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 preface
Crafting the second edition of this book was both a pleasure and a chal-
lenge. The overwhelming goal of the book is to emphasize three core
tenets to starting an entrepreneurial venture:
1. Science of practice as the heart of starting and running a success-
ful entrepreneurial venture.
2. Art of turning an entrepreneurial venture into a success.
3. Processes that tie these two areas together into a coherent and
organized business.
The first tenet is that the science of practice is central to your success
as an entrepreneur. There is an inherent belief by many potential entrepre-
neurs that they know what needs to be done. However, extensive research
suggests that one of the biggest causes of entrepreneurial failure is a lack
of knowledge about how to design and build a business. The business that
seems so clear to the entrepreneur turns out quite differently. The result
is that a lack of knowledge leads to the entrepreneurial venture running
out of cash and time.
This book presents a systematic and thorough means for students and
potential entrepreneurs to think through their venture and the rich range
of concerns around it. Extensive research has been going on in this area
for decades, and we know a lot more about what works and what does
not work. One of the significant goals of this text is to provide you with
information about what really works. Without trying to overwhelm the
reader with research citations, but also ensuring that the student has well-
researched information, this text is grounded in the academic research
with a practitioner view to everything that is done.
The second tenet is that there is a lot of art to the concept, design, and
implementation effort required to start a new business. To teach the art
we present what other entrepreneurs have done in the past, so students
can consider what they would like to have as their own approach. In this
text we provide a great variety of real-world examples.
To fulfill this real worldview of entrepreneurship as an art, you will find
that each chapter starts with a story about a successful entrepreneur and
how he or she grew their business. Additionally, you will find throughout
the text two running cases that provide direct, applicable context to the
chapter contents. The first running case is that of Friends’ Home Health
Care. Friends’ Home Health Care was created by two friends to provide
better, more sophisticated, and more reliable home health care in their
community. The second running case is a family business called Flow
Right Brewery & Bar: A Family Affair. This running case follows the
development, design, troubles, and start-up of a family business. Finally,
we have included fourteen MiniCases at the end of the book where we per-
sonally interviewed entrepreneurs about their story. Each MiniCase fin-
ishes with advice from the entrepreneur and questions to consider about
applying the MiniCase learning to the development of your own business.
The third tenet of our approach involves the processes of conceptu-
alizing, designing, starting, and running a new business. Hundreds of
things must be considered, analyzed, and completed to take an idea to
a successful business. We firmly believe that these processes are crucial
steps along the way and have built this book in a manner that allows the
reader to build upon each concept by developing a process that results in
a fully crafted plan by the time you finish the book.

vii
 The ability to apply the science, art, and process of entrepreneurship
developed here, we argue, will lay the foundation for succeeding in entre-
preneurship. We say proudly that the overarching desire of this book,
Entrepreneurship: The Art, Science, and Process for Success, is that students
establish highly successful and very profitable businesses. We believe that
following and acting on the issues we lay out here will establish the foun-
dation for that success.

Entrepreneurship Is Not a Scary Word

If you are taking this course you have at least some level of desire to
be your own boss one day by establishing an entrepreneurial venture.
You have a plan to start (and succeed) at your own business venture,
and you see this course as groundwork for that plan. Beyond a personal
desire to be an entrepreneur, there are real, applicable reasons to take
this course. Today, 50 percent of all U.S. employees work for entrepre-
neurial businesses. Even if you do not ultimately start an entrepreneurial
venture, the odds are at some point in your career you will work for one.
Entrepreneurial businesses are everywhere. They include a wide range
of visible firms on the Internet. These firms are the makers and sellers
of a myriad of other goods plus providers of services that impact our
daily lives. Understanding the components of success and failure for your
future employer makes you a better employee.

Book Outline
To develop the understanding necessary to design, start, and manage
an entrepreneurial business, we have organized the book into fourteen
chapters that are, in turn, organized into five major sections. The first
section lays the groundwork needed prior to developing a new business
idea. Many individuals have considered starting a new business when
an opportunity was presented to them or when they were frustrated by
their current positions. However, prior to this step there are several areas
that demand examination. Chapter 1 introduces the students to the text
with a fun and engaging look at the twenty-first-century entrepreneur.
Chapter 2 examines the potential entrepreneur’s personal propensities or
willingness to take on risk, a core aspect of entrepreneurship. Chapter 3
focuses on how to generate ideas and perform an initial evaluation for a
new business.
The second section of the text is entitled “Due Diligence on the Business
Idea.” In the last chapter of section one, the potential entrepreneur has
generated a business idea. In this section there is due diligence on that
idea. Due diligence is a process of examining the environment around the
new business to establish the opportunity for the new business and then
using that knowledge to craft the approach. Chapter 4 launches the first
step in the due diligence process by developing a set of methods for exam-
ining the external environment in which the new business might operate
to understand if there is an opportunity for such a business. Chapter 5
develops the crucial steps necessary for the development of a strategy,
including the firm’s mission.

viii preface
 A key element in the success of the entrepreneurial venture is the finan-
cial foundation of the venture; no matter how good the idea, without
a solid financial foundation the business will likely fail. Accordingly,
Section 3 is titled “Establishing a Financial Foundation.” The chapters in
this section include Chapter 6, which establishes how to analyze the cash
flow of the firm. Chapter 7 discusses methods that the entrepreneur can
use to analyze the financial health of the new business.
The fourth section of the text is titled “Building the Business” and focuses
on putting the new venture in operation. Chapter 9 discusses marketing
the business. Chapter 10 reviews the legal frameworks for a new business,
including the many approaches that are available to protect the business.
Chapter 11 details human resource management. Chapter 12 rounds out this
important section of the book by discussing the business operations design.
The last section of the book is titled “Important Issues for Entrepre-
neurs” and examines two other issues critical for an entrepreneur to
consider as the entrepreneur starts a business. Chapter 13 examines both
exiting the business and the need to turn the firm around if performance
is not as great as desired. Chapter 14 examines two means to buy into a
business rather than starting it from scratch. They are buying an existing
business and franchising.

Features New to This Second Edition

■ The entire book has been reorganized to present the material in
a manner that is more aligned with the entrepreneur’s efforts to
develop a business. We moved the three chapters that relate to
financing, accounting, and financial analysis forward into the
third section of the book.
■ The opening vignettes to each chapter have been changed from
the prior edition to include cutting-edge entrepreneurial compa-
nies including Uber, Zane’s Cycles, Numi Organic Tea, Weedmaps,
Ploom, Philly Pretzel, and AeroPress, among others.
■ Two new running cases are in each chapter in the revised text. Each
chapter follows Friends’ Home Health Care and Flow Right Brewery
& Bar: A Family Affair as they moved from idea to successful busi-
nesses. Each running case is tied to the chapter material.
■ In addition to Review Questions in the end-of-chapter material,
every chapter now also includes a new section called Business Plan
Development Questions. The goal of these questions is to turn the
material in the chapter into actions for the business plans being
developed by the students. Also, both Individual and Group Exer-
cise sections have been added to help students develop their entre-
preneurial skills individually as well as within a group.
■ Fourteen MiniCases are now included at the end of the text. Each
case is based on interviews by the authors and provides context
and entrepreneurial advice simply not available in any other text.
These include: The Varsity Shop, The ClearCollar, Hannington
Massage, OCJ Apparel, Alton’s Kitchen & Cocktails, and RavioliOli.
■ A new Business Plan (The Fraudian Slip) that has been annotated
by the authors is provided as an example of how this is all pulled
together by students in a course.

preface ix
 Additional Changes by Chapter
Chapter 1 The Twenty-First-Century Entrepreneur
■ New Opening Vignette: Oren’s Daily Roast Coffee and Tea.
■ Completely rewritten to provide a more engaging and fun introduc-
tion to the text.
■ Every statistic brought forward to 2014.
■ Redesigned how the Business Plan is developed.
■ Addition of a one-page pitch sheet example.

