Buy-A-Job Small Business
Though this business appears to be perilously close to the "Low Competence" venture, it is really substantially different. Whereas the Low Competence venture is weak in all areas, this prototype venture is strong in the Persistence variables, of Frequency and Product Longevity. Yet it should be emphasized that this strength does NOT come from the entrepreneur, but rather is a feature of the marketplace. This is where the "self-employed" jobs fit in. Thus, anyone who operates a personal service small business might fit into this type of venture.
This type of venture is referred to as a "Buy-A-Job" small business because of its weaknesses, which lead to the mere substitution with a long-hours "grind" working for oneself (one low-paying customer at a time), as opposed to working for a company (one low-paying boss at a time). This is a useful "fallback" plan for times of high unemployment, but it is not entrepreneurial, because it does not create jobs or wealth for others.
In a Buy-A-Job venture, weak Core Competence => (implies) low New Combination, low Scarcity, high Hold-up, Uncertainty and Ambiguity with medium Slack. Low Innovation and medium Product Market Match lead to low Net Buyer Benefit and Margins.
Figure 1: "B/K" Diagram
ADVICE:
Start by increasing Core Competence and with it Innovation, to move (at a minimum) to a Lifestyle venture. This essentially involves "pruning" the rough edges of the Buy-A-Job business (examine the outer rings of the target diagram that should be moved toward the "bull's eye.")
Figure 2: Target "Bulls-eye" Diagram
Venture Example:
This case was prepared by Team Lynx as an entrepreneurship project at the University of Victoria. It is designed to illustrate the venture archetypes used in the New Venture Template through story and case description. Though the case is based on a true story and actual businesses, its name and likeness has been altered. The case is quite brief, so you should be able to read it quickly
David Ennis flopped down on the couch. Through the summer evening sunrays entering the streaked window a small plume of dust welled up around him as his tired body hit the cushions. His day had started at 6:15 am, fifteen hours earlier, and not by choice. The business phone line in his bedroom/office started ringing early, and in a half-wakened state he rolled over and answered it. An angry customer was furious because her lawn was two days past due for its weekly cut, and her mother-in-law was due to arrive that morning to stay for a weekend visit. Last time David cut it, he accidentally took out a wild rose that was growing beside the lawn. 'Either the grass gets cut by 11:00 am or you can find a new customer,' the angry voice stated. When he began this adventure, that kind of a statement would have shot him into action. More likely it never would have happened. But two days of rain, an costly truck breakdown, and a mower with a broken wheel had set him back significantly. The phone call was the culmination of what had been an exceptionally bad week, and it left little impression. One thing David had realized about being his own boss, he could tell off any customer he wanted. In his mind, this personal freedom and independence still outweighed his disdain of working for someone else.
BACKGROUND
David Ennis had finished high school and entered the Broadcast Communications Program in the fall at the local junior college in Calgary. Living at home kept his expenses down, and the food was far better than he could make on his own. David had worked for a couple of contracting companies the previous two summers, doing mostly general labor. During the school year David spent a significant amount of time in the weight room, working out and gaining size. Over the last two years, he added 50 lbs. of pure muscle. Working outside allowed him to show off this proud achievement, while improving his tan in the process.
After losing his job when his landscaping employer folded, David decided to venture out on his own. David remembered canvassing the neighborhood as a young boy with a shovel after heavy snowfalls, shovelling walks and driveways for pocket cash. The same thing would likely work lawn maintenance, he figured. David's family had an old electric lawn mower, an electric line trimmer, and an electric hedging shear. 'If I can get $12 to cut a lawn, and it takes me an hour to do it, I'm making $12 an hour. I'm going out on my own!' By mid-morning on Saturday, David had made the decision. He put on a nice shirt, combed his hair, and drove about 10 minutes to Rosedale, an upper middle class neighborhood overlooking downtown Calgary.
