Business Ownership: How Sweet It Can Be!
Have you ever thought about starting your own business? It is an idea worth
considering, for several reasons. People who start up a business gain the opportunity
to work at something that they really love, the power to control their work life, the
ability to build something new, and the potential to earn a lot of money.
Activity 1: Three Types of Business Organization
There are many different goods and services that a new business can offer, but there
are only only a few ways to organize a business. An entrepreneur is a person who
starts up a new business, taking on risk and hoping to make a profit. The vast
majority of businesses start out as sole proprietorships or partnerships. A third
option is to set up a corporation. In the United States, about 70 percent of all
businesses are sole proprietorships, 20 percent are corporations and the remaining
10 percent are partnerships. Each type of business has distinctive characteristics.
A sole proprietorship a business that is owned and managed by one individual who
receives all the profits and bears all losses.
A partnership a business that is owned and managed by two or more individuals who
receive all profits and bear all losses.
A corporation is a business that is owned by stockholders and that has legal rights
and responsibilities as if it were a person.
Activity 2: Sweet Opportunities
Imagine you operate a consulting business, giving advice to people who are thinking
about starting or expanding their own business. Read the client stories in the
handout, Sweet Opportunities, then prepare a written recommendation as to which
form of business organization you think is best for each. State the reasons for your
recommendations. In each case, there will be some disadvantages to the business
form you recommend. Identify at least one negative for each and suggest how the
client you might minimize its effects.
As you prepare your recommendation, keep in mind that starting a business involves
more than just finding something to sell. The entrepreneur may need money may be
needed for buildings, equipment and other start-up expenses. He or she must also
know how to manage the business, or find someone else to work as a manager.
Activity 3: Sweet Success
You have probably noticed that all of your clients had opportunities in the “sweets”
industry. In fact, all of these are true stories that ultimately led to very successful
business ventures for people selling chocolate and chocolate-related products. Their
success was sweeter than most! Did you recognize any of these entrepreneurs and
their businesses?
Client 1: Elise McMillan and her brother Evan co founded The Chocolate Farm in
Englewood, Colorado, in the late 1990s
Client 2: Milton Hershey broke ground for his chocolate factory near Lancaster, PA in
1903. It was the beginning of what would become Hershey Foods Corporation. (Video)
Client 3: Forrest Mars, Sr. invited Bruce Murrie, an investment banker and son of
the Hershey company president, to be his partner in M&M Ltd. The M&Ms we still eat
today were first sold to the public in 1941. The letters in "M&M" stand for Mars &
Murrie. Eventually, Murrie left the business but Forest Mars became the owner of
Mars, Inc.
Client 4: Wally Amos launched the Famous Amos Cookie Company in a Hollywood, CA
storefront on Sunset Boulevard in 1975.
Read about one of these persons and the business he or she created. Then report
your findings about what happened to the entrepreneur and the business. Be sure to
include answers to the following questions.
1.What has happened to the founder of the business?
2.Is he or she still involved with the company?
3.What other things has he or she done?
4.Who owns the business?
5.How has the business changed?
6.Has the company been involved in any mergers or acquisitions?
7.What products does the company sell?
Conclusion:
Starting any business is risky. According to one report, two out of three new
businesses fail within their first four years. You can reduce the risk – and increase
your chance of sweet success—by choosing the form of business ownership that best
suits your new business and personal interests. You will have to consider the
following:
• The resources needed to start and expand the business.
• Your level of expertise for starting and managing a business.
• Your willingness to share decisions and profits.
• The level of liability you and any potential partners are willing to accept.
• The tax implications of your choices.
• Your willingness to re-invest earnings into the business.
• How long you see yourself and any partners involved in the venture.
• Whether this venture is something you want to live on after you and any
partners are gone.
February 07, 2001 edition
The Christian Science Monitor
Siblings taste success, and how sweet it is
Ross Atkin
Like many youngsters, Elise Macmillan loves playing around in the kitchen. In her case,
though, these culinary experiments haven't led to just messy pots and pans, but to profits.
Elise, 12, is co-founder with her brother, Evan, 15, of the Chocolate Farm, a successful
gourmet business in Denver that sells her chocolate creations to a growing clientele.
The business has outgrown the family kitchen and now operates out of the Denver
Enterprise Center, a small-business incubator, where the siblings share a commercial
kitchen with other companies. The R&D work, however, is still handled by Elise in the
Macmillan home, about a 20-minute drive away.
"At the Enterprise Center, where you pay by the hour to use the kitchen, we concentrate on
making our products," says Elise during an early-morning phone conversation, conducted
before leaving for middle school. "At home, when I have as much time as I want, I can
experiment with things. I get ideas from friends and family, and then I change them a little
bit."
Elise's kitchen adventures began at age 3, when her Canadian grandmother showed her
how to make Rice Krispie Treats. Thereafter, says her mother, Kathleen Macmillan, Elise
was forever creating confections from chocolate chips.