Chapter 2 Individual Leadership and Entrepreneurial

Start-Ups
■ New Opening Vignette: Philly Pretzel and Dan DiZio.
■ Introduce what is meant by a family business. Family business
issues are then addressed in each chapter particularly as we dis-
cuss the running case about the brewery and bar noted below.
■ Friends’ Home Health Care running case is introduced. This case
develops in each chapter through the rest of the text. It follows the
design, start-up, and running of a business with friends as busi-
ness partners.
■ Flow Right Brewery & Bar: A Family Affair running case is intro-
duced. This case develops in each chapter through the rest of the text.
It follows the design, start-up, and running of a family business.

Chapter 3 Business Idea Generation and

Initial Evaluation
■ New Opening Vignette: Uber Changes the Business (the wildly fast-
growing ride-sharing business)

Chapter 4 External Analysis

■ Updated and carried forward one of our favorite vignettes: Guay-
akí Sustainable Rainforest Products, Inc.
■ Introduced the concepts of “Normal” and “Unusual” capabilities to
address developing a competitive advantage.

Chapter 5 Business Mission and Strategy

■ New Opening Vignette: Zane’s Cycles.

Chapter 6 Analyzing Cash Flow and Other

Financial Information
■ New Opening Vignette: Numi Organic Tea

x preface
Chapter 7 Financing and Accounting
■ This was previously Chapter 9. We brought forward this chapter
and others to tie together all the financial statements and analysis
into the same section.
■ New Opening Vignette: AeroPress.
■ Added a section on crowd funding, which has become a popular
entrepreneurial finance mechanism.

Chapter 8 Financial Analysis

■ This was previously Chapter 12. The Pro Forma Cash Flow State-
ments, Chart of Accounts, P&L, Income Statement, and Balance
Sheet have been recrafted.
■ We updated and carried forward one of our favorite vignettes:
VaVaVroomonline.com.

Chapter 9 Establishing the Legal Foundation

■ This was previously Chapter 7. This move was suggested by our
students and the professors using this text, who indicated that it
worked better after all the financials were developed and analyzed.
■ New Opening Vignette: Weedmaps: The Yelp of Marijuana Buying.
■ Everything was updated to reflect changes in the law.

Chapter 10 Human Resource Management

■ New Opening Vignette: USA Gypsum (a recycling story).
■ The chapter has been updated to reflect the dramatic changes in
recruiting methods that have occurred in the past few years.

Chapter 11 Marketing
■ New Opening Vignette: James Monsees and Adam Bowen: Ploom
(high-end electronic cigarette).
■ Updated all the delivery mechanisms to include the vast array of
new approaches to marketing, especially social media.

Chapter 12 Establishing Operations

■ This was formerly Chapter 8. We thought that it would work better
as the next step in the process of starting a new business. While
the potential entrepreneur has to consider operations early on, the
details might be best developed after much of the business has
been vetted.
■ New Opening Vignette: Indigo IT (an IT support company).

preface xi
 Chapter 13 Exit/Harvest/Turnaround
■ With all the changes in tea consumption and availability, we
decided to update and carry forward one of our favorite vignettes:
Tealuxe.

Chapter 14 Franchising and Purchasing an

Existing Business
■ New Opening Vignette: La Madeleine and Patrick Leon Esquerré
(one of the truly exceptional restaurant entrepreneurs).

Outcomes
Our ultimate goal is that students will leave this class not only with a
much greater appreciation for what it takes to start a business, but with
the foundations necessary to actually start that business. The entrepre-
neurial businesses that surround you every day did not come into opera-
tion or stay in operation by chance. Instead, it took tremendous effort and
work for these businesses to exist and succeed.
We expect that students will be able to take what we present here as a
foundation for your own business. Entrepreneurs are the economic back-
bone of this nation and the central hope for its future.

xii preface
 acknowledgments

We would like to acknowledge the dedicated instructors who have gra-

ciously provided their insights for this second edition. Their input has
been extremely helpful in pointing out corrections to be made, suggest-
ing areas that needed further development, or topics that needed to be
included or covered earlier in the text.

George Bernard Ted W. Legatski

Seminole State College of Florida Texas Christian University
Nancy Brown David Lucero
Lakeland Community College Greenville Technical College
Carlene Cassidy Tim McCabe
Anne Arundel Community College Tompkins Cortland Community
College
Raven Davenport
Houston Community College Jeffrey E. McGee
The University of Texas at Arlington
Kimberly Ann Goudy
Central Ohio Technical College Michelle Neujahr
Southern Maine Community College
Kurt Heppard
United States Air Force Academy Diane R. Sabato
Springfield Technical Community
R. Michael Holmes
College
Florida State University
Leo Trudel
Andreea N. Kiss
University of Maine at Fort Kent
Iowa State University
Cassmer Ward
Jonathan Krabill
Queens University of Charlotte
Columbus State Community
College Mark Zarycki
Hillsborough Community College

xiii
 Key Text Features
Each chapter includes key features that help illuminate important ideas
in interesting and applied ways.

Chapter-Opening
part chapter
The Twenty-First- Vignettes
1 1 Century Entrepreneur Every chapter begins with
a profile of a real entre-
preneurial business. These
OREN’S DAILY ROAST
portraits provide an over-
Oren Bloostein had a passion for cof-
fee and a strong desire to be his own
boss. After graduating from the Uni-
view of both the everyday
versity of Pennsylvania, he worked for
Saks Fifth Avenue in New York City.
Frustrated by the layers of manage-
successes and the failures
ment and passionate about starting
something truly unique, he decided
to found a coffee shop that would
stand apart from the others. He would
associated with business
dedicate his efforts to roast his beans
on-site, only in very small batches,
where he could ensure that the beans
ownership. Each of these
had been roasted within the past 24 hours (“The 24 Guarantee”). In addition, he would use
only straight unblended single-origin beans that were specially prepared in front of the cus-
tomer (“Truth in Brewing”). He wanted to work with the farmers who grew the beans and set
vignettes end with thought-
up a system whereby he helped the farmers grow better beans, and, in turn, pay the farm-
ers above-market rates.
Oren’s parents gave him $50,000 for his venture, which he combined with his savings
provoking questions for
learning objectives
and a small loan to open a small 400-square-foot storefront on the Upper East Side of
Manhattan in 1986. He has stayed true to his business plan even as Starbucks, Caribou,
and many others opened competing stores over the ensuing years.
discussion.
Today, Oren’s Daily Roast has 10 locations in Manhattan and is a $10 million a year busi-
After studying this chapter, you will be able to: LO1-4 Describe the impact of entrepreneurial ness. Oren regularly travels to Third-World countries to help communities with their infra-
businesses on society structure (water supplies and schools). Not only does he pay more than the going rate for
LO1-1 Explain the rationale behind starting
a small business. LO1-5 Discuss the worldwide impact of the beans he purchases, but he pays what he considers to be a premium price for quality,
entrepreneurial businesses.
LO1-2 Discuss the history of entrepreneurship not quantity.
in the United States. LO1-6 Define an entrepreneurial business. 1. Oren’s separates his business from that of major national chain by his 24 hour pledge?
LO1-3 Identify the type of people who are Would such differentiation work in your city?
entrepreneurs 2. Do businesses have an obligation to help suppliers like the coffee farmers or should
business only focus on price of the product?

