Case Study of the Image Cafe Essay Example

Their initial client was Bingwa, an educational software company.

However, Bingwa requested that Metamorphosis Studios relocate to Princeton, New Jersey to work for them. However, Clarence Wooten and Andre Forde declined the offer as they believed they were destined for something bigger. As mentioned by Kathryn F, Spinelli (2004: 33-40), Metamorphosis Studios was not a successful venture. In 1998, Metamorphosis Studios was acquired by MediSolv, Inc, according to Clarence Wooten, Jr. (2005). Furthermore, in early 1998, Clarence Wooten established his third company, Image Cafe.

In 1995, the internet started to advance and numerous companies acknowledged the necessity of having their own websites to market their products and services online. However, not all companies had the necessary skills to build websites. Clarence Wooten identified this as a chance and founded Image Cafe, a company that provided web design services to assist companies in promoting themselves on the web (Kathryn F, Spinelli, 2004: 33-40).

When establishing Image Cafe, Wooten looked for funding to support his venture. He aimed to obtain $300,000 with a valuation of $3 million.

In total, he received $110,000 from 10 different investors. The Image Cafe website was ready to launch after four months of preparation. However, at that time, Clarence Wooten had used up the cash during the launch. He approached the existing investors again to request an additional $150,000 in the form of a bridge loan. This time, Clarence Wooten aims to raise $3 million with a valuation of $10 million (Kathryn F, Spinelli, 2004: 33-40).

In June 1999, Image Cafe once again experiences a shortage of cash. The company's founder approaches three potential investors, including two venture capital firms and Network Solution, who are all interested

in investing. This time, he requests $1 million from each investor, valuing the company at $10 million. However, one investor believes this valuation is too high. Clarence Wooten recalls that the Mid-Atlantic Venture Association had shown interest in investing in Image Cafe before. After negotiations, the association agrees to invest only when Clarence Wooten completes the necessary due diligence.

Even though Middle Atlantic Venture understands that Clarence Wooten is in immediate need of cash, they refer him to two new investors who are willing to provide a $300,000 loan based on a $6 million rating. At this point, Clarence Wooten must make a final decision whether to seek additional investors or continue to fight, as all along he desired a $10 million rating (Kathryn F. Spinelli, 2004: 33-40).

A Business Plan to Manage Clarence Wooten's Business

The writer believes that Clarence Wooten cannot sustain his business due to his lack of a proper business plan. Every decision he makes is based on his feelings or beliefs, with no foundation. Before starting a business, he should create a business plan outline to gain better perspective on his actions.

The business program outline includes an Executive Summary detailing the entire business plan. Additionally, the Company Description provides information on products, services, ownership, partnerships, etc. Next, the Industry Analysis highlights industry trends, size, growth rate, and sales projections. The Market Analysis focuses on buyer behavior, competitor analysis, market segmentation, and target market selection. Lastly, the Marketing Plan outlines marketing strategies for Clarence Wooten's services.

Sixth, the Management Team and Company Structure comprise of the founder and key personnel. Seventh, the Operations Plan delineates the company's functioning and Clarence Wooten's work generation process. Eighthly,

the Product (or Service) Design and Development Plan centers on development perspectives, tasks, challenges, risks, and Intellectual Property. Finally, Financial Projections hold utmost importance for entrepreneurs as Clarence Wooten must ascertain the initial funding amount required for his business, secure those funds, and allocate them appropriately.

According to Bruce R. Barringer ; R. Duane Ireland (2010: 144-154), it is advised that investors who feel they do not have enough funds should not hesitate to start working towards their goals.

In summary: Clarence Wooten possesses the qualities of courage, imagination, and cleverness.

To ensure a thriving business, it is vital for the founder or founders to develop a productive business plan. This plan will aid them in identifying their strengths and weaknesses, as well as any potential opportunities or threats. It is recommended to avoid reactive problem-solving and instead take preventive measures to prevent fires.