Reference no: EM133400227

Mini Case Study BP Cigar Lounge

B.P. Battles comes from a strong religious background. He was taught from a young age him that smoking or drinking alcohol was not allowed. He was instructed to live life as pure as possible and to always remember that his life should be a positive example for others. In his teens, while hanging out at a park with friends, Battles saw his grandfather smoking a pipe. When he was alone with his grandfather, he asked if grandmother knew that he was smoking. He was promptly told to mind his own business. But something about the aroma from that pipe remained in Battles' mind. Battles grew up in Fort Worth and went to high school at Trimble Tech. Directly from college he moved to Houston and worked for the Harris County Appraisal District (HCAD) as a business personal property and industrial appraiser. After being recruited he took a job with Burr Wolff Tax Solutions (until they filed for bankruptcy in December 2006) where his last position was a senior compliance analyst. Battles eventually made his way back to Fort Worth where he joined TD Ameritrade as a broker analyst and a senior compliance analyst. After departing the corporate world, Battles took some time and traveled to several cities in the United States. During his travels he visited several cigar bars. "The cigar bars really began to pique my interest", said Battles. "I found them to be relaxing and I wanted to know more about them. So, every city that I visited I looked for a cigar bar. Until then, I'd never smoked cigars. I wanted to learn about cigars and the cigar culture, the flavors and pairings with alcohol. I spent a lot of time researching and trying to understand the business." He found a mentor in Mike Peacock of Michaels' Tobacco in Euless. "When I sat with Mike to discuss the pros and cons of the cigar bar business, the cons were so great that the pros didn't matter, at first," said Battles. He decided he wanted no part of it. But after comparing all of his notes against the cons, he just couldn't talk himself out of not moving forward in that line of business. Eventually he, along with two partners, opened a cigar bar in Arlington called The Pressure. But after conflicts on the vision for the business, he left the partnership and decided to go solo. "I knew that it was time for a change. I begin looking for a location to open up my own cigar bar," said Battles. It was then that Battles had a dream. "It was a simple dream, yet it was unforgettable. It was a dream of a brick wall." At first, he wasn't sure what the dream meant, until he was looking for a location to start his business and looked through the window of a vacant space at 1708 8th Avenue. The first thing he saw was a brick wall. "That was all the confirmation that I needed. I knew that God was telling me that this was the place." Opened in April 2016, The Boardroom Whisky and Cigar Lounge is the only African American owned cigar bar in the Fort Worth area, and one of a few in the state of Texas. "My vision for The Boardroom Whisky and Cigar Lounge is to be a place like Cheers, the 1980s television sitcom, a place where everybody knows your name", Battles said. "We want it to be a place where men and women from different walks of life can come and relax, enjoy their favorite cigar and even try new flavors as they connect with others." He wanted people to experience the feeling he had when he first visited cigar bars. "I want to recreate a peaceful and relaxing atmosphere that everyone can enjoy." Frequent patron, Myran Strider, stated "This is a spot that my husband and I enjoy quite often. We come here to just kick back and relax in the atmosphere. The owner is visible and always greets us as we enter the establishment. We love the environment...they are friendly and there are always good conversations going." Patron Stuart Balcom says, "This is my favorite place." Asked if there was any internal conflict with his spiritual upbringing and having a business that serves and sells cigars and alcohol. Battles said, "At the beginning, I had a little conflict, but I came to realize that this place in some ways is like a church. It's a haven. A place where people can come and be free. For a few hours they can come and forget about their worries. And we do have the occasional minister who stops by to relax as well. We've even had a few bible study sessions at The Boardroom. For Battles it seems that life is coming full circle. He's in the right business, he has peace within and he says he never could have imagined having a business a few blocks from where he was raised as a child and near his high school alma mater. Battles believes that he gets his entrepreneurial spirit from his grandfather, Gus Battles, who made a name for himself years ago building churches on the southside of Fort Worth. But that's not all that he got from his grandfather. He has two of his granddad's hand carved pipes.

Your assigned case study questions are detailed.

Question 1- BP visited cigar lounges for years before he decided to develop his own and then it took years more for him to start the actual cigar lounge business. If this were your business, would you have had the stamina to pursue this idea for so many years? What characteristics are important for an entrepreneurial leader like BP?

Question 2- BP estimates he is 18 months behind his initial predictions for the business. In order to create enough runway, he even cashed out his retirement savings. What does it mean to "run out of runway" in entrepreneurial terms? When you hear this breakeven timeline and financing strategy, what is your major concern for the business?

Question 3- The disappearing partner wasted BP's time, efforts, and even money. How could such problems be avoided? What would you specifically look for in a partnership, beyond the formal paperwork?