Sources: http://www.orensdailyroast.com/index.aspx; “About Oren’s: About Us,” http://www.orensdaily-

roast.com/ContentData2.aspx?Contentid=1; “Ten Inspiring Success Stories,” Inc., www.inc.com/ss/10-
inspiring-small-business-success-stories#8

bam23181_ch01_001-017.indd 2 10/10/14 4:45 PM

bam23181_ch01_001-017.indd 3 10/10/14 4:45 PM

Running Cases
FRIENDS’ HOME HEALTH
Friends’ Home Health
Beginning with Chapter 2 and running
throughout the rest of the book, this case In 2012 three friends who worked in the same nurs-
ing facility started talking about starting a business
business. The three potential entrepreneurs had a con-
versation with the uncle; he advised them to spend a little
together. The three friends had known each other for more time investigating their motivations and personal
looks at chapter topics within the context a number of years. The friends include one registered
nurse (RN) (Betty), and two licensed practical nurses
risk orientation before they actually considered going
into business together. He related the story of his first
of a new entrepreneurial business in the (LPNs) (Joan and Bob). The RN typically is the super-
vising nurse on the ward and the LPNs do more of the
business, which he had started with his best friend. The
two had been lifelong friends and thought they knew all

home health industry. Each chapter pro- direct care of individual patients. The friends observed
the increasing numbers of elderly people in the hos-
there was to know about each other. Not only had they
been friends since childhood, each had been the best
pital. As they talked with the family members of these man in the others’ wedding, and each was the godfather
vides a new aspect of this business to con- patients they realized there was a need for a reliable
home health firm in the area. Despite the existence of
for the other’s oldest child. Although they thought they
knew each other well, when it came to money and the
sider, ultimately giving you a fully realized several operations in the area (one a national chain), the
patients’ families were constantly talking about prob-
level of risk they were capable of handling, they were
substantially different people. Whereas the uncle was

look at how a business must work through lems with the current group of home health firms. The
families told stories about caregivers who did not show
very frugal, his partner believed that money needed to
be enjoyed today. Ultimately their business partnership
up, were not willing to do distasteful jobs, had poor fell apart. Although the financial loss was significant,
a series of issues as it moves from idea to training, and some who outright stole from the home.
Home health workers go to the homes of clients to
even more devastating was the loss of the friendship
between the two men and their families. He has always
reality. Each chapter’s case concludes with help the individuals bathe and eat, and generally assist
the elderly or otherwise physically impaired individu-
felt the experience was a significant failure and not one
he wanted to repeat.

questions designed to help the students als in their homes. Often a family member provides this
assistance but needs support to adequately care for the
Joan’s uncle has had other businesses and partner-
ships since that initial failure. He now believes that
individual or to be able to take a break from their care- although he needs to like a person in order to work
think through issues related to the busi- giving. Home health workers typically undergo far less
training than do LPNs, and some operators provide very
closely with him or her, it is much more important that
they agree on such key issues as money and risk.
ness they wish to start. little oversight of the in-home workers.
The three friends (Betty, Joan, and Bob) wanted more
Therefore, the uncle suggested the three friends
prepare with some simple tasks:
control over their lives and the opportunity to be paid more
for their efforts. Working in the health care facility involved QUESTIONS
long and odd hours where they might work all night and 1. Compare how each of them prepared his or her
never see their families. They felt that in their current posi- monthly family budget.
tions, they were working very hard but were receiving only 2. Discuss how much debt each was willing to take on
limited direct rewards for that effort. These issues pushed credit cards.
the three to talk about starting a business. The discussions
initially were little more than talk; however, in the past few 3. Discuss whether each was willing to lend family
months these discussions had become more serious. They members money, and the reasons for their answer.
were not sure how to make a home health business unique, 4. Have each person answer this question: If you inher-
but they knew they wanted to start one. ited $250,000, what would you do with it?
Joan’s uncle had founded several businesses and The outcome of this exercise for our three potential
appeared to understand what it took to be successful in business owners will be discussed after Exercise 1.

bam23181_ch02_018-035.indd 21 11/11/14 9:49 PM

xiv preface
 Flow Right Brewery & Bar: A Family Affair FLOW RIGHT BREWERY & BAR: A FAMILY AFFAIR*

A second running case throughout the book focuses Chris Flow had long wanted to be his own boss. Working flow generated in the business to entice anyone to buy it.

on a family business. Family businesses must deal for one of the bigger banks in the area, he sat in a cubicle
processing mortgage applications. Although there was
always something different in each application, he had
Thus, he had decided simply to close the business.
That night Chris and his wife talked at length about
Chris taking over that location and turning it into a brew

with the same issues that all new businesses must the process down to a science. He was so good at his work
that his boss gave him the unenviable task of handling
mortgage workouts for people who had fallen behind in
pub where aficionados of brewing could gather and
enjoy locally brewed beers. He and his wife had saved
up over $100,000, which they were willing to commit to

address. However, everything is complicated by the their payments. By 2014 he could see the writing on the the venture, and he was confident that he could bring
wall. Virtually anyone involved in the mortgage process- in a set of partners who would also invest in the busi-
ing business was eligible to be laid off as the mortgage ness. There were a lot of things to do over the next few
weeks if this was going to be a reality, but Chris was
family interactions and interests. The case also ends
crisis had subsided. Several of the nation’s largest banks
had rounds of layoffs in their mortgage divisions that truly excited about business for the first time in years.
amounted to thousands of employees. The next day Chris contacted a real estate agent and
Since graduating from college, Chris had a fascina- found out that the previous owner of the restaurant had
with questions designed to help the students to think tion with brewing beer. He worked at a microbrewery
in Boulder, Colorado, during his college years and had
broken a 10-year lease that still had 6 years left on it but
no personal guarantee. The owner of the property was
taken a number of classes on making beer. He was a anxious to get the property leased again and was willing

through issues related to the business. member of the local brewing club and regularly won the
club awards for the beer he brewed at home. What’s
to throw in everything inside the restaurant for no extra
monthly charge if Chris would sign a new 10-year lease that
more is that Chris’s passion to brew beer had taken over Chris would personally guarantee. Even though the lease
his two-car garage much to the consternation of his payments seemed quite reasonable—especially given that
wife. He regularly worked with new club members to all of the kitchen equipment, tables, chairs, counters were
learn what he considered a craft. his for free—it was nevertheless a big financial commitment
On his way home from work one day he was shocked as Chris would have to still pay for the lease even if the busi-
to see that one of his favorite restaurants had closed. The ness was not a success. Chris and his wife decided to take
location was very good, but there was never much of a the plunge and FLOW RIGHT BREWERY & BAR was born.
crowd. Chris personally knew the owner, although he was
*The names and small details have been changed in this running
only peripherally aware that the owner had been in the heat case. We will use this case throughout the text to illustrate concepts
of a divorce. Once the divorce was final the owner planned raised in each chapter and how this particular firm addressed them
to move from the area, but there was not sufficient cash as they built the business.

