spreading happiness warm fuzz cards

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Case Objectives:

To an example of an entrepreneurial start-up and an understanding of:

I. The decision of how fast to grow.

2. The decision of how much and where to invest in a growing business.

3. How management skills, knowledge and preferences can impact decision-making

in entrepreneurial/family business ventures.

4. How important cash management is in the early stage of growth.

5. How various stages in the development of a new venture will dictate the need for detailed

financial tracking and management of a business.

QUESTIONS:

Question 1: (1250 words)

  • Discuss the primary issue that Mills is facing and explain the related issues by explaining how management preference has influenced Mills’ choices.
  • Critically evaluate Mills’ strategy stating both strengths and weaknesses.

Note: Evidences of contextualization, connectivity, and understanding are very important, moreover, candidates should be aware that critical thinking is a big part of marking the answer.

Guidance to Question 1: You should raise several arguments such as: Mills has been financing her company by “bootstrapping,” funding the business using cash generated from sales. They should be aware that a decision has implications for the timing, amount and application of investment funds (slow growth versus faster growth). Moreover, Mills has a number of personal preferences that have influenced her choices: She has a strong personal focus on positive cash flow and low overhead, she prefers to experiment and learn. She is new to operating a business, and so prefers a slower growth, “safer” environment etc ….

Question 2: (1250 words)

  • Explain whether Mills ought to pursue slower or faster growth and why.
  • If Mills were to select fast growth, where should she invest to achieve this growth and how much? Elaborate how she should finance this investment.

(Provide the implications of her choice).

Note: Evidences of contextualization, connectivity, and understanding are very important, moreover, candidates should be aware that critical thinking is a big part of marking the answer.

Guidance to Question 2: You should examine explain, and contribute a thoughtful reflection on strengths by explaining cash flow management strategies mean that Mills is able to self-finance her business, and does not have significant interest costs. She has been cash flow positive and profitable since her first year in business by managing her expenses closely and ensuring that her accounts receivable is paid promptly. Taking into consideration mills’ inventory. It also means that Mills does not have a large inventory, which reduces her risk and lowers her investment requirements etc … thus as for the weaknesses; you may discuss that there is no significant internal cash available to self-finance growth. Perhaps very small asset base means/has limited management experience, especially limited financial management experience. Furthermore, they should show an understanding if there is a Slow Growth or Faster Growth (decision making). How she should invest I) make assumptions supported by outside sources to enable to make the decision.

*** Word count: 2500 words.

*** In-Text Citation and references using Harvard style

*** An attachments has been uploaded named “warm fuzz cards”.

***The assignment will be consider on:

• The degree of insight offered and the level of critical analysis applied (as compared

to description).

• The link to concepts presented in the course (the quality of the link is critical, not

the number of concepts used) and the use of well referenced external resources.

• Whether the recommendations are valuable, realistic, and well supported.

 
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