A Mature Café (Scenario)

question 129

Multiple Choice

A Mature Café (Scenario)
Sarah has been operating and growing her café in an upscale neighbourhood for almost five years. She is happy with how the business has continued to increase in revenues as her customer base has become loyal over the years. She has just over 30 employees, two of whom are managers.
The lease on the space is coming up for renewal and this has brought up the notion of leaving the business and exploring other interests she has in travelling through Africa and Southeast Asia. Sarah has worked hard and she wants to be sure she gets as much out of the business as she put into it.
Another factor is the increasing competition in the area and the sinking feeling she has that it will be next to impossible to differentiate her business from the big chains opening on several street corners. Her fear is that her sales may have plateaued and there in fact will be a decrease in sales in the near future.
-It is difficult for Sarah to sell her business,as it would be for many entrepreneurs.She has created it from nothing and sees all of her heart and soul in the venture.She has consoled herself that it is at least worth a lot of money-perhaps enough for her to retire on (and she is only 42) .She needs to be sure she gets a(n) ________ so she can decide clearly if it is worthwhile to sell the business.

• A)second opinion from in industry insider
• B)lawyer to draft a purchase and sale agreement
• C)business valuation by a professional
• D)accountant to tell her what the tax implications might be if she sells

---

Definitions:

Competitive Environment

The external surroundings that involve all rivals, their strategies, strengths, and weaknesses, affecting a company's market position.

Resources

The assets, capabilities, processes, information, and knowledge that an organization uses to improve its effectiveness and create and sustain competitive advantage.

Relationships

Connections or associations between people, groups, or entities, often based on interactions, feelings, or business dealings.

Patents

Legal documents that grant inventors exclusive rights to their inventions, preventing others from making, using, or selling them without permission.