Belle Fleur: Buying an Existing Business or Starting Fresh
(4 pages of text)
In April 2017, a college student in California was graduating with a degree in business administration with a concentration in entrepreneurship. She had been a florist for the past six years and wished to pursue her dream of starting her own flower business. Her vision was to open a flower shop where all the arrangements were uniquely designed for each customer and no two arrangements were the same. Her current employers were trying to sell their shop (Belle Fleur) and offered to sell it to her at a discount price. She had to decide whether to buy the business or start her own shop from scratch.
This case can be used in entrepreneurship courses at the undergraduate level to support topics related to buying an existing business, such as valuation, due diligence, and entrepreneurial intentions. The case is designed to highlight the challenges a person faces when deciding to become a small business owner, either through the purchase of a preexisting enterprise or the creation of a new one. As with most entrepreneurial journeys, there are no clear answers. Students must use a combination of conjecture and data analysis to make a decision in the case. After completing the case, students should be able to
- recognize the advantages and disadvantages of buying an existing business compared to starting from scratch;
- conduct a break-even analysis; and
- use non-traditional valuation methods to determine the purchase price of a small business when the information available is limited.
United States, Small, 2017
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