Ethical Challenge Boxes bam23181_ch02_018-035.indd 31 10/10/14 4:46 PM

ETHICAL CHALLENGE These dilemma-based scenarios and questions

How far can or should you go to collect information as a customer cross an ethical line? Can you lie about
look at ethical realities within the successful
about your competitors? Most competitors will be pri-
vate companies, and their financial information will not
why you are there? Can you hire a private investigator
to find out information that is not in the public domain? creation of a business, and challenge students
be part of the public record. Is it appropriate to be a What if the existing firm is owned by a friend? At what
customer of your competitor for the purpose of collect-
ing competitive information? At what stage does acting
stage can you copy ideas from your friend and still main-
tain your ethical standards?
to examine the moral complexities of starting
a business. Each challenge ends with questions
designed to encourage the students to think how
such ethical challenges will apply to their poten-
bam23181_ch04_058-077.indd 71 10/10/14 4:48 PM
tial business.

Exercises EXERCISE 1
Extensive exercises in every chapter include open-ended ques- 1. What additional items would you like to see included in
tions for students to ask themselves as potential entrepre- the Friends’ Home Health cash flow statement?
2. Do you believe that the numbers above are realistic?
neurs. These exercises not only provide general exercises for Explain.
discussion in class but also help guide the student so that by 3. For which items would you like to have additional
information? How might this be best presented?
the last chapter the students will have developed a full busi- 4. Solely based on the cash flow statement, would you
ness plan that can be used to launch a new business. believe that this venture was worth investing in if you
were an investor? Why or why not?

End-of-Chapter Material
db h f
Each chapter concludes with the following: INDIVIDUAL EXERCISES
1. Talk to two entrepreneurs. Do they track cash 2. How long did it take these entrepreneurs to
■ Summary flow? If so what is their view of cash versus reach breakeven in their current business?
profit in their business. 3. What was their advice on how conservative to
be on the cash needed to start the business?
■ Key Terms
GROUP EXERCISES
■ Review Questions 1. Each person on the team should prepare a a. What are the basic requirements of these
preliminary cash flow statement for his or loans?
her proposed venture. Look at each other’s b. Why do you think the government
■ Business Plan Development Questions analysis and discuss what other revenue cate-
gories could be developed to better focus sales
supports such loans for entrepreneurial
business?
tracking? c. What insights does this provide each per-

■ Individual Exercises 2. Use an Internet search engine to look for SBA son on the team about his or her own pro-
cash flow loans. posed ventures?

■ Group Exercises
who pitched in an additional $110,000. Neither Jeff nor While sales continued at a very slow and yet steady
MiniCase 12 the investors took any additional equity with this infusion. rise, the business was out of money again by February

MiniCases
As Jeff ran the numbers with the new capital he real- 2013. Jeff met again with his investors. He shared with
ized the business needed to have sales of $2,000 every them that he had an investor who was ready to put in
day of the week to achieve breakeven. When you have a $150,000 and Jeff needed everyone to pitch in another
THINKING CRITICALLY Sunday that brings in only $700, you have to make that $7,000 to $8,000 ($40,000 total), so the business could
up on other days. Jeff thought he could do it, but realized stay afloat until April when the new money would come in.
it would be hard. All of the investors and Jeff pitched in the money. Unfor-
Jeff Barry—RavioliOli In the meantime, other negative things were happen- tunately, however, by April the new investor’s circum-
ing in the business. Personnel turnover became a critical stances had changed and he decided not to invest in the

MiniCases are now included at the end of the text.

issue. A key success factor for a restaurant are its cooks. business.
access and parking. Building on his understanding of the Jeff needed people who could efficiently make the ravioli RavioliOli was simply out of money. The business was
competition, Jeff then took six months to develop a full the desired way. Unfortunately, two cooks left in March now approaching $50,000 in revenue a month. Jeff made
business plan that was ready to pitch to investors. and the head chef and store manager left within the first the decision to pull the plug on his beloved restaurant
Jeff started his search for investors with a friend who three months. Jeff ended up working at the store 18 plus 14 months after it had opened.

These longer cases look at real businesses. They

had money to invest. After securing that investment, he hours a day trying to ensure it succeeded. As the pres-
was referred to one investor after another and he was able sure on the business grew, it increasingly became a fam- What Advice Does Jeff Have for New
to quickly raise the capital that he believed he needed to ily affair as everyone pitched in to serve customers. Sales Entrepreneurs?
start the company. This included $175,000 of his own continued to grow but were not close to breakeven. At the
1. Go with your gut. If it feels right, do your homework
money. Securing the location took far longer. He looked big July 4th festival in Oak Brook, RavioliOli sold 4,000
and go for it. There are no guarantees in any ven-
at close to a hundred sites with various realtors. Finally, in plus toasted raviolis and then ran out (much to the dis-
ture, or even more so, in any job. To the extent that

examine a real entrepreneur and how that owner early 2011, Jeff found the perfect location in Oak Brook, may of the dozens still standing in line). There seemed to
you can, pinch pennies and keep fixed cost as low as
Illinois, just west of Chicago. Jeff really loved the location be great demand for the company offering.
possible.
because of its access to major roads, great parking, vis- After nearly driving himself into the ground, Jeff hired
2. Anticipate, Anticipate, Anticipate! Whatever the ven-
ibility, and access to the corporate lunch crowd. Although an experienced restaurant manager who quickly put
ture, do things right; you’ll know when you break that
the real estate market was still reeling, the cost of the procedures in place and relieved Jeff of having to do
rule. Start early in your life. . . part of my issue was that

approached the business and the struggles associ-

lease was substantial (although well within Jeff’s busi- everything himself at the restaurant. Jeff and the new
I was approaching 50 years old, and had three kids
ness plan projections). After extensive negotiation, Jeff manager were able to drive costs down some, but the
in college, one in high school, and tuition became a
signed a lease for 2,200 square feet and began to gen- issue remained that they were not hitting $2,000 day
huge overhead in the grand scheme of things. I loved
erate specific plans for the space. Working with design- ($60,000 month) in revenue. Jeff spent countless
running the business, but I hated losing money. Hav-
There are new businesses that do everything correctly, ers and architects, they developed a great space. There hours trying to renegotiate the lease to no avail. He cut
ing said that, a very good friend of mine who knows
pivot well as the environment changes, have great cus- is an old adage that says a new business will cost twice back staff as far as he could and still reasonably serve

ated with success. They offer practical, real-world

me quite well and saw me sweating out the losses
tomer value, and yet still fail to achieve breakeven. Jeff as much as you expect and take twice as long. Jeff had customers.
reminded me that money is indeed a renewable com-
Barry had been serving friends and family his grand- heard this and felt like he was prepared when it did hap- Jeff met with everyone who would meet with him about
modity and somehow, someway, we always figure out
mother’s ravioli recipes for 20 years. During all that time, pen. However, in the approval process with the landlord the business to get advice on how to turn things around.
a way to get it back.
he worked in specialized parts of banking, including and building inspectors, Jeff was surprised to find out He learned from experienced restaurateurs that he was
right in line with his costs, procedures, and approaches. 3. Although I made many mistakes, I don’t regret a single
asset-based financing and equipment leasing. Jeff was that his kitchen was going to require special ductwork
minute. We created memories of a lifetime through our