David decided to start with a nice house on a well-treed block. The lawn was a little out of control, and at a glance he thought he could do a lot around the place. He knocked on the door, and when the owner answered, David introduced himself and said, 'I'm cutting grass for summer work. Could I cut your lawn for you tomorrow?' The owner looked at him with a sideways glance, shook his head and said, 'No thanks, my son does it.' David took the rejection gracefully, and continued down the block. After about five more similar rejections, David was reaching the corner. One more house, then he'd go back and re-think his strategy. A warm smile greeted him as he made his pitch. 'Well, yes, I do need someone to do my lawn', she said. 'Do you do hedges and gardens too?' David was on a roll. He walked back to his car with a $100 job to cut the grass, trim the hedges, weed the beds, put away some storm windows, and clean the eaves troughs. David started at 8:00 Monday morning, took a half-hour for lunch, and finished the last flowerbed at 6:30 PM. During the early evening, a neighbor walking his dog stopped by and asked David for a quote to trim some hedges. David told him $24, figuring on about two hours to do the work. Nothing was going to stop him now!
The rest of the summer proceeded very much the same way. Work all day, come home around 6:00 PM, get cleaned up. David went canvassing for new work three to four nights a week. Some nights he'd come home empty handed, but most nights he'd find at least one or two people who needed some work done, and were willing to pay his princely $12/hour rates. Sometimes he'd bargain with the cheap customers to make sure he had work the next day. One night a guy asked him to quote an entire interlocking brick walkway. David went home and spent six hours that evening working out a quote. Although David had never built a walkway on his own before, the client hired him to start the next afternoon. David felt uncomfortable asking for cash up front, since the client was already being generous and trusting enough to let David take on the job knowing he had no previous experience. So he scraped up his cash and max'd his credit card to purchase the materials. David planned for the job to take four days, but in fact it took five and a half; David wanted to ensure the product was the best he could do. He only billed the client for four days work, as he had stated in the quote.
At the end of June, David looked at his bank account and decided he had enough cash to go out and get some better tools. The old electric mower was making a strange noise, and one wheel had fallen off just last week. The line trimmer was old and slow, and the hedge shears had zapped him one too many times while working in the rain. Hauling all this stuff around in an 82' Honda Civic was a little rough too. Pieces of grass clippings and hedge trimmings were all over the car. David had managed to find time for a date last weekend, but before going out he had to spend a good two hours cleaning out the car. The last lawn of the day belonged to lady with a big dog, and the mower hit something in the grass while David wasn't watching. A foul smell permeated the car, and it took two pine-tree air fresheners to mask the odor.
One of David's customers, a widow who had lost her husband two years earlier, had a 1979 Ford F250 sitting on a pad behind the house. The truck hadn't moved in years--the husband had lost his license three years before he died. It was full of crud and junk. David negotiated a deal with the customer to cut her grass for the rest of the summer, and to do some gardening and hedge clipping in exchange for the truck. David paid a mechanic $250 to do the brakes, and then completed the rest of the work on the truck himself at a cost of about $300.
David went to the local lawn mower shop and picked a quality commercial hedge trimmer. He talked the shop owner down to $395, confident that he'd made the right decision. His tools were his livelihood, and business was taking off big time.
July is one of the nicest months in Calgary. The Stampede comes to town during the first half of the month, and everything grinds to a halt. Nobody does any work in this bustling town for 9 days. It's impossible to find people in their offices, as many are volunteering, partying and visiting the fairgrounds. Events take place all over the city. Anyone who can get out of the house before 7 am will have their choice of several free pancake breakfasts, and tail gate beef on a bun dinners are nearly as plentiful. The slow down impacted David as well. Just when he geared up with the right tools for the job, the work started slowing down. Canvassing was useless because no one was home, and when he did find someone they usually had company and were uninterested in his spiel. For the first two weeks of July, David only found $400 worth of work. By this time he had about 7 customers with contracts to cut their lawns on a weekly basis, which added $92 a week in revenues.
As he drove home from an unsuccessful night of canvassing, a vibration developed in the rear of the truck. David ignored it by turning up the radio, and smiling at a couple of girls who were admiring his well tanned biceps. After a few blocks a thunderous crack, followed by a slam and a loss of power, brought him back to reality. The truck ground to a halt at the side of the road. David hopped out and looked under the truck. The driveshaft front U-joint had expired, and the driveshaft lay bent in the middle of the road 50 yards back. Little greasy chunks of metal were still stuck to it. The bearings had rusted out in the two years the truck sat unused. David wondered what else might be lurking mechanically speaking, as he walked to a pay phone to call a tow truck.
