Executive Summary Burts Bees, a company that specializes in bee waxed-based natural skin care products and handmade

crafts was founded in 1984 by Roxanne Quimby and Burt Shavitz in central Maine. They started this venture with a meager investment of $400 and rose to make huge profits. Quimbys ambition to make a steady income at that time was fulfilled when she met Shavitz, a beekeeper in Maine and an ex-photographer for Life and New York magazines. Her talent and passion to start a business paved path to the birth of Burts Bees. Quimby had learned entrepreneurial lessons at a very young age from her Harvard school educated father. It is interesting to notice how Roxanne and the co-founder Burt Shavitz started the concept of natural skin care products just for the extra income and then went on to make it their core product of the company. Quimby visited local fairs after fairs to sell her products and in the first year she was able to make sales of $81,000, which she first thought was unattainable. Burts Bees first big break came in 1989 at a wholesale show in Springfield, Massachusetts; when their teddy bear candle was noticed at an up-scale Manhattan boutique store. The boutique owner ordered more shipments of this candle. Quimby started to hire employees to work in their production range as the demand for their products increased. Her employees were low-skilled moms in Central Maine region. Burts Bees started with product line which included other handmade crafts and beeswax-based products like lip balm. By 1993, Burts Bees had sales representatives across the United States and had nation-wide sales of $3 million. The companys products proved to be successful. Quimby had driven the business of Burts Bees not only to be profitable but also debt free; the reasons for this was that Quimby was strongly averse to going into debt as well as being accountable for anything or anyone. Another interesting factor of the company is its use of natural products. They tried to be unique and environmentally friendly. The founders prove to be efficient business people since they saw the need of the customers and delivered the product demanded by them. As the company witnessed growth, Maine as Burts Bees business location proved undesirable because of high transportation costs involved due to Maine's location which is away from any metropolitan area, high payroll taxes which was an affect of high unemployment in Maine, and lack of expertise in the area. Quimby knew there was a lot of potential in Burts Bees business and in order to liberate it to grow; she decided to move to North Carolina. Quimby knew that by staying in Maine Burts Bees could not grow beyond $3 million in sales. She also knew that there was lot of potential than $3 million to grow in business. Quimby decided to retain Burts Bees ethics of using natural ingredients though she knew manufacturing would be all automated after moving to North Carolina. North Carolina proved promising as Burts Bees could hire marketing and operations expertise and also they had received North Carolina Departments of Commerces support to start their manufacturing facility. Moving to North Carolina meant expanding business together with sharing ownership of Burts Bees with potential talented employees. Quimby had always struggled to share accountability with others and was always comfortable with maintaining sole autonomy. As Quimby sits in the new manufacturing facility at North Carolina, she is questioning her move. Her lack of formal business training begins to haunt her. She has very little time to weigh her options of moving back to Maine or staying in North Carolina.

Situation Analysis Fresh from signing their new lease, Roxanne Quimby and Burt Shavitz lamented on whether they made the best decision to relocate their company, Burts Bees, and its line of home crafted personal care products from rural Maine to North Carolina. Quimby, the archetypical entrepreneur, founded Burts Bees with Shavitz as a means to support their humble, autonomous, lifestyle; and freedom from accountability. However, Burts Bees sales climbed from $81,000 in 1987 to $3,000,000 in 1993, as did Quimbys expectations for the company. Thus, Quimbys decision moment came when she realized that Burts Bees could no longer remain the home grown company with humble roots. Faced with her recent move to North Carolina, Quimby, Shavitz, and Burts Bees must decide how to move forward. The Timmons Model (Exhibit 1) shows Roxanne's company at the decision moment. North Carolina offers a great amount of opportunities and potential for growth. Although she has $3,000,000 in sales, the money to move and start operations; her resources are limited based on the average cost for her industry. As a founder, she is the only one standing in the managerial team with all the decision making responsibility. The model shows that her business is not balanced at this point; her decision has to include the best way to balance opportunity, resources, and team work. Criteria Best for Roxanne: Quimby has a diverse background stemming from her early childhood. Quimby identified autonomy, freedom from accountability, and an aversion to credit or other forms of debt in a lifestyle business she sought. Juxtaposed against this, are her evolution as an entrepreneur and a businesswoman. If Quimby decides to remain in North Carolina will she be happy? Can she maintain the kind of freedom and autonomy she currently enjoys?