examples of core concepts within the entrepreneur-

essentially a numbers guy who had a passion to start that had not been accounted for in the plans. Several He was also told it would just take time to develop.
In December 2012, Jeff met with his investors again to ravioli-making parties, birthday events, family gather-
an entrepreneurial venture centered around his specialty other smaller items were also required for unexpected
secure more funds. The business was out of money and ings, catering jobs, special events, and captivating our
approach to ravioli. changes, all of which ended up costing an additional
was still losing money each month. The investors had put in younger patrons’ bright-eyed amazement as we rolled
Jeff finally decided to get serious about the effort dur- $110,000.
all the money they wanted to invest and recommended that out the Ravs. We built something very cool, very dif-
ing the recession of 2009. Noticing that the fast casual As a part of his original business plan Jeff had set
Jeff close down the business. Unwilling to take this step just ferent, very original, and something for which I am very
dining market seemed immune to the recession and was aside $220,000 in working capital to take care of con-

ial framework discussed in the book. yet, Jeff dipped into his 401(k) retirement fund for $100,000 proud.
growing like no other part of the market, he felt the time tingencies and provide the business with a cash buf-
was right for him to start a restaurant based on that ravioli fer. He decided to have all the small items and the new while not getting any additional share of the business for his
new investment. With the ability to keep going with his own QUESTIONS
concept. RavioliOli was to be a fast-casual dining restau- duct work installed. RavioliOli opened for business in
rant where fresh handmade specialty ravioli were deliv- late February 2012. investment, Jeff obtained the blessing of his current inves- 1. Can your business survive a long lead time to break-
ered to your table within five minutes of ordering. The Everything was going well at first. There were opening tors to obtain a new major investor in the business even if even? How long do you project?
location was going to be slightly upscale and the décor parties, Groupon offers, and lots of press about the new their equity was diluted. He was meeting with several poten- 2. Other than have more money, what could Jeff have
was going to be warm, comforting, and comfortable. business. However, the working capital fund was rapidly tial investors every month seeking fresh capital. done to save the business?
Jeff did a complete competitive analysis using him- depleting as revenue did not cover expenses. It is not
self and his family to learn all they could about competing unusual for a new restaurant to take 18 to 24 months
restaurants. The family would go to various fast-casual to achieve monthly breakeven. In the case of RavioliOli,
concept restaurants and record how many people dined however, the reserves had been spent early on the duc-
there during lunch and dinner. He tracked average meal twork and other items, so Jeff took out an equity line
ticket prices and looked for locations that had great road loan on his house for $75,000 and met with the investors

294 Part Six MiniCases MiniCase 12 Thinking Critically 295

bam23181_ch06_098-119.indd 119
preface xv
10/10/14 4:49 PM
Results-Driven Technology
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xvi
Media Rich eBook
Connect, provides students with a cost-saving alternative to the tradi-
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Efficient Administrative Capabilities

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Reviewing Homework Giving Tests or Quizzes Grading

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without Connect with Connect without Connect with Connect without Connect with Connect

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Connect keeps instructors informed about how each student, section, and
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Connect and LearnSmart allow instructors
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performance relative to learning objectives. in more ways than just the explanations
■ Collect data and generate reports required they hear from me directly. Because of
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in new ways, requiring them to think. I
AACSB.
now have more students asking questions
in class because the more we think, the
more we question.

Instructor at Hinds Community College

preface xvii
 Actionable Data
Connect Insight is a powerful data analytics tool that allows instructors
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Connect Instructor Library

Connect’s instructor library serves as a one-stop, secure site for essential
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Questions can be organized by Learning Objective, topic, level of
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Instructor’s Manual: The IM outlines course materials, additional
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For every question posed in the text, the IM provides a viable answer.
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PowerPoint Slides: PowerPoint slides include important chapter con-
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Asset Map: We know that instructors’ time is valuable. To help you
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xviii preface
 Course Design and Delivery
Blackboard® Partnership
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preface xix
 help turn all their students’ study time into learning moments immediately
supported by their lecture. To learn more about Tegrity, watch a two-minute
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xx preface
 table of contents
Preface vii chapter 3
PART 1 Laying the Groundwork BUSINESS IDEA GENERATION AND
INITIAL EVALUATION 36
for Small Business
Generating Business Ideas 39
Opportunity Identification 44
Choosing a Business 46
chapter 1 Summary 54
THE TWENTY-FIRST-CENTURY Key Terms 54
ENTREPRENEUR 2 Review Questions 54
Why Start a Business? 4 Business Plan Development Questions 54
A Brief History of Entrepreneurial Businesses Individual Exercises 54
in the United States 6 Group Exercises 55
Who Are Entrepreneurial Business Owners Today? 8 Endnotes 55
How Does Society Benefit? 8 Credits 55
Entrepreneurship Around the World 11
What Is an Entrepreneurial Business? 11 PART 2 Due Diligence on the Business
Summary 16 Idea
Key Terms 16
Review Questions 16
Individual Exercises 16 chapter 4
Group Exercises 16
Endnotes 16 EXTERNAL ANALYSIS 56
Credits 17 Defining Your Industry 58
Defining Your Customers 60
Developing the Information for the External Analysis
chapter 2 of Competitors 62
Developing a Competitive Map 65
INDIVIDUAL LEADERSHIP AND Additional Issues for External Analysis 68
ENTREPRENEURIAL START-UPS 18
Competitive Advantage 70
Founders Are the Reason Why Entrepreneurial Summary 73
Businesses Work So Well 22 Key Terms 73
Evaluating Your Entrepreneurial Orientation 23 Review Questions 74
Triggers for Starting a Business 27 Business Plan Development Questions 74
Supports 29 Individual Exercises 74
Form a Business Doing What You Like 33 Group Exercises 74
Summary 34 Endnotes 74
Key Terms 34 Credits 75
Review Questions 34
Business Plan Development Questions 34
Individual Exercises 35
Group Exercises 35
Endnotes 35
Credits 35

xxi
chapter 5 Summary 134
Key Terms 134
BUSINESS MISSION AND Review Questions 134
STRATEGY 76 Business Plan Development Questions 134
Mission Statements 78 Individual Exercises 135
Sustainable Competitive Advantage 84 Group Exercises 135
Step 1: Develop a List of Your Business’s Assets and Endnotes 135
Capabilities 85 Credits 135
Step 2: Split the List into Standard and Unique
Assets 85
Step 3: Evaluate Competitiveness of Unique
Resources or Capabilities 87
chapter 8
Strategy 89 FINANCIAL ANALYSIS 136
Summary 93 Importance of a Solid Financial Foundation in an
Key Terms 94 Entrepreneurial Business 138
Review Questions 94 Techniques for Measuring Performance 138
Business Plan Development Questions 94 Ratio Analysis 141
Individual Exercises 94 Deviation Analysis 148
Group Exercises 94 Sensitivity Analysis 149
Endnotes 95 Use of Short Surveys in Business 150
Credits 95 Importance of Having a Measurement Focus 153
Summary 154
PART 3 Establishing a Financial Key Terms 154
Foundation Review Questions 154
Business Plan Development Questions 155
Individual Exercises 155
chapter 6 Group Exercises 155
Endnotes 155
ANALYZING CASH FLOW Credits 155
AND OTHER FINANCIAL
INFORMATION 96
PART 4 Building the Business
Importance of Cash Flow Analysis 98
Developing Cash Flow Statements and Budgets 106
Other Financial Tools 111
Summary 116
chapter 9
Key Terms 116 ESTABLISHING THE LEGAL
Review Questions 116 FOUNDATION 156
Business Plan Development Questions 117 Various Legal Forms of Business to Determine the
Individual Exercises 117 Best Design for a Proposed New Business 160
Group Exercises 117 Basics of Contracts 166
Endnotes 117 Role of Leases in the Legal Formation of the New
Credits 117 Business 167
How Laws, Rules, and Regulations Benefit New
Businesses 169
chapter 7 Importance of Copyrights, Trademarks, and Patents to
a New Business 171
FINANCING AND ACCOUNTING 118 Role That Insurance Plays in the Risk Portfolio of the
Key Financial Issues Involved with Starting a New Business 172
Business 120 How to Develop an Effective Board of Advisors and
Basics of Funding a Business 122 Board of Directors 173
Importance of Proper Accounting When Starting
a Business 129

