Mini-Case 15-1: "Where Do I Go Now

question 27

Essay

Mini-Case 15-1: "Where do I go now ...?
Christine Hernandez is in the process of launching a restaurant. Christine has never owned her own restaurant before, but she has worked for two of the best restaurants in town. Starting out as a hostess, Christine developed a special knack for the business and quickly worked her way up to the job of manager. Her 18 years of experience have given her a solid foundation for running her own restaurant.
Christine has worked with a counselor at a nearby Small Business Development Center and a counselor from the Service Corps of Retired Executives to prepare a business plan. She asked two other consultants and an accountant to review the plan and incorporated their suggestions into the finished product. When Christine took her plan to her bank however, the bank turned down her loan request of $165,000 citing the venture as "too risky, given the failure rate of restaurants." The bank acknowledged her experience as "a major asset," but said that it "could not expose itself to such risks in its portfolio." Christine heard the same story from three other banks.
Christine is confident in her ability to manage her own restaurant successfully, and she is determined to get the financing she needs to launch it.
-What might Christine do to convince a bank to lend her the money she needs to launch her company?

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Definitions:

Mean

The arithmetic average of a set of numbers, calculated by summing them and dividing by the number of numbers.

Area

A quantity expressing the two-dimensional size or extent of a shape or surface, typically measured in square units.

Variance

A measure of dispersion in a set of data points, calculated by taking the average of the squared differences from the mean.

Standard Deviation

A statistic that quantifies the dispersion or variability of a dataset, measuring the average distance between each data point and the mean.