"I'd open the refrigerator and find chocolate melted on celery with peanut butter and all kinds
of funny things," Mrs. Macmillan says.
These sessions, including an occasional microwave explosion, didn't go unnoticed by Evan,
who several years ago was selected to serve on the advisory board of the Young Americans
Bank, which is for those 21 and under.
The bank promotes financial education and entrepreneurship and holds an annual Holiday
Marketplace, so Evan encouraged Elise to participate. She concocted something called a
Pig in Mud, which is a marshmallow dipped in melted caramel and pecans, then dipped in
chocolate. She also sold molded chocolate cows on a stick and "Farm Eggs," jelly beans
dipped in chocolate.
The themed-base candies, inspired by the farming backgrounds of Evan and Elise's
grandmothers, were a hit and sold out quickly.
After that the Macmillans' Chocolate Farm began filling orders from family and friends, but its
reputation for fun, well-made products was soon to reach a wider audience, helped by a
presence on the Internet and selection for the Ernst and Young Entrepreneur of the Year
Award winner in 1999.
Elise has a knack for product development and packaging, and Evan is the "business guy"
and computer master.
He knew the Internet's potential from designing a website about author John Steinbeck for a
school project. E-mails poured in, making it one of the most visited Steinbeck sites on the
web. "It was amazing," says Evan. "I've taken down the site because it was taking a lot of
time to answer all the questions people sent it."
For the Chocolate Farm, he's developed an inviting website (www.chocolatefarm.com) that
reflects a grasp of e-commerce.
Mrs. Macmillan and her husband stay in the background. They support the business while
making sure Evan and Elise run it as much as possible. "It's their business, and we want
them to learn," she says. "But like any parents, we want to prevent huge mistakes, the pain of
which will be more than the lesson."
David Gonzales, director of the Denver Enterprise Center, says young people have more
entrepreneurial potential than many realize, but the key to its proper development is parents.
Speaking of the role Elise and Evan's mother plays, Dr. Gonzales says, "She's kept
everything in perspective for them. "These kids don't have a big head about the business,
which could tend to happen. They've had a lot of publicity, but the kids are really grounded."
Gonzales says he was impressed with their demeanor and the way they carried themselves
from the moment they applied for space in the Enterprise Center. The Chocolate Farm is
viewed as a pilot project that could lead to a youth-business incubator.
The center provides a sense of community to budding entrepreneurs, and the Macmillan
children have fit right in. "The other people in the kitchen really like them," says Gonzales,
who adds they have a good relationship with low-income people from the neighborhood
hired by the Chocolate Farm and other companies. The Chocolate Farm generates more
orders than the Macmillans can handle alone, so about a dozen part-time workers help, in
addition to friends, who also get paid.
Gonzales says that having the Chocolate Farm in the center, where tenants generally stay
three years, has been an inspiration to other entrepreneurs. He notes: "People are watching
and saying, 'My gosh, look at how they're doing all this stuff. We better get with it.' "
Elise is the one who usually has her friends come and work in the kitchen. Evan
concentrates on office tasks. He orders chocolate by the ton, writes checks for rent and work
performed, and keeps tabs on what's selling, among other duties.
Their most popular item is a sampler called the Chocolate Farm Classic, which sells for $20
(including shipping). It comes with two chocolate cows on a stick, two Pigs in Mud, eight
Chocolate Paws (with pecans and caramel), six Chocolate Clouds (dipped marshmallows),
and Lemon Sheep Munch (a white chocolate and lemon chips mixture shaped like a sheep).
Business picks up around Christmas and Valentine's Day, and filling orders could be
overwhelming, with thousands visiting the company website daily, except the family works
together to keep the business from burdening the children.
"There's a lot of teamwork," says Elise. "We get together in little meetings and discuss
everything."
The children know schoolwork takes priority over business. And while they think of the
business often, they stay busy with other pursuits, too. Evan, a freshman at Cherry Creek
High School, is on the school tennis team and plays year round, and Elise, a seventhgrader, plays the violin, takes jazz dance classes, and is on her school's track team.
Elise doesn't keep tabs on how much time she devotes to the business, but mostly goes in
on weekends, sometimes spending five or six hours.
The family insists on quality in every aspect of the business, says Gonzales, who points to
the work they've done to attractively decorate a 2,500 square-foot office space in the
Enterprise Center and to the Chocolate Farm's newly published cookbook, a visual delight.
When the new office opens, the plan is to invite school classes in for field trips so that they
can learn about starting a business, and maybe try their hand at making a chocolate cow or
two.
A business can be a wonderful family activity, Gonzales says, because "it gives you an
opportunity to focus on something that involves the whole family, which is great. There are
very few activities that do that."
Entrepreneurism and Growth
Moneyhaven.com
Forrest Mars, Sr., the reclusive billionaire patriarch of the global candy and pet-food
empire that bears his name, died July 2, 1999, in Miami, Florida. In her book The
Emperors of Chocolate: Inside The Secret World of Hershey and Mars, author Joel Glenn
Brenner describes him as a brilliant and fascinating entrepreneur. In many ways, Forrest
Mars, Sr., was one of the century's first modern businessmen.