xxii table of contents

 Summary 174 chapter 12
Key Terms 174
Review Questions 174 ESTABLISHING OPERATIONS 214
Business Plan Development Questions 175 The Use of a Critical Path Chart 218
Individual Exercises 175 How Location Can Be Used as a Competitive
Group Exercises 175 Advantage 221
Endnotes 175 The Important Issues in the Financing Considerations
Credits 175 of New Firms 223
The Various Methods with Which a New Firm
Establishes Legitimacy in the Market 224
The Importance of Production Management in
chapter 10 Start-Up Ventures 226
HUMAN RESOURCES How Production Charting Is Accomplished 226
MANAGEMENT 176 The Importance of Quality as a Competitive
The Elements of Human Resources 179 Tool 228
The Process of Hiring Employees 179 The Type and Condition of Equipment Needed at
The Means for Retaining Employees 185 Start-Up 229
The Pertinent Aspects of Employee Probation How Timing Is a Competitive Advantage 231
and Firing 190 The Issues Related to Time Management in the
Broad Coverage Regulations and Laws 190 Starting of a New Business 231
The Unique Aspects of Human Resources Within a Summary 232
Family Business 192 Key Terms 232
Summary 193 Review Questions 232
Key Terms 194 Business Plan Development Questions 233
Review Questions 194 Individual Exercises 233
Business Plan Development Questions 194 Group Exercises 233
Individual Exercises 194 Endnotes 233
Group Exercises 194 Credits 233
Endnotes 195
Credits 195 PART 5 Important Issues for
Entrepreneurs
chapter 11
MARKETING 196 chapter 13
Basics of a Marketing Plan 198 EXIT/HARVEST/TURNAROUND 234
How to Develop a Pricing Model 202 Need for Developing an Exit or Harvest Plan and
The Various Types of Promotion Available to a New Ideal Timing for That Plan 236
Business 204 Steps for Selling a Business 238
The Methods for Sales Management 207 Turnaround and Business in Decline 249
Summary 212 Implications and Issues Involved in Closing a
Key Terms 212 Business 251
Review Questions 212 Summary 252
Business Plan Development Questions 212 Key Terms 252
Individual Exercises 213 Review Questions 253
Group Exercises 213 Business Plan Development Questions 253
Endnotes 213 Individual Exercises 253
Credits 213 Group Exercises 253
Endnotes 253
Credits 253

table of contents xxiii

chapter 14 PART 6 MiniCases
FRANCHISING AND PURCHASING
AN EXISTING BUSINESS 254 Appendix 300
The Elements of Franchising 257 Glossary 315
The Process of Buying a Franchise 259
Case Index 319
The Process for Buying an Existing Business 265
Summary 268 Subject Index 320
Key Terms 268
Review Questions 269
Individual Exercises 269
Group Exercises 269
Endnotes 269
Credits 269

xxiv table of contents

Another random document with
no related content on Scribd:
a list of names, and in no way illustrate the present subject. It will be
nothing relevant to our purpose, to know how many Ericas were enumerated
by Petiver, Plukenet, Hermann, Oldenland, Ray, &c. &c.; as, before
Linnæus had, by his mode of classification, determined the precise limits of
the Genus, the confusion that then pervaded all the elder Botanists is such,
that any comment from them, would rather perplex, than elucidate.
Wherefore, beginning with the Systema Naturæ of Linnæus, Vol. II. of
1767, including the European species, he there enumerates but 42; and
Dahlgren, in 1770, edited a dissertation, under his eye, on the genus,
containing a catalogue of 58 names from Bergius, the Mantissa, &c.
Thunberg returning from Africa in 1772, added 13 to the number; all of
which were inserted in the Supplementum Plantarum of 1781. From this last
work, and some other sources, Murray has, in his Syst. Veg. of 1784, made
up a Catalogue of 74 names. The last to be noticed, till the appearance of the
Hort. Kew. is, the Dissertatio de Erica; published under the inspection of
Thunberg, in 1785, with a list and descriptions of 91 species. In the year
1789, a Catalogue of the plants cultivated in the Royal Gardens at Kew, was
published by Mr. Aiton; where, 41 Heaths are to be found in the 2d Vol.;
and four in the addenda at the end of the 3d, making in all 45. Martyn in his
Edition of Miller’s Dictionary, fasciculus of 1795, article Erica, enumerates
but 84. Willdenow, collating from all the foregoing, and assisted by his
friend Wendland, of the Royal Gardens at Herenhausen, Hanover; has
mounted the list to 137, in his Species Plantarum, now publishing in
continuation at Berlin. This, however, as will appear by the catalogue, falls
far short of the number, we have now, in actual cultivation in Britain. From
the great number of beautiful specimens lately received by G. Hibbert, Esq.
many of which were accompanied by seeds, now living plants, contributing
to the present richness of the extensive and superb Collection of that
Gentleman at Clapham, and brought from the Cape of Good Hope by Mr.
Niven, who was employed for the only purpose, of amassing the vegetable
treasures of that country, to enrich the Clapham gardens, and herbarium; as
well as, from the numberless importations, by different hands, of seeds,
since we have been in possession of that territory; a fair conjecture may be
made, that the Genus is not bounded, by double the number of species with
which we are at present acquainted. Few, if any, of the species but have been
increased by cuttings; which has occasioned the total disuse of propagation
by layers; wherefore, the only methods we shall treat of, is this, and from
the seed. The process for the making, and planting of the cuttings, is as
follows. Let a middle sized pot be prepared by filling it, within three inches
of the margin, with small broken potsherds, or some such matter; to the end
that, a constant and ready drain may be gained for the water, which it will be
necessary to give the cuttings, at any time the earth, &c. shall appear dry on
the surface. Then consulting the list given with Volume 1st, take a sufficient
quantity of sandy loam, sandy peat, or common sand, or a mixture of any of
them finely sifted, to fill the pot up to the margin, and press it lightly with
the hand; thus prepared it is fit to receive the cuttings. These must be taken
about an inch long, or shorter, according to the nature and season of the
plants making their fresh branches, from the smallest and tenderest shoots;
cutting off the leaves from two-thirds of their length close to the shoot; for
which a pair of small scissars is the most convenient. When a few are thus
made ready, for not many should be cut at a time, lest they wither before
they can be planted, with a small piece of wood, tapered to a point, dibble
them into the pot; fixing the lower end of the cutting as firm as possible.
When the pot has been thus filled with them, at about half an inch distance
each way, leaving a clear half inch from the inner edge; cover them with a
small bell-glass, procured as near as possible to fit within its inner rim, then
place it under a large hand-glass, or frame, where it must be kept from the
stronger rays of the sun, until the cuttings are rooted. Some time after this
has taken place, which will be known by their growth, the small bell-glass
must be first removed; about a week after, the pot may be taken from under
the large hand-glass, and the plants exposed to the open air, in the shade of a
north wall, or in winter put in the shady part of the green-house, to protect
them from the sun and wind, till they are removed into separate pots. The
seeds of some species, which ripen in this country, as well as those which
may be procured from the Cape, may be sown about the middle of March, in
pots, prepared in the same way as directed for cuttings; with this exception,
that the earth be invariably sandy peat finely sifted; the seeds should be
covered so slightly, that they may be but just concealed; when covered, they
must be watered with a watering-pot whose rose, or head should admit of a
passage for the water, only as a light dew; lest the seeds be all thrown
together, or washed over the side of the pot. Both plants from cuttings, and
seedlings, may be removed with greater safety whilst quite young, than after
they have acquired a considerable size. The smallest pots that can be
procured, are the best for the first transplanting; in which they should
remain, till the pots are quite filled with roots. The earth in which all Heaths
thrive most is a soft, loose, sandy peat. That nothing may be wanting, which
we can contribute, to the illustration of the Genus; a list is subjoined,
communicated by Messrs. Lee and Kennedy, of all those species cultivated
by them at their nursery, Hammersmith; unquestionably, the most extensive
collection, of living plants, of every denomination, now in Europe.
 ERICA coccinea.

