Discussion 4: Blake Lock & Security (3%) 1. Read the case: Blake Lock and Security Systemy located below this discussion link) 2. Answer the question at the end of the case: "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" 3. Respond to at least one post by one of your classmates Better (Official Video) - YouTube BLAKE LOCK AND SECURITY SYSTEMS Paul Blake was sitting back in his chair in his home office trying to understand why the new venture had not made him the rich man he thought he would be. Blake Lock and Security Systems (BLSS) had been established about two years ago and offered locksmithing services to residential and commercial customers, as well as auto- mobile owners in the greater Halifax area. These services included lock rekeying, lock and deadbolt installation and repair, master key systems, emergency residential lockouts, foreign and domestic automobile lockouts, and 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 poor, with losses of S6500 in the first year and a profit of only about $24,827 in year 2. Currently, BLSS' target market is three local communities in the Halifax area with similar demographics (see Table 1). BACKGROUND Paul Blake is the only child of parents who were both successful entrepreneurs. His parents 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 a great student but always seemed to get by. His summers were usually spent at college taking sum- mer courses After graduation, his father had helped him get a job with a friend who owned a security and alarm manu- facturing 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 his own boss and, using some of his inheritance, itered 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 experi- 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. TABLE 1 Demographic Profile of Present Market BEDFORD 16.102 6,035 DARTMOUTH 65,741 28,060 18,860 12,195 3.760 $41,107 4,625 3,685 495 $73,804 SACKVILLE 55.765 18,745 16.655 12.965 1,815 $60,365 DEMOGRAPHICS Total population Total number of households Total number of families Number of married couple families Number of female householder families Average household Income Education Percent high school educated Percent college or higher educated Labour force Percent total population employed Percent female population employed Total number of housing units Median number of rooms 90.5 37.0 380 873 39.9 423 599 547 28,050 659 59.8 6,035 7.9 683 632 18.745 59 64 TABLE 1 Demographic Profile of Present Market DEMOGRAPHICS Total population Total number of households Total number of families Number of married couple families Number of female householder families Average household Income Education Percent high school educated Percent college or higher educated Labour force Percent total population employed Percent female population employed Total number of housing units Median number of rooms Total number of owner-occupied housing units Total number of renter-occupied housing units DARTMOUTH 65,741 28,060 18,860 12,195 3,760 $41,107 BEDFORD 16,102 6,035 4,625 3,685 495 $73,804 SACKVILLE 55,765 18,745 16,655 12,965 1,815 $60,365 87.0 38.0 90.5 423 873 39.9 59.9 54.7 28.060 5.9 14,790 13,275 65.9 59.8 6,035 7.9 4.390 1,645 683 63.2 18.745 6.4 16,180 2,565 Supplementary Cases Paul did not want to offer alarm installations as part of his new venture, because he felt that they were both ersome 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 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 spe. cializing in locksmithing did offer the same service The Halifax area had roughly 20 locksmiths. In the three communities on which BLSS.concentrated the Paul did not want to offer alarm installations as part of his new venture, because he felt that they were both- ersome 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 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 spe- cializing 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 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 Paul had a cellular phone to respond to customer requests. After 5 p.m., however, Paul turned off the system and didn't take calls. Because he relied on his cell 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, Paul 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 $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 mar keting efforts, including social media, Kiji, and word of mouth. His Kijt ad identified the three communities, TABLE 2 BLSS Monthly Billings for Year TWO January February March April May June July $ 3,200 4.260 4,777 5,748 6,922 7,414 8,595 O forum/int... moodle.nait.ca C Managing Human Resources Khalid - Better (Official Video) - YouTube keting efforts, including social media, Kiji, and word of mouth. His Kijji ad identified the three communities, TABLE 2 BLSS Monthly Billings for Year Two January February March April May June July August September October November December Total $ 3,200 4.260 4,777 5,748 6.922 7,414 8,595 4,652 3,264 3602 3.087 2.905 $58 426 2 Supplementary Cases TABLE 3 Year Two Expenses $ 19,454 2,490 Business expenses Selling expenses Memberships (chambers of commerce and Canadian Association of Professional Locksmiths) Telephone Office expenses (materials/supplies) Ki & Yellow Pages Ads Other promotional expenses Total expenses 3,620 1,775 4.200 2600 $34,139 TABLE 3 Year Two Expenses Business expenses Selling expenses Memberships (chambers of commerce and Canadian Association of Professional Locksmiths) Telephone Office expenses (materials/supplies) KIWI & Yellow Pages Ads Other promotional expenses Total expenses $19,454 2.490 3,620 1.775 4,200 2,600 $34,139 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 Paul, 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