///Entrepreneurs in Action!
Developing the
Entrepreneurial Spirit
Learning in Action!
A Cross-disciplinary Problem-Based Learning
Environment for Entrepreneurship
University Cases
Changing Generations: An Entrepreneur takes
over the Family Business
(The Family Business)
Test Version 1.0
(A Work in Progress)
R. Wilburn Clouse, PhD
Vanderbilt University
Terry Goodin, EdD
Vanderbilt University
2
TABLE OF CONTENTS
INTRODUCTION ............................................................................................................. 3
LEARNING VIGNETTE -- CHANGING GENERATIONS: AN ENTREPRENEUR TAKES
OVER THE FAMILY BUSINESS ..................................................................................... 3
GUIDING QUESTIONS ................................................................................................... 4
PRODUCTS .................................................................................................................... 5
Changing Generations: An Entrepreneur
takes over the Family Business
(The Family Business)
Introduction
Michael Bates was a young, creative, talented college graduate who was ready to conquer
the music world. He had double majored in business and music. This somewhat odd
mixture of classes was the result of his early passion to be involved in the local opera,
while his parents had insisted that he should get a degree that would be useful in the "real
world" and one which he could use to take over the family business.
Learning Vignette -- Changing Generations: An Entrepreneur
takes over the Family Business
The business was a country-style restaurant that had been in the family for two
generations. The community had grown into a small city with this restaurant in a very
prime retail space. Through good planning and sound business decisions the family had
been able to acquire several acres of this prime retail property adjacent to their restaurant.
The family had also recently bought a small shopping center that joined the property on
which the restaurant was located.
This business, which had been started by his grandfather, had become an icon in the
community. Many of the older couples had their first date at this restaurant. Some of the
younger people would come to the restaurant to appreciate the nostalgia, while
newcomers found the restaurant and its legacy through word-of-mouth when they moved
to town. The restaurant had also become somewhat of a tourist stop as it was on the main
highway and tour groups stopped by to see a little bit of yesteryear.
The restaurant, which had been the primary source of income for the family, was going
through a time of great change. The grandfather had passed away several years
previously and Michael’s father, who had been the only one to work in the family
business, was ready to retire and pass the business on to his son. Michael had two sisters,
who chose to not be involved with the family business but who had been receiving a
quarterly check from the profits of the restaurant. They had not been involved with the
management nor operations of the business for quite some time, although they still had
family ties and a sentimental attachment to the restaurant.
Michael had gone away to the major university in the state and had many opportunities to
be involved with plays, musical performances and even with writing his own music. He
had excelled not only in music, but also in his business classes. He had taken a leading
role in the Free Enterprise program at the university as well as being an active member of
the Collegiate Entrepreneurs Organization. He felt a great loyalty to his parents, but also
had a burning desire to become an accomplished musician.
Upon returning from college, Michael worked with his father during the day and pursued
his interest in music after work by playing in a local band and teaching piano lessons.
After Michael had worked for six months in the restaurant, his father told him of his
plans to retire within the next year and pass the business to Michael. This would be a
challenging and learning year for Michael, as he would be faced with many difficult
decisions regarding his personal and business life.
After the retirement of his father, Michael took over running the family business and had
plans to implement new ideas in the business. He was also approached by several
investors who wanted to purchase the restaurant with hopes of selling the property to a
real estate development firm. Family members were taking a new interest in the business,
as they felt they were about to lose out on the riches of its being sold to a major
development company. Michael could possibly have the opportunity to follow his career
dream and become an accomplished musician. There were numerous factors to consider
and options to weigh, as Michael needed to make a decision as to his future.
Michael decided to research and think through his decision because he wanted to do the
right thing for all those involved. There were some options that might not only enhance
the current business, but could also help Michael realize some of his personal goals. He
searched the Internet and was able to find several sites that had information about
expanding an existing business. These sites had information on how one might obtain
financing for various projects related to the expansion of an existing business. He
discovered one site that is maintained by the federal government is the Small Business
Administration. The site can be found at http://www.sba.gov. The information contained
in this site would be a great starting point for individuals wanting to know about
financing or expanding an existing business.
Selling the business is an option that Michael could consider as he plans for the future.
Although selling the business would get him out of the operations of the company and he
could pursue his musical interests, there could be some possible conflict with the other
family members who have been receiving income from the business. This conflict within
the family could lead to a great deal of bad feeling within the family, an outcome that
Michael wishes to avoid.
There has also been talk around town about a group of local people wanting to take over
operating the restaurant and giving Michael an opportunity to pursue his musical career.
These individuals are looking at ways to keep some of the "small town" feel to a rapidly
changing community.
Guiding Questions
1. What are the major issues facing Michael?
2. What options does Michael have?
3. What type of information does Michael need to make decisions?
4. What legal rights will the two sisters have in this case?
5. How can Michael align both his personal goals and responsibilities to his
family?
Products
Develop a plan for Michael.
This case maybe used to begin the process of developing the Entrepreneurship spirit at
the College Level. This case can be used as the framework for other similar situations.