BLAKE LOCK AND SECURITY SYSTEMSPaul Blake was sitting back in his chair in his homedomestic automobile lockouts, and window securityoffice trying to understand why the new venture hadlocks. In addition, BLSS was certified by the provincenot made him the rich man he thought he would be$.$to perform alarm installation and offered a full rangeBlake Lock and Security Systems $($BLSS$)$ had beenof alarm products.established about two years ago and offered lock$-$Financial results have been relatively poor,smithing services to residential and commercial cus$-$with losses of $$6,500$ in the first year and a profittomers, as well as automobile owners in the greaterof only about $$24,827$ in year $2.$ Currently,Halifax area. These services included lock rekeying,BLSS$\text{'}$s target market is three local communitieslock and deadbolt installation and repair, master key in the Halifax area with similar demographics systems, emergency residential lockouts, foreign and $($see Table $1).$TABLE $1$Demographic Profile of Present MarketDEMOGRAPHICSDARTMOUTHBEDFORDSACKVILLETotal population$65,74116,10255,765$Total number of households$28,0606,03518,745$Total number of families$18,8604,62516,655$Number of married$-$couple families$12,1953,68512,965$Number of female householder families$3,7604951,815$Average household income$$41,107$$$73,804$$$60,365$EducationPercent high school educated$87\mathrm{.}090\mathrm{.}587\mathrm{.}3$Percent college or higher educated$38\mathrm{.}042\mathrm{.}339\mathrm{.}9$Labour forcePercent total population employed$59\mathrm{.}965\mathrm{.}968\mathrm{.}3$Percent female population employed$54\mathrm{.}759\mathrm{.}863\mathrm{.}2$Total number of housing units$28,0606,03518,745$Median number of rooms$5\mathrm{.}97\mathrm{.}96\mathrm{.}4$Total number of owner$-$occupied housing units$14,7904,39016,180$Total number of renter$-$occupied housing units$13,2751,6452,565$BACKGROUNDBlake is the only child of parents who were both successful entrepreneurs. His parents are now de$-$ceased, and Blake received a substantial inheritance that would satisfy any of his financial needs for the rest of his life. He was not a great student but always seemed to get by$.$ His summers were usually spent at college taking summer courses.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 busi$-$ness, learning a great deal about alarms and locks.After two years there, Blake decided that he would prefer to be his own boss and, using some of his inheritance, entered a special program to learn more about the locksmith business. His plan was to complete the program then start his own lock and security business. He felt that with his experience 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.Blake 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$/$ COMPETITIONThe locksmith industry was dominated by small oper$-$ators, the majority of which consisted of an owner and fewer than five employees. Only five firms had five or more employees.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 specializing 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 STRATEGYExcluding alarms, Blake offered just about every locksmith service. His company van was used to store these products and any necessary tools for servicing his clients. This company van was $10$ years old with a few minor dents, but it ran quite well.Blake had a mobile phone to respond to customer requests. After $5$ P$.$M$.,$ however, he turned off the system and didn't take calls. Because he relied on his mobile phone to keep in touch 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, Blake had decided to advertise on Kijiji, and he still maintains a small Yellow Pages ad$.$ The Kijiji ad seemed to help business and contributed to the $$4,000$ profit $($see Tables $2$ and $3$ for billing and expenses$).$TABLE $2$BLSS Monthly Billings for Year TwoJanuary February March April May June July August September October November DecemberTotal$ $3,2004,2604,7775,7486,9227,4148,5954,6523,2643,6023,0872,905$$$58,426$TABLE $3$Year Two ExpensesBusiness expensesSelling expensesMemberships $($chambers of commerce and Canadian Association of ProfessionalLocksmiths$)$TelephoneOffice expenses $($materials$/$supplies$)$Kijiji & Yellow Pages adsOther promotional expensesTotal expenses$$19,4542,4903,6201,7754,2002,600$$$34,139$Blake spent a lot of his time in the office thinking of ways to increase his business, yet to this point nothing had been very successful. His understanding was that many of his competitors used a variety of low$-$cost marketing efforts, including social media, Kijiji, and word of mouth. His Kijiji ad identified the three communities, 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.Competitors 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 Blake, 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 QuestionBlake has asked you to be his mentor as he has decided to overhaul his business practi$-$ces. What first steps would you advise him to take? Why?