Griffiths Guitar Works

"Two of the biggest barriers to starting my sole proprietorship are gathering the appropriate market information and convincing the money lenders that I am not just another long-haired, 19-year-old guy who wants to be a rock star. I have to convince people that I am absolutely set on pursuing my dream of building customized acoustic and electric guitars and offering a full range of stringed musical instrument repair services." These are the thoughts of Chris Griffiths of St. John's, Newfoundland, as he begins his business planning during the spring of 1992.

Background Information

Music has been a lifelong interest of Chris Griffiths. He started guitar lessons at the age of 12 and has played with various groups in his native city of St. John's, Newfoundland. After graduating high school in June 1991, Chris was undecided as to what career path to follow, so he decided to seek employment in the music field.

Finding employment with a small local music store, Chris quickly learned about the ordering, inventorying, and selling of musical equipment. He also became very familiar with the many music manufacturing sales agents from which the store purchased supplies and inventory. In addition, Chris began to complete minor repairs on damaged guitars and to modify guitars to suit specific customer preferences. Even though he had always been aware of the inability of local craftspeople to carry out major guitar repair work, Chris was surprised by the steady stream of customers who were requesting these major guitar repairs. In addition, he shared his customers' frustrations concerning the inconvenience and high costs of exporting this major repair work to the mainland. Chris began to wonder if a business opportunity was emerging.

This case was prepared by Kathy A. Hickman for the Atlantic Entrepreneurial Institute as a basis for classroom discussion and is not meant to illustrate either effective or ineffective management. Material in this case has been disguised.

Copyright © 1993, the Atlantic Entrepreneurial Institute. Reproduction of this case is allowed without permission for educational purposes, but all such reproduction must acknowledge the copyright. This permission does not include publication.

By the fall of 1991, Chris was beginning to realize that his opportunities for growth were very limited in his music store position. Therefore, he approached Mr. Chord, the owner of the store, to discuss the possibility of attending an intensive, two-month guitar building and repair course in Michigan, US. Mr. Chord was interested in the addition of guitar manufacturing and repair services to his existing music store operations and agreed to Chris's request for a leave of absence. This demanding, one-on-one course provided Chris with the knowledge and skills required to build acoustic and electric guitars and to repair and refinish stringed musical instruments.

In addition, Chris totally built two prototype guitars while completing the course, and he proudly carried them home to Newfoundland after graduation. Chris returned to his position in the music store in December 1991 and looked forward to opportunities to demonstrate the craft he had acquired. Unfortunately, by the spring of 1992, these opportunities had not developed. Sales in the store were fading, and Chris was desperately unhappy with his work situation. Fearing his job was in jeopardy, and frustrated that he was unable to pursue his craft, Chris began to think about opening his own small business. He enrolled in a small business night course at Cabot College, which provided valuable information regarding the start-up of a small business. At the same time, Chris began purchasing quality tools and collecting information on the guitar industry.

Part A: The Problem

Chris's fears had been well-founded because, in May 1992, Chris received his lay-off notice. That lay-off notice, in a very depressed economy, was the turning point in his career. His decision to pursue his business idea was with the realization that this was to be an all-out effort with no going back or half-hearted attempts. All of his energy was to be focused on making this business venture come true. With no personal capital and limited business experience, Chris knew that a great challenge lay ahead of him. His first step towards meeting this challenge was to research the potential market for his product.

Questions

1. What are the barriers which Chris must overcome in order to launch his business idea?

2. (a) One of the major barriers which Chris faces is a lack of market information. What kinds of market information do you think Chris must have before he can proceed any further?

(b) Suggest ways that Chris could acquire the information that he requires.

3. Design a telephone market survey to help obtain some of this information. Keep in mind that simple, direct, and brief questions/answers are most appropriate.