Mars Incorporated is one of the largest candy and pet-food companies in the world. The
three descendents of Forrest Mars, Sr., who now own and run the company, are all
billionaires. However, here the similarity to most other family-business success stories ends.
Mars, Inc., author Joel Brenner says, is managed like no other American company.
"This was all started by Forrest Mars, Sr. And he was a true entrepreneur in America. Just
as brilliant as any of those men that we have heard all about -- Henry Ford and the others.
But we do not know anything about Forrest Mars, Sr., because he was so close-mouthed.
He never gave interviews. Nobody knew anything about what was going on behind the
doors of his candy factories..."
Ms. Brenner is one of the only two people she is aware of to interview anyone in the Mars
family and be allowed inside this admittedly secretive company.
"This is a $20-billion company. And yet, you walk into the headquarters in McLean,
Virginia, and you do not see but a handful of people working there. You do not see any
private offices. You do not see any secretaries. And you see the Mars family (the owners)
with desks in the back corner -- desks that look like the kind of desk a school teacher
might use. And they share a secretary among the three of them. I mean, you do not see
another global conglomerate that operates this way. It is really a fascinating way to run a
business."
Though Forrest Mars, Sr., was an autocrat, he structured his company in a very
democrattic way, introducing practices in the 1930s that are still considered innovative
today, Joel Brenner says.
"Mars is really the most egalitarian company I have ever come across. Everybody punches
a time clock, including the Mars family. Everybody gets a 10 percent bonus for arriving
on time. Nobody gets preferential treatment. Everybody knows everybody else's salaries.
And you know what you have to do to make it to the next level. And your salary is
pegged to perfornance. If your unit does well, you are going to get a bonus. And if your
unit does poorly, your paycheck is going to shrink."
Long before most modern-management concepts ever surfaced, Forrest Mars, Sr., created
a completely new and extremely efficient work environment for his employees, Ms.
Brenner says.
"Mars has no bureaucracy. Forrest Mars set it up that way... There are no meetings.
Everybody addresses everybody else by first name. The reason there are no private offices
is to encourage communication among the associates. If you have a problem with your
boss, you get up, you walk across the room and you talk to him about it. And there are no
memos of any kind. They do not like to waste time on elaborate presentations. This is a
real sort of nuts-and-bolts (practical) business practice within Mars that you just do not see
anywhere else."
Frank Mars, Forrest Senior's father, founded the company in 1911. Forrest's two sons and
daughter are now the third generation to own and run what is now a worldwide candy
and pet-food empire. In terms of sales, Mars usually ranks first or second in the global
candy business. The Swiss-based Nestle Company is its only close rival.
Copyright © 1999 by The Entrepreneur's Library
Wally Amos
Famous Amos Gourmet Cookie Creator
“The face that launched a thousand chips,” Wally Amos is the father of the gourmet cookie
industry. As inventor of “Famous Amos” cookies, his story is the quintessential American
success story.
The “Famous Amos” cookie tale began when the talent agent began using his bite-sized
cookies as calling cards. At the urging of his friends and clients, he launched the Famous
Amos Cookie Company in 1975 with a Sunset Boulevard storefront in Hollywood. The
business grew and in 1985, Famous Amos cookies were a $10 million business. Great
products are not built on great taste alone, and Famous Amos’ success is as much due to
Wally’s infectious enthusiasm and tireless promoting as it is to the cookies’ delicious taste.
While he left the brand after it changed hands several times between 1985 and 1998, he
never lost his entrepreneurial zeal or passion for baking and promoting. His most recent
ventures now are a Long Island-based Uncle Wally’s Company, which specialized in a full
line of muffins, and the Orlando-based Aunt Della's Cookies, named for the woman who
taught him, as a youngster, the art and love of making cookies.
Before his cookie foray, Wally spent a stint in the Air Force (where he earned his GED), and
at Sak’s in New York. He then joined the William Morris Talent Agency and worked his way
up to become the firm’s first black agent. While at William Morris, Wally represented The
Supremes and Marvin Gaye, and he is credited for signing a then-unknown duo named
Simon & Garfunkel.
Wally has appeared on hundreds of television and radio shows, appeared in various
network sitcoms and acted as spokesman for Hush Puppies, United Airlines and the
California Egg Board. He is host and teacher of 50 adult basic learning programs on PBS,
and has authored four books, his most recent being "The Cookie Never Curmbles,
Inspirational Recipes for Everyday Living."
In addition to his business, Wally devotes a great deal of time and passion for literacy
causes, serving as national spokesman for the Literacy Volunteers of America and acting as
a board member for the National Center for Family Literacy and Communities in Schools.
Wally Amos, 67, has been married for 27 years to his wife, Christine. They reside in Hawaii.