Entrepreneurship Week 1 DQ 2- Submitted by Ashlie Rodrigues Introduction Takahiko Naraki a young entrepreneur in Japan owning Yuugen Gaisha called BIP his first venture started in 1997 failed and had to close BIP. He re-established BIP in 2001 with a new venture which deals with software models for customer’s relationship management. He also continues to work in a catalogue sales company which helps to support his daily needs as well as invest in his business. In order to cut cost and to be independent BIP was a one man show. The work pressure ultimately affected his health.
Today he is at the junction where he is very close to reach his goal to success at the same time his health is deteriorating. He has to decide if he can reach his goal without affecting his health. 1. Comprehend the Case Situation: Data Collection, Identify Relevant Facts Takahiko Naraki a young entrepreneur in Japan owning Yuugen Gaisha (a minimum three million yen capital investment business) called BIP his first venture on providing education started in 1997 failed and had to close BIP. He re-established BIP in 2001 with a new venture. He now deals with Internet-based business model which provides customer relation management services.
He works in a catalogue sales company which pays him ? 300,000 per month. He invests the money remained after household expenses on his venture. Naraki travels from Nagoya to Tokyo on business seven to eight times a week. This expense comes up to ? 30,000. He formed strategic partnership with Affiliate Company for NGX and E. X. NetCom for Super X. His partnership with Affiliate provided him with a strong customer base of approximately 50 companies generating revenue to Affiliate of ? 480,000 to ? 880,000 but BIP received only 25% of this. Inch & Morse, (2004). 2: Defining the Problem
The main problem lies in Naraki’s business structure. He needs to address to issues with respect to personal time management, business growth and financing. He is trying to handle too much. He does not have his own staff both sales as well as technical for which be borrows from Affiliate company and E. X. NetCom. He spends a lot of valuable time traversing from Nagoya to Tokyo. His strategic partnership with Affiliate Company and E. X. NetCom are informal. Right now he is in need of finance to expand his company so he has to choose between his strategic partners or a bank loan.
The overwork and stress has affected his health. 3. Causes: • Although Naraki has a strong strategically vision he neglects his day to day management of the company. He lacks a formal plan and relies mainly on proposals project wise. • In order to have good relation with senior staff he does extra work which is not paid. • BIP is a one man show company where Naraki is one in all i. e manager, sales man and technician • His traveling about seven to eight times per month to Tokyo from Nagoya as well as juggling between part time job as well as his venture has stressed him out. Naraki is a fiercely independent man and does not want to have share holders for which he has kept his relationship with the strategic partners still informal and for the same reason does not want to take financial help from them. 4. Generating Alternative Solutions Solution1: Naraki can enter into a formal partnership with either Affiliate or E. X. NetCom and continue to operate as it has been doing only that now he would be accountable to his partners. He could team up with Affiliate and open up a branch in Tokyo but the revenue from NGX and Super X could be utilized to invest in this.
He could monitor the progress from Nagoya and occasionally visit Tokyo at the same time his partners would also show keen interest and share the work and finance burden. Solution 2: With the ? 7. 8 million he is to receive from Affiliate he can reinvest in his company as most of his clients are in Tokyo he could open a branch with headquarters in Nagoya. He definitely needs to employ staff both in the sales as well as the technical field. This could reduce his traveling and improve his health. 5. Decision
In both cases he needs to quit from the catalogue sales job and concentrate on his business. Both the solutions address to the main problem of management, time and finance. The alternatives suggest that by employing a good work team he can increase sales, and hence revenue which is good for the growth of the company. The overwork, travel and tension which were the main reason for his ill health can be solved. He will be able to dedicate more time with his family and developing new programmers which will help keep a loyal customer base.
Solution 1 also reduces the risk of unexpected problems in business as he would have strong partners to guide and support him. 6. Taking Action and Following Up Naraki now will have to share his vision with a team. He needs to invest in his business. He can start up with first establishing an office in Nagoya and later in Tokyo. He could send his employees to Tokyo rather than traveling himself until the office in Tokyo starts. Now he will have to be more careful of the day to day activities till the business grows. BIP will now be able to generate a better income than before.
The odds for survival and a higher level of success change dramatically if the venture reaches a critical mass of at least 10 to 20 people with $2 million to $ 3 million in revenues. Timmons, (2009) Larger the firm size higher are its chances for growth and survival. References Inch, J. and Morse E. , (2004), ‘Takahiko Naraki, the three million yen entrepreneur’, Ivey Management Services, Version(A)2004-09-15. Timmons J. A. , and Spinelli S. Jr. ,(2009), New venture creation: Entrepreneurship for the 21st century, 8th edition, Mc Graw-Hill Publication.