payoff in the long-run. The author will delve into how much investment might require in making and executing asuccessful expansion program with the available resources.
Limitationsof the research
Asusual no research is perfect and this study will not be an exception.There are several limitations in the study and therefore the studymight have to make some assumptions on some issues in the study. Forinstance, most of the information collected in the study was acquiredfrom the Patriots Lawn Mowers Company customer database. Thequestionnaires sent by the company were mostly in the form of emailand some utilized the postal service. Therefore, there is thepossibility of some customers eluding to criticizing the company inareas it did not perform well due to the fear of negative feedback.In addition, some of the opinions expressed by the customer’s mightnot be genuine. is not an establishedcompany and the cost of research study might do more harm than goodin the short-term as the company struggles to stay afloat. Finally,the decision to expand the company’s operations was based onestimates acquired from the company’s financial statements andprojections. It is possible that the estimates might have beenflawed.
Significanceof the Study
Thestudy conducted in this research is imperative both to entrepreneursand the writers as a number of lessons can be learnt. The topic ofexpansion and business strategy always comes up in any businesssetting and therefore a sound understanding of how to execute anexpansion is vital to anyone seeking to venture in the world ofbusiness either as an entrepreneur or a business consultant. Thetopic is especially significant to the author because in the futurethe writer might run his own business in the future and therefore thesubject of expansion will be have to be addressed later on. It isimportant to realize that businesses which operate in developingcountries are always faced with cyclical cycles due to the economyand topics revolving around expansion and downsizing are not new. Thestudy is also important for small business such as Patriot LawnMowing Company given that small and medium-sized enterprise (SME’s)which have less than 500 employees are the backbone of the U.Seconomy. Small and medium-sized enterprises account for 99% of allfirms in the country [ CITATION Fir15 l 1033 ].Privatecompanies need to know what to look out for when contemplating anexpansion for their firms. The management of such companies would usethe study as a checkup guide before authorizing an expansion or evendownsizing their company. Finally, the topic of expansion has globalsignificance given the fact that the world has now shrunk into aglobal village and most likely expansion is imminent in most businessorganizations. A good understanding of the organization’scustomer’s expectations, business competitors, company’sresources and estimated returns comes in handy in deciding whether ornot to expand an organization’s operations.
PatriotsLawn Mowing Company was established in 2014 and the Company has beenin operation over the past two years. The company is a privatelimited company which is owned by some private investors who ownshares in the company. However, the company is run by a manager whois in charge of running the day to day operations of the company. Themanger has over 20 years experience in lawn mowing as he has workedas lawn mower service industry for several companies in Ohio. Themanager is an employee of the company and his main role is to takecustomers’ orders and make sure they are performed. However, he ison a salary and is paid at the end of the month. He is also thesupervisor of all the contracts besidesworking on the lawn. The other employee is paid on a weekly wage andis the company’s reliable worker. He works under the supervision ofthe manager and most of Patriots Lawn Mowing Contracts have beenperformed by the Company’s second employee since the manager mightbe required to attend to other businesses on behalf of the company.The Company only has one truck to perform its services. The truck hastwo sets of lawn mowers and other tools and equipment required forthe trade. In the last two years, hasoperated on only one route. This is because the company hasinadequate resources to expand its operations and therefore thecompany has maintained the one route since its inception. During theresearch period it has emerged that haslost revenues due to its inability to expand its operations. This isespecially evident during the summer when most contracts are open fortender and clients are seeking to trim their lawns because theweather is ideal for nurturing grass. It was discovered that PatriotsLawn Mowing Company turned down some lawn mowing services because itcould not service the orders. The Company is short staffed and relieson the services of one permanent employee and sometimes the servicesof the manager who is occasionally available. Some of thewell-established Lawn Mowing Companies in Dayton hire temporaryworkers during the summer for instance in order to maintain theirclientele during the high season. Therefore, Patriots Lawn MowingCompany needs to inject more capital into their business in order tomaintain and grow their customer database and hence reduce the riskof losing revenue to their rival firms.