Best for Burts Bees: Burts Bees exhibited hockey stick growth from 1987 1993, growing sales 3603%. However, Burts Bees remained a small company with only $3 million in sales. To grow beyond its rural roots and grow as Quimby intends, Burts Bees must reassess its operations and ask itself: What are its current operational costs, where can they be improved, how can they be improved; where can Burts Bees acquire the expertise to accommodate new production processes; and where are the best growth opportunities? Lastly, how can Burts Bees continue to accommodate its core environmental ethos of excluding chemical preservatives and using all-natural ingredients? In order to analyze this case, we decided to focus on what's best for Burt's Bees because it would be in line with Quimby's goal of growing the company. In this we analyzed our alternatives by asking: does it provide autonomy, is there less taxes and shipping, does it have access to expertise, does it maintain Burt's Bees original values, is there growth potential. Exhibit 2 describes the analysis. Alternatives Roxanne Quimby faces three realistic choices. The first is to simply stay in North Carolina. The second is to move back to Maine. The third is to sell the company and moveon. To put these choices in better perspective we will outline each choice using a pros and cons list. Stay in North Carolina Pros: 1. Moving to North Carolina enables Burt's Bees to more easily manufacture their products in an automated fashion. 2. The North Carolina Department of Commerce is very eager to receive Burt's Bees into the North Carolina business environment as opposed to the Department of Commerce in

Maine which seems indifferent to their staying or leaving. The environment is very receptive and the taxes are much lower than those in Maine. 3. Skilled labor is more abundant in North Carolina than in Maine. This is especially important to Burt's Bees if they want to automate their operations and need experienced workers to make sure that their new operations run smoothly. 4. North Carolina relatively central to their operations as a large percentage of the population is within a 12-hour drive. 5. It would be easier to expand because all of the cumulated resources in North Carolina allow the business to grow at a steadier rate. Cons 1. Expanding into North Carolina would require Roxanne to give up a lot of the autonomy that she enjoys. Bringing on capable, experienced people means compensating them accordingly with stock rewards and a say in the direction of the company. Roxanne would no longer be able to pull the trigger on any decision without accountability. 2. Automation would mean that the handmade element of the business would be lost and the loss of a selling point. 3. A new environment can demonstrate a lack of confidence and uncertainty. In Maine, Roxanne was in her element. North Carolina is brand new and is hiding many unpredictable challenges; it's tough to be confident when you don't know what is around the corner. Move back to Maine Pros: 1. If Roxanne decides to move back to Maine, it would be very easy for her to set up shop again since she has been in operation for so long and understands the daily routines.

2. There is the possibility of the State of Maine offering the similar kind of support that North Carolina offered. The governor of Maine contacted Roxanne just a few days before the move to North Carolina after reading about Burt's Bees in Forbes magazine. 3. In the case of moving operations back to Maine, the lack of automation is a "pro" since Burt's Bees would return to making their products the same way they were - by hand. This would retain that selling point and value. 4. The unemployment rate in Maine is high and none of the former employees had found work. Roxanne is sure that she would be able to hire back nearly all of these people, thus shortening the amount of time before they could be back to work. Cons 1. Moving back to Maine would mean a lot of sunk costs. Moving costs, the cost of ending the lease of the facility early, the costs of moving other miscellaneous stuff to North Carolina. 2. Doing business in Maine would still mean high taxes and high shipping costs. 3. Their location in Maine is not central to where their distributors and sales representatives are located. 4. If Roxanne wants Burt's Bees to grow, the company cannot do that in Maine with the lack of expertise, poor location, and high costs. Sell Burt's Bees Pros 1. Roxanne would be free to pursue other interests such as her idea of making handmade goods in India. 2. Burts Bees is facing a lot of attention and the industry and would be an attractive sale for many buyers. Cons

1. Her attachment to Burt's Bees and her desire to personally see it grow would be severed. 2. Roxanne is prematurely giving up on her business. Giving up on her business while in the growth phase can be a possible risk to her financial future. Recommendation Our final recommendation is based off of the preceding criteria that shaped our decision. While there are many pros and cons to each alternative, we decided that we must look at what is best for the business because, in turn, it will become best for Roxanne Quimby. Therefore, we recommend that Burt's Bees stays in North Carolina, negotiate with Burt to buyout the majority of his stocks, and to reduce Roxanne's stock to over 51% so she still has the majority of the business and will maintain status of CEO. Since Burt is a founding member of the company, we recommend reducing him to ~2% stock and buyout the rest for him so he still has money to live off of. According to data given in the case, we would estimate his buyout as approximately $945,000 - $1,260,000 which is a 3-4 times his share of the pre-tax profits ($315,000) as of 1993. The rest of the stock will be used as an incentive to hire a plant manager, and expertise in finance, marketing and sales. This will also help entice investors to the company. This decision will equalize the Timmons model that Burt's Bees is currently facing. The company will increase the team by being able to hire skilled workers whereas in Maine, they were unable to. Burt's Bees will also be able to have access to more resources such as money from investors and knowledge from the expertise of business people from the same industry. Although Burt's Bees will lose out on the handmade novelty of the business, they can still retain the core competency of Burt's Bees which is using natural products such as beeswax and honey.

Appendix: Exhibit 1: Burts Bees towards new balance

Exhibit 2: Autonomy? Less taxes and Shipping? North Carolina Maine Sell X X X X X Access to expertise? Maintain original values? X Growth?