MT209 Unit 9 Seminar Reflection Example

Cash Was First on My List: A Unit 9 Seminar Reflection on the Risks a Small Shop Postpones

[Student Name]

Purdue University Global

MT209: Small Business Management

Unit 9 Seminar Reflection

[Instructor Name]

[Date]

Northfork Print and Stitch, its people and every figure are composite and illustrative; insurance terms described are general and vary by policy and state; the sources cited are real.

My Ranking Before the Session

By Unit 8 I had a confident list of the shop's risks. The September cash trough came first, since my Unit 5 numbers left only about a fifth of the credit line unused at the low point. Supplier shortages came second, after the missed homecoming order in Unit 7. The automatic press came a distant third; it was old but reliable, and the owner had kept it running for five years with belts and squeegees from the supply catalog.

What the Session Raised

The instructor began with a question: what would happen if the shop's most important asset disappeared for three weeks in September? I answered that the cash trough would get worse. He then asked which asset I meant, and I realized I had not thought about it.

He explained that business interruption coverage generally pays for lost income after physical damage from a covered cause, such as a fire, but that a mechanical breakdown of a machine usually needs separate equipment breakdown coverage. The shop's policy, as the owner described it to me in Unit 3, includes property and general liability but no equipment breakdown endorsement. If the press's main drive failed in September, the repair might take two or three weeks while a part shipped, and the shop could lose or delay about [$60,000] in orders. Federal small business guidance (U.S. Small Business Administration, 2024) lists business interruption and commercial property among the policies small firms commonly need, and notes that coverage must be matched to the business's own risks, which the shop's policy had never been.

The Knowledge Nobody Has Written Down

The second part of the session was about records and succession, and it changed my ranking again. A classmate who works at a bakery said that when their head baker left, nobody could make the cinnamon rolls for a month. I thought immediately of Hector, the shop's senior press operator, who mixes every custom school color by eye and keeps the press settings for each job in his head.

Nonaka (1994) separated knowledge a company can put on paper from the tacit kind that lives in a person's hands and judgment and resists being written down. Hector's color mixing is tacit knowledge of the most valuable kind, and the shop has done nothing to make any of it explicit. If he left in August, the shop would lose not only an operator but the ability to match a school's maroon to last year's uniforms.

The owner is in a similar position. She is the only person who signs checks, the only person with the bank's login and the only person who knows the pricing rules. Sharma et al. (2003) found that succession planning in family firms is shaped by whether the incumbent wants it and whether a capable successor exists, and that planning often does not happen at all. Northfork's owner is not planning to leave, but an illness or an accident in September would stop payroll and purchasing until someone else could sign.

The press and two people's memories are each a single point of failure, and I had ranked none of them.

My Ranking After the Session

My new list puts the single automatic press first, because a breakdown in the fall would cost more than any cash shortfall and is not insured. Hector's undocumented color formulas and settings come second, because they cannot be replaced quickly at any price. The owner as the only signer comes third. The cash trough falls to fourth. It is just as real as before, but it is visible, planned for and partly covered by the credit line, while the first three would arrive without warning. Supplier shortages fall to fifth, since the Unit 7 split purchasing plan addresses them.

What I Would Change

I would recommend three steps in Unit 10. First, price an equipment breakdown endorsement for the press before next summer. Second, ask Hector to record each school color's formula and each job's press settings over the slow months, paid as project time, with a binder kept at the shop. Third, add a second authorized signer on the bank account, probably the owner's spouse, who already keeps the books.

Writing this, I also noticed that all three new risks share a cause with the problems in earlier units: the shop depends on a few people and one machine because it has never had slack. The cash, hiring and supplier changes I recommended earlier would create some of that slack, which may be the best protection of all.

The question I take into the last unit is how to rank these steps against the cash and hiring changes from earlier units, since the owner can only do so much in one year.

References

Nonaka, I. (1994). A dynamic theory of organizational knowledge creation. Organization Science, 5(1), 14-37. https://doi.org/10.1287/orsc.5.1.14

Sharma, P., Chrisman, J. J., & Chua, J. H. (2003). Succession planning as planned behavior: Some empirical results. Family Business Review, 16(1), 1-15. https://doi.org/10.1111/j.1741-6248.2003.00001.x

U.S. Small Business Administration. (2024). Get business insurance. https://www.sba.gov/business-guide/launch-your-business/get-business-insurance