Identification& Discussion of Issues
Inthis section, the author will identify key issues and discuss howthey relate to the problem. The central problem as mentioned earlierrevolves around the lack of resources to meet customers’ orders. Inthis context resource refers both to human and financial capital. Ithas been established in the research study that Patriots Lawn MowersCompany has suffered some loss of revenue due its inability toservice customer’s orders leaving expansion as the only viableoption for the company’s existence. At the moment, the company isfacing stiff competition from 50 other lawn moving companies whichoperate in the Dayton, Ohio area and failure to mitigate thesituation might render the company’s services uncompetitive.
Sinceits inception, Patriots Lawn Mowers Company has been unable to spreadits wings due to a shortage of man power and also limited capital.The Company was started with a $100,000 investment which was used topurchase a new truck and a rent the company’s premises at Dayton.Since then no further investment has been injected into the company.The company has a database of over 45 clients and unfortunately therevenue received from these clients can only service Patriot’srecurrent expenditure. This means that there is very little moneyleft over to plough back into the business.
Thecompany’s inability to save funds or invest more capital is leavesPatriot’s Lawn Mowing Company in a precarious position and risksbeing obsolete. This is because the Lawn mowing service industry isinfluenced by technology and new equipment and tools are introducedeach year. Patriot’s Lawn Mowing Company might lose its customerbase if it does not reinvest in new equipment and tools of trade.Therefore it is imperative that more financing is injected into thebusiness. The new investment will facilitate the purchase of modernequipment and thus keep Patriot’s Lawn Mower attractive in the eyesof its customers.
Questionsto be Answered
Thissection seeks to look into two questions that will help Patriot’sLawn Mower Company come up with a solution on how to address theissue of lack of resources to service customer demand. In thissection, the author will seek to find the answer to two questionsthat will help the Company solve its recurring problem.
IsMaintaining the Status-quo a viable option for the Company?
Accordingto the situation on hand, Patriots Lawn Mower’s Company has twooptions. The Company’s first option is to maintain the status-quowhich means that the company does not have to do anything andtherefore the company can only watch as it loses its customers to itscompetitors. Maintaining the status quo is an alternative to theCompany as it does not have any additional resources at the momentand no funds had been realized from savings. In addition, the companywould avoid the risk of expanding the business and suffering somelosses in the future [ CITATION BBC141 l 1033 ].Therefore,maintain the status quo is an option for the company.
IsExpansion a Viable option for the Company?
Expansionis the second option Patriots Lawn Mower has to ponder about. Giventhat the Company is unable to meet its customer’s order suggeststhat an expansion is imminent or face the risk of losing newcustomers and also returning customers. Expanding the Company meansthat the Company will have to inject more capital in the business inorder to enable the firm hire more workers, buy better equipment andtools and look for other alternative routes for the business. Whileexpansion is an option for the Company the most important part iswhether the investment in the expansion will make a good return forthe company. In other words, will the juice be worth the squeeze.
Theauthor utilized a number of methods to obtain and gather data used inthe research study. For instance, the author used questionnaires incollecting data from the company’s customer database when it soughtto establish the customer’s perception on Patriot’s Lawn MowerCompany’s services. The questionnaire collected both qualitativeand quantitative data about the company’s services. Thequestionnaires asked questions about the price of the servicesprovided, the quality of services offered and the response time takenby the employees to address any customer complains. In addition, theauthor conducted interviews from the company’s rival competitors inregards to how they manage and run their companies in order to make acomparison between Patriot’s Lawn Mower Company and itscompetitors. The questionnaires were prepared before the study wasconducted and were sent either via e-mail or postal service. Theinterviews on the other hand were conducted by the author personally.The interviews were conducted face to face as the interviewee had toanswer a number of questions asked by the author. A total of threeinterviews were conducted in the study from rival lawn mowingcompanies operating in Dayton, Ohio.
