Planning for the Harvest: Small Business Management - Essay Example

In addition to the customers increasing their power to bargain, the retailers stocking the sunglasses also required better terms that reduced the profit margins further.

This shows that the short-run period where supernormal profits were being enjoyed is over, setting the stage for normal profits.2. The buyer retained Ed as a consultant for the following reason. The buyer wanted to purchase the business to set the pace for further acquisition of sunglass companies. By retaining Ed as a consultant, the buyer wanted to tap the expertise and experience that Ed has had since he was the one managing the family business. This means that the buyer did not want to start from scratch learning how the business was being run.

He wanted to learn from Ed himself who knew. The buyer also wanted Ed around so that he could seek his advice in case the buyer encountered problems after purchasing the business.3. There is no problem with having the son-in-law of Bonneau as the new chief operating officer of the sunglass company after selling to the new buyer for the following reason.