Babson Case Number: BAB072 | Length: 21 Pages

Abstract

This case could be positioned early in a new venture course. It is a good transition case from very early startups where the focus is almost entirely on the opportunity and the entrepreneur to one that also focuses on resources and operations.
John Esler, founder and CEO of Patio Rooms of America, founded this new venture a few months after graduating from Babson’s One-Year MBA program. Before studying for his MBA John had substantial entrepreneurial experience that included founding and building a “chain” of Subway Sandwich stores. He sold his chain of stores before entering the MBA program and used the proceeds to finance his studies and to underwrite the startup of his new venture. Six months into the new venture, John is experiencing a host of problems. The company’s sales orders are outstripping the rate at which crews can construct patio rooms. His operating cash flow deficit is growing bigger. He has serious disagreements to resolve with his licensor, who is also his exclusive supplier of material. And he has control and human resource issues that urgently need attention.