Information& Literature Review Section
Accordingto Payton, a contributor on Forbes, 96% of small businesses failbefore they reach their 10thyear [ CITATION Pat16 l 1033 ].Payton was making this revelation when she talked about her journeyafter running a successful business for 10 years. Payton encounteredsome challenges over the 10 years but shares some advice to smallbusiness owners. In her article, Lessons learned from 10 years ofRunning my small Business, Payton offers insights into four mainthings to pay attention to in order to run a successful smallbusiness company. Payton discourages entrepreneurs from doingeverything themselves. Paytondoes not encourage businesses starters to DIY (Do it yourself) sheregards this as one of the major downfalls of most business. Insteadshe suggests that businesses should consult with professionals. should strongly consider hiring aconsult to assist the company with its expansion plan. The consultshould offer business advice such as from choosing the company’slogos to how much capital should be invested in the company.Secondly, Payton realized that she needed to change her goals inorder to stay competitive. The business environment is dynamic andthings are always changing. Most business never keep-up with theircustomers’ needs and the changing business environment andeventually shutdown. Patriots Lawn Mowers Company should align theircompany goals with what their customers demand. This way there isgoal congruency between the company and its customers. Thirdly,Payton advocates for superior products as this is the only waycustomers will keep coming back for more products or services.Patriots should focus their attention on their craft more thananything else. This is the only way the company will gain acompetitive edge over its competitors and it would be a sure way ofretaining their customer base. Finally, most businesses forget tomarket themselves. She admits that her company almost went underduring the recession for failing to market the company properly. Dueto the nature of the service industry that Patriot Lawn Mowers is in,word of mouth would be the best marketing tool the business wouldutilize. This goes back to emphasizing that business that offersuperior services compared to their competitors have an edge againsttheir rivals.
Itis imperative to start a business expansion on the right footing.While it is true that an expansion might put a strain on a company’sresources it is also evident that most businesses have enjoyed somesuccess as a result of taking a leap of faith. However, two thingsshould always be at the back of the mind when contemplating anexpansion. Businesses need to dive deep or do due diligence as wellas develop a business plan and an effective strategy[ CITATION Day14 l 1033 ].Inother words, before a business embarks on an expansion journey theyneed to know their business environment very well. This meansconducting a SWOT analysis in order to determine how they fair amongtheir rivals in business. Secondly, upon making a decision onexpansion, Patriots Lawn Mowers Company should develop theirstrategy, that refers to short, medium up to long-term strategies. Inaddition, proper budgets should be developed by the company.
Accordingto Spaeder, author of 10 ways to grow your business, small businesseshave a wide array of options in which they can expand theiroperations [ CITATION Spa04 l 1033 ].Spaeder offers 10 ways on how a business can expand but I will onlygo over a few ways in which Patriots can apply.One of the ways suggested by Spaeder includes forming an alliance ora partnership with one of the local lawn mowing companies in Dayton,Ohio. The partnership could perhaps find ways of cutting costs bysharing equipment and routes and also sharing ideas in business.Patriots Lawn Mower Company could probably consider diversifyingtheir services or products. For instance, they could offer snowploughing services or even lease some equipment to households in thearea in an attempt to generate more revenue for the business. should also try and work with thegovernment under public procurement. The government is by far thelargest spender in the country and working with the government wouldbe a good and safe way of expanding its services since the governmentcannot default on its debts. Finally, Patriots Lawn Mowers Companyshould have an online presence. Bill Gates uttered in 2002 that inthe future there will be only two kinds of businesses, “those withan Internet presence and those with no business at all” [ CITATION Spa04 l 1033 ].Therefore, Patriots should take advantage of the internet and makeuse of social media platforms as it can only ignore the internet onits own peril.
Atthe end of the day, 26% of small and medium businesses are seekingways to expand their business by diversifying their products orservices. This is according to a survey conducted by forum of privatebusiness [ CITATION For13 l 1033 ].Sadler offer six tips for expanding business regardless of theeconomy and two of the six points can be implemented by Patriots LawnMower Company. Sadler suggest that business can add new products orservices and later on sell the services or products to alreadyexisting clients. In addition, he states that a thorough marketresearch needs to be conducted before anyresources are committed by a Company. Companies ought to know whatcustomers think about their services or products and also about theirpricing and cost of service before expanding their business [ CITATION Sad14 l 1033 ].
