Small Business management Case Study 3, Zatswho LLC

Cooper made a few prototypes herself from nontoxic foam and put them in a small tote-bag carrying case but realized that she would need help to launch her business. Cooper turned to the one person who had been advising her all along: her 26-year-old daughter Carrie Schwinoff. “She was a stay-at-home mom,” says Cooper. “I said, ‘Look, you are not going to have another opportunity like this to be a business owner.’” Schwinoff agreed because she wanted to supplement her family’s income but retain flexibility in her schedule to care for Gianna. She also liked the idea of building a business with her mother. “She’s my best friend, my partner in crime,” laughs Schwinoff.

Cooper invested $30,000 in the startup, which they named Zatswho, and the two women assembled 500 sets of Zatswho cards and began selling them. One of their first decisions was dividing business responsibilities. Cooper has a strong financial background and serves as CEO and CFO. Schwinoff, who has a degree in marketing, is responsible for sales and marketing. “Tweeting wasn’t something I could wrap my head around,” says Cooper. As in any business, disagreements arise, but the mother–daughter entrepreneurs have managed them effectively. For instance, Schwinoff thought that her mother’s use of the word “tactile” on the product’s packaging missed the mark. “Why don’t we say ‘pliable’ or ‘sensory?’” asked Schwinoff. “People get that more easily.” They changed the wording on the packaging to “soft” and “easy to hold.” “Because I am the mother and she is my daughter, my natural feeling might be, ‘I know better because I am more experienced.’ But I have to listen to her point of view. We are both learning that it takes discipline and respect to make this work.”

Cooper and Schwinoff are negotiating with a U.S.-based company that has a manufacturing operation in China to mass-produce Zatswho flashcards, which currently sell for $15.95 per set in stores in seven states

Questions

1.What tips can you offer Cooper and Schwinoff about family members who start and run a business together? What pitfalls would you warn them to avoid?

2.Suppose that Cooper and Schwinoff had approached you when they were launching Zatswho concerning the form of ownership they should use. Which form of ownership do you recommend they use. Why?

3.Work with a team of your classmates to brainstorm potential groups of people who make up Zatswho’s target market.

4.Help Cooper and Schwinoff develop a guerrilla marketing strategy for Zatswho. Write a two-page memo to Cooper and Schwinoff that highlights the key points of your strategy and the reasoning behind each one