Getting from A to B: A Case Study of HE Delivers Unlimited, Inc (2010)

CASE DESCRIPTION primary subject matter of this case is entrepreneurship. Secondary issues examined include female leadership, the impact of FICO credit scores on interest rates, and for-profit versus non-profit organizational status. case has a difficulty level of four and is appropriate for senior level courses. case is designed to be taught in one to two class hours and is expected to require two hours of outside preparation by students. CASE SYNOPSIS need that money No I needed that money yesterday, stated Lisa Smith. Lisa Smith, founder, president, and CEO of HE Delivers Unlimited, Inc. is struggling to make ends meet. company is beginning its third year of operations and is experiencing financial difficulties. Smith is faced with trying to turn around the company and eradicate its financial woes. Its largest customer is delinquent in submitting payments; and without the timely receipt of these payments, the company does not have enough cash to maintain operations. Smith is attempting to operate the company from owner financed funds and cash from operations. Due to personal financial circumstances in the past, Smith is trying to improve her credit score and does not want to incur additional debt. Accordingly, she has not obtained any external funding and has used cash to make major asset purchases. Furthermore, Smith began operating her company without a business plan. Without timely prepared financial statements, she does not know the financial position of the company and is unable to make sound financial business decisions. Smith has dreams of expanding the company. However, she knows that this will not be possible unless she can improve the company's financial position. INTRODUCTION Traffic came to a sudden halt. Oh, no, not an accident on the interstate Lisa Smith shouted. can't be late We have a new driver starting today, and it's Thursday. I can't be late getting to the office today. Smith inhaled and exhaled slowly, and thought about what she could do while stuck in traffic. She picked up her cell phone and called the accounting manager at Simmeons to find out about the status of their payment. hope they can pay us I need that money No, I needed that money yesterday, Smith exclaimed. Smith managed to make it to the office before the new driver arrived. Before things got hectic, she got online to review the company's bank balance. As she sat at her desk and stared at her bank balance, she thanked God that Simmeons would be able to pay them That check gave her the funds she needed to pay her employees. Smith was the founder, president and CEO of HE Delivers Unlimited, Inc. (hereafter referred to as HE Delivers), a transportation company that was beginning its third year of operations. Every other week Smith processed payroll for her employees. company was having cash flow problems and meeting financial obligations had become difficult. finances of the company had become a great concern to Smith. Smith had visions of expanding the company into additional markets. She knew, however, that before she could do so, she had to eradicate the company's financial problems. BACKGROUND INFORMATION HE Delivers was located in Maryland and serviced Anne Arundel county, Baltimore city, Baltimore county and Howard county. company concentrated on four areas of transportation: (1) Home-to-Work, (2) Home-to-School, (3) Government Agencies, and (4) General Public. company did not solicit street sales but offered transportation through pre-scheduled reservations. mission of HE Delivers included providing the very best in transportation to all who needed an alternative way of travel while being a messenger and deliverer of God's word that He Delivers. The objectives of the company included the following: * To provide a safe, licensed transportation service at reasonable prices; * To become a trusted, viable transportation source to the people and businesses of the State of Maryland; * To contract with area service agencies, corporations, daycares, disadvantaged and disabled persons, preschools, and recreational services that do not provide transportation; and * To create jobs for people looking for part-time or full-time work. …