CHARACTER SPECIFICUS.

Erica, antheris muticis, sub-inclusis, stylus exsertus; flores in sumitate

ramorem, verticillati, clavati, curvati, coccinei; foliola calycis acuta; foliis
senis, incurvis.

DESCRIPTIO.

Caulis erectus, cinereo-fuscus, pedalis; rami verticillati, erecto-patentes,

raro ramulosi.
Folia sena, incurvata, acuta, glabra, sub-glauca; petiolis adpressis.
Flores in summite ramorum verticillati, conserti, brevissime
pedunculati, bracteæ calyciformes.
Calyx. Perianthium tetraphyllum, foliolis subulatis, marginibus
membranaceis, acutis, carinatis.
Corolla curvata, elevata, pubescens, sanguinea; oris laciniis erectis.
Stamina. Filamenta octo capillaria, longitudine tubi. Antheræ muticæ,
sub-inclusæ.
Pistillum. Germen turbinatum, sulcatum. Stylus filiformis, exsertus.
Stigma tetragonum.
Habitat ad Caput Bonæ Spei.
Floret a mensi Augusti, in Decembrem.

REFERENTIA.

1. Calyx, et Corolla.
2. Calyx lente auctus.
3. Stamina, et Pistillum.
4. Stamina a Pistillo diducta, anthera una lente aucta.
 5. Stylus, et Stigma, lente aucta.

SPECIFIC CHARACTER.

Heath, with beardless tips, just within the blossom, shaft without; the
flowers grow at the end of branches in whorls, club-shaped, curved, and of a
scarlet colour; the leaves of the cup are sharp-pointed; the leaves grow by
sixes, and are turned inwards.

DESCRIPTION.

Stem upright, of a brownish ash-colour, growing a foot high; branches

grow in whorls, upright, and spreading, seldom branching.
Leaves grow by sixes, turned inwards, sharp-pointed, smooth, and of a
bluish green; the leaf-stems pressed to the branches.
Flowers grow in close whorls at the top of the branches; the foot-stalks
very short, the floral leaves appearing like a second cup.
Empalement. Cup four-leaved, which are awl-shaped, skinny at the
edges, sharp-pointed, and keel-shaped.
Blossom curved, club-shaped, downy, and of a blood colour; the
segments of the mouth are upright.
Chives. Eight hair-like threads, the length of the tube. Tips beardless, and
just within the blossom.
Pointal. Seed-bud turban-shaped, and furrowed. Shaft thread-shaped,
and without the blossom. Summit four-cornered.
Native of the Cape of Good Hope.
Flowers from August, till December.

REFERENCE.

1. The Empalement, and Blossom.

2. The Empalement magnified.
3. The Chives, and Pointal.
4. The Chives detached from the Pointal, one tip magnified.
5. The Shaft, and its Summit, magnified.
 ERICA conspicua.

CHARACTER SPECIFICUS.

Erica, antheris basi bicornibus, exsertis; corollis clavatis,

sesquipollicaribus, luteis; foliis quaternis, glabris, obtusis, crassis.

DESCRIPTIO.

Caulis fruticosus, erectus, tripedalis, ramosus; ramulis verticillatis,

brevibus.
Folia quaterna, obtusa, linearia, crassa; petiolis brevissimis, adpressis.
Flores in apicibus ramulorum terminales, nutantes, pedunculis brevibus,
bracteis tribus spathulatis.
Calyx. Perianthium tetraphyllum; foliolis obtusis, glabris, sub-ovatis.
Corolla clavata, sesquipollicaris, lutea, basi attenuata; oris laciniis
magnis, revolutis.
Stamina. Filamenta octo capillaria, receptaculo inserta; antheris bifidis,
basi bicornibus, exsertis.
Pistillum. Germen cylindricum, sulcatum. Stylus filiformis. Stigma
tetragonum.
Habitat ad Caput Bonæ Spei.
Floret a mense Junii in Augustum.

REFERENTIA.

1. Calyx et Corolla.
2. Calyx lente auctus.
3. Stamina et Pistillum.
4. Stamina a Pistillo diducta, antherâ unâ lente auctâ.
5. Stylus et Stigma lente aucta.
 SPECIFIC CHARACTER.

Heath, with tips two-horned at their base, and without the blossom: the
blossoms are club-shaped, an inch and a half long, yellow: the leaves grow
by fours, are smooth, blunt, and thick.

DESCRIPTION.

Stem shrubby, upright, grows three feet high, and branching: the smaller
branches are short, and grow in whorls.
Leaves grow by fours, are blunt, linear, thick, and have short foot-stalks
pressed to the branches.
Flowers are terminal at the summit of the smaller branches, waving,
having short foot-stalks, with three spathula-shaped floral leaves.
Empalement. Cup four-leaved: leaves blunt, smooth, and nearly egg-
shaped.
Blossom club-shaped, an inch and a half long, yellow, and tapering to
the base: the segments of the mouth are large, and rolled back.
Chives. Eight hair-like threads, fixed to the receptacle: the tips are cleft,
two-horned at their base, and without the blossom.
Pointal. Seed-vessel cylinder-shaped, and furrowed. Shaft thread-
shaped. Summit four-cornered.
Native of the Cape of Good Hope.
Flowers from June till August.

REFERENCE.

1. The Empalement and Blossom.

2. The Empalement magnified.
3. The Chives and Pointal.
4. The Chives detached from the Pointal, one tip magnified.
5. The Shaft and its Summit magnified.
 ERICA coronata.

CHARACTER SPECIFICUS.

