How do we as entrepreneurs know how to make the right decisions, when it comes to starting a new business? It’s very simple and far from being complex. Knowledge is certainly key to making a sound decision. According to Stevenson (2001), there are other factors in to making a great deal, and they are timing, size, economy, technology, regulation, competition, pricing/valuation, and structure.
The other day I had the opportunity to meet the new Chick-fil-a Owner Operator, “Juan Ortiz”. Mr. Ortiz and I had a great conversation about the prospects of there would ever be enough need for a Chick-fil-a to be placed in the Nags Head area of the outer banks. Juan simply stated that Chick-fil-a has a team that looks at the analysis of the economy, size of the area, timing, as well as the competition. The major factor that the beach area in the outer banks would not be sustainable because of the off season, and the shutdown of the outer banks. The beaches are like an abandoned town we the season has been ushered out. The reality is most of the places to eat while during off season are laying personal off, as well as opening a portion of the day.
Juan, stated that there has been Chick-fil-as that have been set up in those same circumstances in Ocean City MD, which is an even larger area of population and within a period of time the business was forced to shut down. Jaun made a very valid point, and that was no matter how good the structure, the commitment you have as an owner/operator or even how great the entrepreneur is, if you are not in the right location your business will suffer.
In conclusion, you must pay attention to all the pieces of the equation, so that you can make an informed decision on how you grow your business. If one area of the equation is wrong, your whole equation is going to be off.
David Amis-Howard Stevenson (2001). Winning angels: the seven fundamentals of early-stage investing. Pearson Education