BLAKE LOCK AND SECURITY SYSTEMS Paul Btake was sitting back in his chair in hiss home office trying to anderstand why the new venture had not made him the rich man he thought he would be. Blake Lock and Security Systems (BLSS) had been establisher about two years ago and offered locksmithing services to residential and commercial customers, as well as automobile owners in the greater Halifax area. These services included lock rekeying lock and deafloclt installation window security locks. In addition, BLSS was certified by the province to perform alarm installation and offered a full range of alarm products. Financial results have been relatively poot, with loses of 56500 in the first year and a profit ef only about $24,827 in year 2 . Currently, demographics (see Table 1 ). BACKGROUND Paul Btake is the only child of parents who were both successful entrepreneurs. His purents are now deceased. and Blake received a substantial inheritance that would satisfy any of his financial needs for the rest of his life. He was not After graduation, his father had helped him get a job with a friend who owned a security and alarm manufacturing business in the western part of the province. Paul worked in various areas of the business, learning a great deal about alarms and locks. After two years there, Paul decided that he would prefer to be lis own bess and, using some of his inheritance, entered a special program to learn more about the locksmith tasiness. His ence and education, this market offered tremendous opportunities. Increased crime and residential house sales that often required new locks offered many chances to succeed in this business. Paul did not want to offer alarm installations as part of his new venture, because he felt that they were bothersome to install. He also knew that there were many large competitors already in the alarm market that would be able to offer products and service at much lower prices. INDUSTRY STRUCTURE/COMPETITION The locksmith industry was dominated by small operators, the majority of which consisted of an owner and fewer than five employees. Only five firms had five or more employers. These businesses were often operated out of the home with no storefront and concentrated mainly on the residential market. There were also a large number of construction/contracting businesses that, while not apecializing in locksmithing did offer the same service. The Halifax area had roughly 20 locksmiths. In the three communities on which BLSS concentrated, there were 10 other locksmiths. PRESENT STRATEGY Excluding alarms, Paul offered just about every locksmith service. His compuny van was used to store these products and any necessary tools for servicing his dients. This company van was 10 years old with a few minor dents, but it ran quite well. Paul had a cellular phone to respond to customer requests. After 5p.m, however, Paul turned off the system and didn't take calls. Because he relied on his cell phone to keep in tooch with clients during his operating hours, he was able to respond to all requests fairly quickly even if he was not in the office. He had tried using an answering service, but it did not allow him to respond to customers quickly enough, especially if he was at a job that kept him out of the office for a number of hours. He also knew that many job requests were emergencies and required a quick response. During the past year, Paul had decided to advertise on Kijiji, and he still maintains a small Yellaw Pages ad. The Kififi ad seemed to help business and contributed to the $4000 profit (see Tables 2 and 3 for billing and expenses). Paul spent a lot of his time in the office thinking of ways to increase his business, yet to this point nothing had been very successful. His understanding was that many of his competitors used a variety of low-cost marketing efforts, including social media, Kipin, and word of mouth. His Kijpi ad identified the three communitfies, the services he offered, and a telephone number. In addition, he included that he was bonded and insured and a member of the Canadian Association of Professional Locksmiths. Competitues typically stressed products and services, 24-hour emergency service, follow-up guarantee service, being bonded and insured, and membership in the locksmith association. Time was running out for Paut, and he was trying to think of other businesses that he could start up. He would often question his decision to enter the locksmith business, but then he would quickly decide that since he did not really need the money, it was no big deal. However, at some point he felt he should try to establish himself so he could settle down to a more routine life. Discussion Question 1. Paul Blake has asked you to be his mentor as he has decided to overhaul his business practices. What first steps would you advise Paul to take? Why