The Phone Shop: Growth and the Entrepreneur (Part B)

Abstract

In August 2009, Eran Brill, director of The Phone Shop (Pty) Ltd, a consumer electronic goods retailer, was about to renegotiate the lease on his Sandton City store. This event marked three years since he had taken over the store, at a time when it was struggling to make sales and to meet its debt obligations. Since then, he had managed to put The Phone Shop onto a much sounder financial footing, and he had opened two more stores. Looking ahead, he wondered whether he could improve on what he had achieved, in the next three years, particularly now that the recession had started to take hold.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

Resources

Exhibit 1 The Phone Shop Sandton City

Source: Provided by Eran Brill, 18 December 2009.

Figure

Exhibit 2 Advertising Boards Inside The Phone Shop

Source: Provided by Eran Brill, 18 December 2009.

Figure

Exhibit 3a The Phone Shop's Balance Sheet: 2005-2007

Balance Sheet

31 December 2007

31 December 2006

31 December 2005

(R)

(R)

(R)

ASSETS

NON-CURRENT ASSETS

Shop fitting

320 115

355 680

-

CURRENT ASSETS

Inventories

2 582 380

1 062 365

743 580

Bank balances

24 460

16 065

49 320

2 606 840

1 078 430

792 900

TOTAL ASSETS

2 926 955

1 434 110

792 900

EQUITY AND LIABILITIES

CAPITAL AND RESERVES

Issued capital

400

400

400

Accumulated profit/loss

134 415

−557 685

−619 065

Shareholders loan

1 050 000

1 050 000

942 680

1 184 815

492 715

324 015

NON-CURRENT LIABILITIES

Long-term liabilities

355 680

355 680

-

CURRENT LIABILITIES

Accounts payable

1 386 460

585 715

468 885

TOTAL EQUITY AND LIABILITIES

2 926 955

1 434 110

792 900

Source: Information provided by Eran Brill, 18 December 2009.

Exhibit 3b The Phone Shop's Income Statement: 2005-2007

Income Statement

12 months ended 31 Dec 2007

12 months ended 31 Dec 2006

12 months ended 31 Dec 2005

(R)

(R)

(R)

Gross revenue

8 188 680

3 580 525

3 473 495

Cost of sales

5 864 250

1 985 445

2 040 050

Gross profit

2 324 430

1 595 080

1 433 445

Operating costs

1 632 330

1 533 700

1 516 925

(Loss)/profit

692 100

61 380

−83 480

Source: Information provided by Eran Brill, 18 December 2009.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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