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BUS 101 CASE STUDY _1 LESSONS IN STARTING A SMALL BUSINESS

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					                          BUS 101 CASE STUDY #1
                  LESSONS IN STARTING A SMALL BUSINESS
       In 2002 Rusty and Beth Adcock had successful careers in Chattanooga, Tennessee. Rusty was an
accountant for Jackson, Mississippi-based Stuart Irby, and Beth worked in marketing at Hamilton Place Mall.
Although successful in their careers, both wanted to go out on their own and start a small business.
        They had looked at several business opportunities when Rusty‟s brother-in-law mentioned a small
restaurant franchise, Country Fisherman, located in Prentiss, Mississippi. The Adcocks researched the company
and found that the financial figures—cash flow and ROI—were good. It was also a cash-based operation, which
had strong appeal. “We didn‟t want an inventory-based system,” says Rusty. “It would have taken too long to
earn a return on our money.”
        The Country Fisherman Restaurant was started in 1987 by Peggy Tuma as a buffet-style seafood
restaurant, featuring all-you-can eat fried shrimp, steamed snow crab, and catfish topped off by a dessert table
featuring 12-15 different cakes, pies, custards, and ice cream. Husband Harold oversaw a gradual expansion
with two new locations—Mendenhall and Jackson, Mississippi. He also initiated the creation of the company‟s
franchise operations.
        The Country Fisherman franchise was attractive to the Adcocks because the operation system was
already in place. There was also a one-year training period, spent working in the other three outlets. This
training was invaluable, says Rusty, “because neither one of us knew how to cook.”
        After meeting with Peggy and Harold Tuma, the Adcocks began to study the demographics of the
Southern U.S. They settled on Brookhaven, Mississippi, a town of 10,000 located in South Mississippi between
Jackson and New Orleans. I-55, a major north-south artery, runs through the city, which is also crossed by U.S.
Highway 84 heading east and west. The town is also relatively wealthy. Telephone conglomerate WorldCom
started there. Although the company declared bankruptcy in 2002, the initial investors‟ money is still in the
area. Another factor clinched the deal—Beth‟s family lived in Wesson, ten miles north of Brookhaven, and she
had numerous brothers, sisters, nieces, and nephews living in the area.
        The initial franchise fee to the Tumas was less than $50,000, but renovating the retail location (an old
Super D pharmacy) and purchasing equipment raised the start up cost to almost $300,000. Eager to expand in
the central area of Mississippi, the Tumas offered to help finance the start-up, although it was ultimately not
necessary.
        The Adcocks moved back to Mississippi in 2002. Rusty continued to work for Stuart Irby, commuting to
Jackson while Beth dealt with the day-to-day details of setting up bank accounts and hiring staff. When the
restaurant opened in July 2003, Rusty quit his “day job” for grueling 80-hour workweeks at the restaurant.
Surviving a bumpy first year, the operation has been extremely successful. Beth credits this, partially, to the
family support they have received. Every time the restaurant‟s doors are open, at least one family member is on
site. Despite the depressingly bad survival figures for restaurants, (somewhere between 50% and 90% of
restaurants fail within the first three years,) the Brookhaven Country Fisherman is thriving.
       For the Adcocks, owning their own business is more than sales and profit. Beth loves the flexibility. “I
don‟t have to ask permission to take a vacation. I know that the restaurant will be in good family hands.”
        Both owners believe strongly in giving something back to the community for its support. Beth is
president of the local animal rescue league and often divides her day between greeting customers at the
restaurant and caring for the animals at the shelter. They recently began a Senior Citizen night, offering a
discounted dining opportunity for seniors in the area.i

1
 Sources: Rhonda Abrams, “Focus on Success, Not Failure,” USA Today, May 6, 2004; “New Study Finds Restaurants‟ Failure Rate
Lower than Expected,” Entrepreneur, September 22, 2003; “Adcocks come home to Mississippi, get „hooked‟ on restaurant,”
Brookhaven Daily Leader, April 30, 2004, page 13P; and interviews with the owners.
                         Discussion Questions for Case Study #1

After reading Case Study #1, please answer the following questions. Please write legibly or type with your
name at the top of the page. This assignment is worth 15 points.

1.       Why do you think the Brookhaven Country Fisherman has been so successful when most restaurants
         close their doors within the first three years?

2.       Do you think the restaurant would have been so successful if the Adcocks chose to operate as an
         independent restaurant rather than buying a franchise? Why or why not?

3.       The Adcocks chose to buy a franchise rather than opening an independent business. What are the
         advantages to choosing a franchise? What are the disadvantages?

4.       Would you like to own a restaurant? Do you think you would be successful? Why or why not?




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