Basedon the data that was collected several analysis can be deduced fromthe data. As earlier mentioned, the research study utilized some datacollected from Patriots Lawn Mowers Company’s clients. In the studya number of questionnaires were sent out and some response wasgathered from 41 out of the 45 surveys expected. In addition, threeinterviews were conducted by the author himself in order to establishPatriots Lawn Mowers position in the market in relation to itscompetitors. According to the surveys a number of issues cropped up.It was apparent that the customers were overall satisfied withPatriots Lawn Mowers Company performance however there were somecomplaints about several aspects of the company. In regard to thecompany’s rate or charges over 80% of the customers felt that thecompany’s rates were fair and were reasonable compared to thosecharged by other lawn mowing companies. The customers also felt thatPatriots Lawn Mowers delivered quality services with 65% of thecompany’s client being satisfied with their services. However, mostof the customers felt that Patriots Lawn Mowers took too much time torespond to customer complaints and also to respond to customerqueries. Only 30% of the Company’s customers felt that the companyresponded to their complaints on time. The customer response time wasthe only area that the Company performed poorly and hence was theonly area that needed the company’s urgent attention. In regards tothe three interviews that were conducted by the author, severalissues came up. First, Patriot’s Lawn Mower Company was relativelynew in the industry. The average age of the three companies in lawnmowing was seven. The three companies also had more resources whencompared to . In this case, resourcesrefer to both human and financial capital. The largest of the threelawn mowing companies had made an investment of $200,000 and had atleast six permanent employees while the smallest company started offwith a $120,000 initial investment and had four permanent employeesnot to mention the temporary employees. It was also established thatthe three companies operated more than one route and had more thanone truck.
Basedon the data that was collected from the study it emerged thatPatriots Lawn Mower Company is short staffed as it had the smallestlabor workforce. In addition, it was the smallest and mostinexperienced company in the Daytona, Ohio area at least according tothe survey. However, all hope is not lost as the customer’s surveysshowed that the customers were pretty satisfied with the company’sperformance but there is still room for improvement.
Goingback to the questions to be answered section of the paper, theresearch study revealed that two questions needed to be addressed. had two options to either maintain thestatus quo or expand the company. Maintaining the status quo wouldmean that the Company does not work towards expansion but works withthe available resources to improve several aspects of the company’sperformance. For instance, would work onimproving the customer response time. However, this would mean thatthe company would have to invest some money into the business if thecustomer response time would be addressed. Therefore, this wouldautomatically defeat the purpose of ofmaintaining the status quo. The second option would be to expand thecompany’s operations. This alternative seems viable for the companybecause based on the study it would be impossible for Patriots LawnMowing Company to compete with the rest of the companies if itchooses not to expand. Patriots Lawn Mower Company risks losing itscustomer base in the near future if it does not expand. This isbecause Patriots Lawn Mowers has the least investments in bothfinancial and human capital hence this would make the companyuncompetitive in the future. At the moment, Patriots Lawn MowingCompany could not service some orders and a repeat of such caseswould translate to lost revenues and disgruntled customers whichwould be a poor leading indicator for the business.
Throughoutthe research it has been established that Patriots Lawn MowersCompany has underperformed due to a lack of both human and financialresources. The study established that there are several ways ofexpanding a small and medium business but due diligence and a solidbusiness strategy are crucial to the success of the company. Mostbusinesses never celebrate their 10thyear anniversary because they do not seek professional assistance anddo not pay attention to customer’s needs. Patriots Lawn MowingCompany needs to expand its operations if it wishes to compete withits rivals in the market. The company is short staffed, cannot keepup with customers’ orders and has only one truck and operates asingle route. It is only a matter of time before Patriots Lawn Mowersshuts down its operations. Expansion is the only viable option if thecompany wishes to continue its business operations in the Daytonaarea in Ohio. Therefore, Patriots Lawn Mowers Company should act fastand expand its operations.
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