Entrepreneur Research Paper Example | Topics and Well Written Essays - 1750 words

Entrepreneur - Research Paper ExampleSmall opportunities ar the beginning of great enterprises but it is often fraught with pitfalls and challenges (Solovic, 2004). This is precisely what mold coffee bar faced in the 1990s. Fashion Cafe is a themed restaurant and correspond to a Dunn & Bradstreet publication, the failure rate of all restaurants is high and the failure rate of themed restaurants is even higher (Greer, 2008). About half a million businesses start-up each course of instruction and more than this number also fail each year. Reasons could vary across firms and sector but there are certain common mistakes that most entrepreneurs make. 1.2 Fashion Cafe Fashion Cafe, a glitzy theme restaurant, was founded in 1995 by Tommaso Buti and his wife. This was a theme-park restaurant with an animated environment and having a store on the side. This themed restaurant serve burgers and appetizers, was founded by supermodels and fashionistas. They offered and served $20 salad made exclusively for Naomi Campbell (Businesspundit, 2009). Fashion Cafe was in the restaurant business which itself is tough, and the theme restaurants face even tougher challenges. Supermodels like Claudia Schiffer, Naomi Campbell, Elle Macpherson, and Christy Turlington joined detention with Tommaso Buti and the brain child was Fashion Cafe (Businesspundit, 2009). The vision behind the themed restaurant was to market food and sex as used to be with night clubs and restaurants. This eon the owners planned it by way of offering burgers and chips to suit the body-conscious crowd. The theme was to use the girls as enticement and the entrepreneur thought that it would be easy to raise the currency to foot their bill. Investors were easily attracted because each felt they owned the models. Because of the stars around the venture gained publicity on CNN and BBC. Buti raised $3 million within a dead period and run only three restaurants in New York, London and New Orleans (Berkman, 2011) . Inside the restaurant lights flash, movies play and then there was a display of dresses, shoes and coats worn by the owners the supermodels (Reichl, 1995). These could be bought at the store which was on the side. While the menu card was seven-pages the menus on the card demonstrated scotch meals to suit slim figures and models. At the same time, they planned to sell goods such as dresses and coats through the store in the side. Fashion Cafe was over-franchised and has been impeach of distraction (Businesspundit, 2009). 1.3 Situation over time Staff paychecks were bouncing and they struggled to hire good people. They reached a state when suppliers refused to deliver on credit (Berkman, 2011). The entrepreneur siphoned out capital to create assets for himself. The restaurant spent too much on refurbishing instead of providing cash for day-today running expenses (Willock, 1998). Super models that had invested and had been attached to the chain started resigning one after the oth er. The Cafe did not allow the stakeholders access to the accounts which goes against the norms of any company. The CEO Tommaso Buti has been accused of stealing funds from the company and diverting the corporate assets for personal benefits (Kelly, 1999). They have also been accused of defrauding the investors and the owners have been charged of wire fraud, conspiracy, money laundering and transporting of stolen property. The project had huge amount of investments with good financial backing but no business planning. It disagreeable down three years after it was opened. 2. Reasons for failure 2.1