Erica, antheris aristatis, inclusis; corollis cylindrico-clavatis,

speciosissimis; foliis octonis seu spiraliter sparsis, truncatis, arcuatis.

DESCRIPTIO.

Caulis fruticosus, erectus, bipedalis, basi simplicissimus, rami pauci,

simplices, longi.
Folia octona, linearia, obtusa, supra scabra, subtus sulcata, attenuata in
petiolos longos capillares.
Flores plures, subterminales, simpliciter verticillati, conserti, viscosi;
pedunculi longi recurvati, bracteis tribus instructi.
Calyx. Perianthium tetraphyllum, foliolis lanceolatis, viscosis, adpressis.
Corolla cylindrico-clavata, pollicaria, apice recurvata, ima parte
profunde carnea, apice viridie, ore arctata, laciniis rectis.
Stamina. Filamenta octo capillaria; receptaculo inserta. Antheræ
aristatæ, inclusæ.
Pistillum. Germen clavatum, sulcatum. Stylus filiformis, subexsertus.
Stigma peltatum, concavum, viride.
Habitat ad Caput Bonæ Spei.
Floret a Februarii, in Aprilem.

REFERENTIA.

1. Folium unum, cum petiolo.

2. Calyx, et Corolla.
3. Calyx, lente auctus.
4. Stamina, et Pistillum.
 5. Stamina a Pistillo diducta, anthera una lente aucta.
6. Stylus, et Stigma lente aucta.

SPECIFIC CHARACTER.

Heath, with bearded tips, within the blossoms, which are cylindrically club-
shaped and very shewy; the leaves grow by eights or spirally scattered,
appear cut off at the ends and arched.

DESCRIPTION.

Stem shrubby, erect, grows two feet high, simple at the base, with but
few branches, which are simple, and long.
Leaves grow by eights, are linear, blunt, rough on their upper, and
furrowed on their under surface, tapering into long hair-like foot-stalks.
The Flowers are numerous, nearly terminating the branches, in simple
whorls, crowded together, and clammy; the foot-stalks are long, bent
backward, with three floral leaves.
Empalement. Cup four-leaved, leaflets lance-shaped, clammy, and
pressed to the blossom.
Blossom cylindrically club-shaped, an inch long, bent back at the point,
the lower part of a strong flesh colour, the end green, compressed at the
mouth, whose segments are straight.
Chives. Eight hair-like threads fixed into the receptacle. Tips bearded,
and within the blossom.
Pointal. Seed-vessel club-shaped, and furrowed. Shaft thread-shaped,
almost without the blossom. Summit shield-shaped, concave, and green.
Native of the Cape of Good Hope.
Flowers from February, till April.

REFERENCE.

1. A Leaf, with its foot-stalk.

2. The Empalement, and Blossom.
3. The Empalement, magnified.
4. The Chives, and Pointal.
5. The Chives detached from the Pointal; one tip magnified.
6. The Shaft, and its Summit magnified.
 ERICA costata.

CHARACTER SPECIFICUS.

Erica, antheris muticis, inclusis; stylo exserto; corollis sub-cylindraceis,

incarnatis, costatis; foliis pubescentibus, ternis.

DESCRIPTIO.

Caulis fruticosus, bipedalis, erectus ramosus; ramuli frequentissimi.

Folia caulina, terna, recta, linearia, obtusa, pubescentia; folia ramea,
erectiora, ovata, sub-serrata, acuminata; petiolis adpressis.
Flores plures, tres, quatuorve ramuli terminates; pedunculi brevissimi.
Calyx. Perianthium duplex; interius, tetraphyllum, foliolis sub-ovatis,
acuminatis, serratis, coloratis, apice sulcatis, adpressis; exterius triphyllum,
priori brevioribus, virescentibus.
Corolla sub-cylindracea, apice paulula curvata, incarnata, costata; oris
laciniis erectis, albidis, obtusis.
Stamina. Filamenta octo, ima parte spathulata, receptaculo inserta.
Antheræ inclusæ, muticæ.
Pistillum. Germen sub-cylindricum, sulcatum. Stylus attenuatus,
exsertus, apice curvatus. Stigma tetragonum virescens.
Habitat ad Caput Bonæ Spei.
Floret a Februarii, in Junium.

REFERENTIA.

1. Folium unum, lente auctum.

2. Calyx, et Corolla.
3. Calyx, lente auctus.
4. Stamina, et Pistillum.
 5. Stamen unum, lente auctum.
6. Stylus, et Stigma, lente aucta.

SPECIFIC CHARACTER.

Heath, with beardless tips, within the blossom; pointal without; blossoms
nearly cylindrical, flesh-coloured, and ribbed; leaves downy, growing by
threes.

DESCRIPTION.

Stem shrubby, grows two feet high, upright, and branching; the smaller
branches are numerous.
The Leaves of the stem grow by threes, straight out, linear, blunt, and
downy; those on the smaller branches, more upright, egg-shaped, a little
sawed at the edges, and sharp pointed; the foot-stalks pressed to the
branches.
The Flowers are numerous, growing by threes, or fours, at the end of
the smaller branches; foot-stalks very short.
Empalement. Cup double; the inner four-leaved; leaves almost egg-
shaped, pointed, sawed, coloured, furrowed at the point, and pressed to the
blossom; the outer three-leaved, shorter than the former, and greenish.
Blossom nearly cylindrical, curved a little at the end, of a flesh colour,
and ribbed; the segments of the mouth are upright, white and blunt.
Chives. Eight threads, spathula-shaped at the base, and fixed into the
receptacle. Tips within the blossom, and beardless.
Pointal. Seed-vessel almost cylinder-shaped, and furrowed. Shaft
tapered, without the blossom, and curved at the end. Summit four-cornered,
and green.
Native of the Cape of Good Hope.
Flowers from February, till June.

REFERENCE.
1. A Leaf, magnified.
2. The Empalement, and Blossom.
3. The Empalement, magnified.
4. The Chives, and Pointal.
5. One Chive, magnified.
6. The Shaft, and its Summit, magnified.
 ERICA cruenta.

CHARACTER SPECIFICUS.

Erica, antheris aristatis, sub-inclusis, foliis quaternis, corollis sub-ternis,

glabris, clavato-cylindricis, pollicaribus; saturate sanguineis.

DESCRIPTIO.

Caulis fruticosus, bipedalis, erectus; rami erecti, ramulosi; ramulis

brevissimis, frequentissimis.
Folia quaterna, linearia, glabra, nitida, saturate viridia, petiolis
brevissimis, adpressis.
Flores in ramulis terminales, prope caulis summitatem, racemum quali
formantes longum; pedunculi longi, bracteis tribus ad basin instructi.
Calyx. Perianthium tetraphyllum, foliolis lanceolatis, serratis, adpressis.
Corolla clavato-cylindrica, glabra, cruenta, pollicaris; oris laciniis
rectis, obtusis.
Stamina. Filamenta octo capillaria, receptaculo inserta; antheræ aristatæ,
sub-inclusæ.
Pistillum. Germen sub-ovatum, sulcatum, pubescens; stylus exsertus;
stigma tetragonum.
Habitat ad Caput Bonæ Spei.
Floret a mensi Augusti, in Decembrem.

REFERENTIA.

1. Calyx, et Corolla.
2. Calyx, lente auctus.
3. Stamina, et Pistillum.
4. Stamina a Pistillo diducta; anthera una lente aucta.