Joe, a retired vet, and alumni of Cal State University, founded this company Designer Drains. While seeking full time employment as a civilian, he started tinkering in plumbing. He cultivated many clients and started selling parts and distributed materials to others in the industry. After five years he became a “master of his trade” between his knowledge and his reputation. He saw a need in the market for some creativity and design, hence the birth of Designer Drains. He has since hired several individuals to help maintain his focus and his vision. The motto of the firm is “Under promise and over perform.” While Joe began the firm predominately from inside his truck he has also expanded to an online presence at joeplumbingsupply.com. The reason he has reached out to you for financial assistance is he is currently facing some issues. (1) He wants you to investigate the future outlook for the industry. (2) He is concerned about tariffs and trade issues. While he prides himself on being a veteran and providing 100% American Stainless Steel, would he be better off investigating other markets. (3) Joe is a very dynamic and interesting guy. He always wanted to open a store in California. He is curious what new issues and challenges he would have to face if this were to be the direction of his business. (4) Joe currently employs a staff of people and outside contracts others. He is having some labor and union issues. (5) Joe wants to “give back” to society and seeks to contribute to charities. Do you think that is a good idea, what % should be given and will that “social awareness” improve his sales and reputation or merely harm his profit? What should he do? Joe seeks your counsel and advice on the following issues. Read through or research to help him resolve each of these issues.

Company Mission

Joe currently employs 5 people at the firm, including himself. Joe is still working long hours because he oversees all operations of the business. It is like his “baby.” He wants to maintain all quality control of the parts and labor. Joe, as stated earlier,

started working as a plumber in the “trenches” literally and has now moved to being more responsible for the sales and production of his product line. The product that Joe has been successfully selling is decorative drain covers made from 100% stainless steel. He has provided online numerous sizes and designs. He has been reviewed by numerous publications and received compliments from many customers in the industry.       Joe is of the opinion that without clean water society would crumble. He is passionate about every order and relationships with every client.

Each piece is made from USA stainless steel and comes in a variety of sizes and finishes.

Joe is unsure what it means to have a tariff on steel? Will this impact his industry and business? Provide some research from the Internet explaining how a tariff may or may not impact his business. Include information about the timing of this/these events.

Staff and Personnel

As stated previously, Joe wants to maintain full control of his operation. Therefore, if anyone is not available to be at work, whether they are on vacation or sick he wants to be able to “fill their shoes” and do the job.

From the days in the truck, Joe has realized he cannot do this all alone. He has since hired several people to help him grow the business. He currently employs an Account Manager, Michael, who oversees the payment and day-to-day finances of the firm. Michael also maintains the inventory of the products and tracks trends in the industry.

Rick joined the firm to prepare the financial statements and to work with the accountants to prepare the tax records. He is the brother of Michael and he manages the returns and defects department. When there is a production error he investigates it. He has an attention for detail and responds to all the FAQ’s for the website.

Dan is the web designer and has handled all the IT problems. He is also in charge of customer relations. When a customer returns a product he reaches out to the customer and makes sure they get a replacement or are satisfied.

Steve is our purchasing agent who retains a relationship with our suppliers and warehouse specialist.

Is there any position that could be eliminated? Is there a position that could be added to the staff? Is there any other information you would request to better answer these questions?

Environmental Scan

Joe, like many small business owners, has come a long way from sleeping in the truck. He is not sure what the future of the plumbing or the manufacturing industry has in store for him. Investigate in the www.bls.gov website to see the Occupational Outlook Handbook to see plumbing and pipefitters employment future. Should and would this impact Joe’s decision to grow or stay in business. Give one suggestion on how Joe could grow or change the business in the future.

Brick and Mortar

Joe has been able to supply his products to market when an order has been received and payment has been made. Similar to other online businesses, when a customer demands a Drain Cover then Joe reaches out to the supplier and has the specifications and the design cut. Once a customer orders, then he/she is put on a mailing order and receives emails and information about other products and supplies similar to the one ordered. At this time Joe has not been in the business of creating paper catalogs. He thinks that is a waste of money and time. In addition, Joe has rarely found that customers repeat orders. Meaning that once they order a decorative drain cover the product lasts for a considerable amount of time and does not need to be changed. Unfortunately, this is not a seasonal item that requires a turnover or change.

Joe has often felt that given his dynamic personality that he should be able to sell more items if people spent more time with him. He wants to open a store which will require additional expenses he does not currently face given that he maintains only an online presence. What would be some of the additional expenses associated with the opening of a store? Will this increase his sales? Would you suggest to Joe that he open a store? Where would you open a store?

Delivery Problems

No business is without problems. Joe comes to you given your experience in an Intro to Finance class to become educated on his production supply.

Joe ships out his inventory of products with a third party trucking company. He chose early on that he does not want to maintain inventory of trucks, insurance, registration and salary of drivers. Therefore, he hires a company to ship the Designer Drain covers to the customer. He has hires the Teammates Union which has an established route of transporting items all over the country and has numerous size trucks and drivers available all day and night. Joe signed a contract with the Teammates Union to employ their drivers and compensate them accordingly. As stated earlier, Joe is a proud American and Unions have history in America The Teammates Union has a contract, which determines their rate and the compensation including benefits for their drivers. These contracts are negotiated with the Union.

Unfortunately, the Teammates have been very unhappy with their recent contract. They threaten to strike and not work . Joe could hire individual drivers but the Teammates will not be happy with that and might sue Joe or worse.

Investigate the history of Unions in America and show the data about the change in Union membership over the last 50 years in industry. Investigate the trucking industry and report what percentage of trucking transportation is currently unionized. What are some other options for Joe to transport his Designer Drains?

Charitable Contributions

Joe has heard that many other companies have improved their reputation and sales by contributing a portion of their profits to charitable organizations. Give an example of one company that has been successful donating a portion of their profits to outside charities.

Would you recommend that Joe contribute to this initiative?    If you decided to make a contribution, what organization would you contribute to? Have you examined their financial statement to see what are the administrative costs? Compare two charitable companies that contribute for similar causes (for example two medical ( i.e. Susan Korman Breast Cancer and the American Cancer Society, or two developmental charities Habitat for Humanity and Good360) Look at what percentage of their contributions are received by the desired recipient. Would this impact the charity you suggest for Joe? Provide the website and print out the information you relied upon.

Answer the questions for each section in Microsoft Word. Please label each section accordingly and be sure to provide all the supporting data from the internet that helped you to critically think each of the problems posed to Joe. Many answers are not “right or wrong” but are based on the analysis and thought provided. Use the rubric to help you answer the questions, as that will determine your grade. All answers must be typed, spell checked and proof read.

** Minimum wage, state sales tax on the portal, online financial issues, healthcare costs (Obama care if not providing)