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usiness logistics management

Black-Jack AntiquesFor 13 years, Jeremy Black and Kevin Jack worked in adjoining cubicles for the department of transportation intheir state. Although Kevin was eight years older than Jeremy, the two men developed a strong friendship. Theygrumbled about their humdrum jobs (decent pay, great benets, no excitement or chance for advancement)and argued over the NBA (Cavs vs. Bulls) and the NFL (Browns vs. Bears). They discovered a mutual love forantique furniture—Jeremy for restoration and Kevin for collecting. Together with their wives, Jenny and Susan,they haunted estate sales and antique stores. At some point—neither remembered when—they begandiscussing the possibility of someday becoming partners and opening their own antique furniture sales andrestoration business. Six years ago, talk became reality. They took the plunge, left their jobs with the state, andopened Black-Jack Antiques: Furniture and Restoration. They did not bother to write a business plan or apartnership agreement.Kevin secured start-up loans for the business in his name because Jeremy’s amount of personal debt and lowcredit score made it dicult for him to get a loan. Jeremy’s construction skills and supply contacts saved theduo thousands of dollars in renovations to the building, and his reputation and client list, developed over yearsof restoring furniture, provided a solid base of customers and referrals. Both men considered it a win-winsituation and spent no time trying to decide who had invested most in the business.Black-Jack had its share of bumps along the way, but, aware of the high rate of failure among start-upbusinesses, the partners were pleased by the steady growth year after year. They agreed long ago on thedivision of labor. Kevin, a detail-oriented, business-savvy individual, would oversee the sales and business side,while Jeremy focused on the furniture restoration. Each played to his strengths. When Kevin seemed to belosing his re under the burden of the mundane day-to-day activities, Jeremy suggested that Kevin and Susanbuild up antique sales with occasional buying trips. The suggestion reignited Kevin’s excitement.As Jeremy’s young family grew, worries about his mounting personal debt led Kevin to oer nancial help ontwo occasions. “He’s my partner. We’re in this thing together. Besides, he would do the same for me if thesituation was reversed,” he said. Kevin was impressed that, although Jeremy had considerable stress in hisprivate life, he seldom brought it in to work. Jeremy’s focus on his work and on the clients remained strong. Inrecent months, Jeremy seemed particularly calm and more assured, and Kevin surmised that his partner wasworking through his nancial woes.The partners’ wives also enjoyed a strong friendship and often met for lunch, shopping, and other activities.Recently, Jenny let slip to Susan that Jeremy might soon have a job with a nearby furniture design rm. It was agreat opportunity for him to use his talents, and he thought perhaps he and Kevin could sell the store or Kevincould buy out his “share” of the business.This was a great shock to Kevin. Hurt and angry, he could not bring himself to confront Jeremy right away.Instead, he took his fears and concerns to “Coach.” Ed Morgan was his father-in-law, his old high schoolfootball coach, and a man of tremendous common sense. Coach’s way was not to preach or to advise, but tolet Kevin talk his way through a problem; Coach would ask a few probing questions until Kevin discovered thesolution for himself
After explaining the situation to Coach, Kevin expressed his devotion to the friendship, as well as thepartnership, and expressed concerns for Jeremy. “I’m worried that he is letting his dream die because of fearand that one day soon he will regret his decision,” Kevin said. “I want to do the right thing for Jeremy, Jenny, andthe kids, but if he leaves the business, he takes the restoration side away and I’m afraid the business will die. Idon’t know if the antique side can carry all the weight. If we sell, I made the major nancial investment, so howdo we split any prots from the sale? Jeremy has job prospects, but in today’s job market, would I be able tond something else at my age? It is all overwhelming. I want to be fair, but . . .”Coach leaned forward, placing his hands on his knees, and looked at Kevin, who was sitting on the nearby sofa.”I’ve been listening to you, Kevin, and your concerns sound legitimate to me. Remember, you have a businesspartnership and a friendship. What should a friend and business partner do?”Coach’s question was a wake-up call. That night, Kevin and Susan discussed the options and ways to proceed,beginning with frank discussions between the partners. Kevin and Susan understood that the lack of a writtenagreement could cause a problem if Kevin and Jeremy couldn’t work things out. On the friendship side, Kevinwanted to know what Jeremy was feeling that caused him to look for other work. On the business side, Kevinand Susan discussed the antiques side of the business, evaluating its strengths and potential separate from therestoration side. They also evaluated Kevin’s strengths and options he might consider for the future. What hasKevin learned about himself? What options does Kevin have? What should be his next move?What does this case illustrate about the risks of starting a business with a partner? How might those risks beminimized? Explain.

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