Academic journal article Journal of the International Academy for Case Studies

Lorna Valdez on Cooking Up a Business: Lorwill's BBQ Stand

Academic journal article Journal of the International Academy for Case Studies

Lorna Valdez on Cooking Up a Business: Lorwill's BBQ Stand

Article excerpt

CASE DESCRIPTION

The search for opportunity is the entrepreneur's roller coaster. According to the SBA Office of Advocacy's annual report (Source: http://www.sba.gov/advo/), there are approximately 25.85 million small businesses in America. The economy and financial markets generally support the growth of small business. Many scholars estimate that 75% of the businesses formed will last less than five years. Approximately 19.86 million of these small businesses were sole proprietorships, which continue to rise according to an analysis of the Census Bureau data found in the SCORE website (Source: http://www.score.org/small_biz_stats.html). Between 1997 and 2002, women-owned businesses increased 19.8 percent or 6.5 million businesses. More than 14 percent of women-owned firms employed 7.1 million workers accounting for $173.7 billion in annual payroll in 2002.

CASE SYNOPSIS

This is the first record of the business history and entrepreneurship of Lorna Valdez placed in context. Also included is the history on the family and how it all started, a business she built from scratch and that continues to grow today--Lorwill's BBQ Stand. Also included is the economic analysis of each of her business ventures throughout her entrepreneurial venture until today. The current business is one that is in the growth stage, having opened for only three years and is continuing to expand.

As a small firm in a price-taking market, her managerial decisions are what created the competitive edge. In Guam, where there is high competition as well as demand for food and especially barbeque (a local favorite andpast time) she is able to offer the market something unique. This and other factors that lead to relatively higher market power for her business than other vendors in the Dededo area explain how its success has grown.

BEGINNINGS

In 1993, Lorna Valdez was working as a waitress at Chopsteak, a restaurant located in Tumon, Guam. After working there for just over a year, she was promoted to the position of manager with an $8 hour pay. In 1994, the restaurant was forced to close down for the construction of what is now Planet Hollywood. Her boyfriend, at the time, gave her the idea that they should open up a hamburger stand. The idea of opening up her own business and being her own boss strongly appealed to her. She also wanted to find a way to make more money. This was a defining experience for Lorna Valdez. She learned that she had a talent--she was good at cooking and enjoyed it.

HISTORY

The first business she attempted was a hamburger stand located in Tumon, where the Slingshot is now located. The food sold at the stand was mainly a variety of American-style hamburgers. The opportunity cost of opening up the food stand is the lost cost ranging between $1,200 to $1,500 working as a manager. The cost to rent out the space was $500 a month and Lorna Valdez soon recognized that daily revenue was not enough to cover personal bills and expenses. Several months after opening, she realized that the business was not making enough.

Although her first attempt was not as successful as she had hoped, she continued to follow her newfound talent in cooking. Thereafter, she endeavored on another method of selling food, which was delivering homemade food. She would prepare food at home, package it, and then deliver to various locations to sell. The food would be prepared three times a day, six times a week. Her market was limited to stores such as Napa Auto, Diamond Auto, National Office Supply, and various taxi companies located in Tumon.

She delivered food this way beginning October 1995 and continued for about a year. Her daily menu included mainly Filipino dishes such as fried lumpia, okoy, pancit, spaghetti, and food plates that included rice with choices such as calderetta, sinigang, and/or adobo. She also sold two soups that changed daily; varying from arroz caldo con goto, corn soup, arroz caldo, and other ethnic varieties. …

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