Case Study of the Week: How to Best Invest Resources in a Successful Start-up

September 13, 2021

Entrepreneurship

You are the partner of an entrepreneur that started Gleam, a mobile app that provides car washing services at customers’ homes or places of work. The company began by providing the service in a city of 100,000 people. As the new company gained more and more customers and positive reviews, Gleam was able to provide service in two other cities within two years. Now, seven years since its launch, Gleam is available in 50 cities.

Customers with the Gleam app request a car wash, providing an address. The Gleam representative arrives in a company van, takes the keys to the customer’s vehicle, and moves the vehicle onto a specially created foam mat that soaks up excess water and soap. The Gleam company van holds all of the necessary tools needed to wash a vehicle, including water powered by a hose for rinsing. There is no money transferred in person; the fee is paid via the app and the customer may add a tip for the representative, if desired. Gleam employees are paid per vehicle washed and are provided with marketing resources.

Investors are pleased with the success of Gleam in such a short time and have offered additional funding. The entrepreneur is unsure how to best use the additional funding. The entrepreneur is considering two options for the additional funding.

Option 1: With the business starting its 8th year, the Gleam company vehicles, especially those from the first several years, are beginning to look worn and have had minor repair issues. The entrepreneur is considering improving or even upgrading the entire fleet of Gleam company vans and supplies.

Option 2: Customers like Gleam because they can have a service completed without leaving home or the office. The entrepreneur feels that people feel the same way about having their vehicle’s oil changed. Nobody likes going to a service station to have the oil changed. The entrepreneur feels it would a great fit to widen the mix of services and add oil changes to the Gleam menu.

You will meet with your business partner to discuss the following:

  • Costs to consider associated with each option
  • Benefits associated with each option
  • If the risks are worth the possible benefits
  • Develop a final plan for the additional funding

Questions?

Randi Bibiano
Competitive Events Specialist
randi@deca.org

As DECA’s competitive events specialist, Randi primarily authors role-play scenarios for the collegiate and high school division’s competitive events programs. She also serves as DECA’s liaison for the Virtual Business Challenge and Stock Market Game. Randi assists with the recruitment of judges for both the high school and collegiate International Career Development Conferences. Randi has worked for DECA since 1998.

Discussion Questions

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Classroom Connection

Career CLuster:

Entrepreneurship

Instructional Area(s):

Entrepreneurship

Performance Indicators:

Develop plan to invest resources into improving current products or creating new ones
Assess the costs/benefits associated with resources
Explain the concept of product mix
Determine services to provide customers