Missouri State University
College of Business News
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Congratulations to Dr. Christopher Hines

The work of Dr. Christopher Hines will be featured in the 2017 issue of Mind’s Eye, the university’s research publication.

Here is an excerpt:

How did the global financial crisis of 2008 happen? And how can we make sure nothing like this happens again? The research of Dr. Hines, assistant professor of accounting, may be able to help policymakers determine whether some legislative reforms of the banking industry passed since “the Great Recession” can play a role in stabilizing economies and preventing crises.

His full story can be found on the Mind’s Eye blog and on the Research page.

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Bears Business Brief: Small business specialty retailers can afford marketing research

Ron Coulter
Dr. Ron Coulter

Small businesses are important contributors to economic activity in the U.S. and in southwest Missouri. Small specialty retailers comprise a significant portion of those businesses. Most owner/operators would recognize marketing research as an important business tool to understand the target markets they serve. What is marketing research? It is the collection and use of information to make good business decisions. Sadly, many business retailers do not conduct marketing research because: 1) they think it costs too much; and, 2) they think it takes too much time. In this article, I will describe some quick, inexpensive common-sense techniques for marketing research.

Let’s use an example of a small hobby shop specializing in model railroading supplies. As a specialty retailer, the owner focuses on a limited number of complementary merchandise categories: that is, items for the model train enthusiast. The store is probably small, with a deep but narrow product assortment, and an owner who is possibly a model railroader himself and has a lot of knowledge about the products and a desire to help his customers. As customers likely seek out the store via phone book or the internet, a prime retail location is not necessary. So, how can the owner do quick and inexpensive marketing research?

Observationcan be and is a critical and useful tool, and most small retailers use this form of marketing research without even realizing it. Small specialty retailers must know their customers: who they are, where they’re from, what they do for a living, and what they typically purchase. For instance, our hobby shop owner wants to know what scale of model trains most of his customers shop for and purchase. Do most buy kits to assemble, or materials to construct unusual models not commercially available? If a business owner categorizes the departments or product categories his sales come from, he can make good inventory decisions and provide his customers the products they want. An owner can do this through a simple inventory/sales tracking process.

Another source of customer information comes from something as simple as how payment is made for purchased items. Some specialty retailers take credit in the form of layaways and take cash and personal checks. Owners can gather information about the customer (name, address, phone number, etc.) from these transactions. Then, with minimal effort and investment, the owner has the start of a customer database/mailing list.

What about other customer information? By simple observing, the retailer can make guesses about a customer’s age, marital status or family composition. This information can provide the owner with clues about his customer base. Casual interaction and conversation with customers might provide other clues that help the owner know his market. Another way to get customer information is to ask them to sign up for a newsletter, which the owner can then use to provide coupons, new product information, promote sales, etc. Finally, some retailers use drawings for contest “giveaways” to gain additional customer information.

The key for small specialty retailers is to observe and collect useful facts and information, about their market, that are readily available and inexpensive to obtain. The type and amount of information is limited only by the small business owner’s imagination. To better understand their customer base and to determine what products and services to offer, small specialty retailers can use marketing research — which should lead to customer satisfaction that equates to repeat business and increased sales.

Ron Coulter, Ph.D. is a professor of marketing and marketing department head at Missouri State University. He is also interim department head in the merchandising and fashion design department. His areas of specialization include multivariate marketing research data applications and small business research.

This article appeared in the February 4, 2017 edition of the News-Leader and can be accessed online here.

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Bears Business Brief: Managing cash flow is everything

Dr. Stephen Haggard
Dr. Stephen Haggard

Small business owners often overlook the most important aspect of financial management in their businesses: Cash. Though often overshadowed by the topics of capital budgeting (deciding what long-term assets, like machines and buildings, to purchase) and capital structure (deciding how to finance these purchases), cash management is actually more important from at least one perspective: If you run out of cash to pay your bills, you will go bankrupt. Period.

Accounting numbers do not help small business owners recognize their perilous cash situations, either. Sales are recorded in the books, whether or not cash is received. If a firm makes most of its sales on credit, it can appear to be quite profitable from an accounting perspective but still be cash-poor. Firms with positive net income can and do go bankrupt — when they run out of cash. Firms with chronically negative net income can and do continue to operate. All these firms have to do is convince uninformed investors to buy their newly issued stock or to loan them money. Example: Sears. This scheme is unlikely to work for your small business, however.

So what is a small business owner to do? Spend some time developing what we call a cash budget. Look at the next four quarters and try to estimate your cash inflows and outflows. Use history as your guide, and do not assume you will suddenly develop new fiscal restraint. Use these estimates to figure out what the net change in your cash position will be in each quarter. Now, take your current cash balance and start adding (or subtracting) the changes forecasted in your cash budget. If the quarterly change is positive and your previous cash situation was solid, great! However, if the change in a quarter is negative, determine whether that change will reduce your cash balance below a safe level for your firm. Be conservative when determining how much cash represents a safe level. How often do you have pleasant cash surprises versus unpleasant cash surprises? Sadly, windfalls are rare, but unexpected expenditures are all too common — the delivery truck breaks down, an employee gets injured, or a fire destroys part of your inventory.

What should you do if your forecast shows your cash dropping below a safe level? Visit with your banker. This person has probably already loaned you money and, therefore, has a vested interest in your firm’s survival. If the low cash balance is a result of a temporary situation, like taking on inventory in preparation for a large project or sale, then a short-term loan might be the appropriate fix. If your forecasted cash shortage is caused by the purchase of a long-term asset like a new pizza oven, perhaps a long-term loan would be more appropriate. In either case, preparing the forecast in advance is important because doing so allows you to tackle problems in advance instead of waiting for a cash crisis to arise before taking action.

A native of southwest Missouri, Dr. K. Stephen Haggard is an associate professor of finance and a BancorpSouth endowed research professor. His teaching and research interests include corporate finance and asset pricing.’

This article appeared in the February 2, 2017 edition of the News-Leader and can be accessed online here.

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MBA Students take on experiential learning project with Hotel Nikko

group photo
L to R; Dr. Elizabeth Rozell, Jeanne Ferrari, Elizabeth Sivill, Meghan Wright, Rayanna Anderson, Arthur Guslim, Jordan Lewis, Dean Stephanie Bryant

Four MBA students had the chance to take on a challenging experiential learning project this fall as part of MGT 796.

Arthur Guslim, Jordan Lewis, Elizabeth Sivill and Meghan Wright worked with Hotel Nikko in San Francisco to develop a utilization plan for a 1,200 square foot retail space inside Hotel Nikko. The lease agreement for this space, currently occupied by Starbucks, expires in September 2017 and the management team of Hotel Nikko is exploring options to pursue when the lease expires.

To kick off the consulting project, Dr.  Elizabeth Rozell, Director of the MBA Program, and Elizabeth Sivill, team leader, held a conference call with Jeanne Ferrari, Missouri State University alum and Director of Operations for Hotel Nikko. This discussion set the stage for the semester long project.

To gain firsthand knowledge of Hotel Nikko and the San Francisco area, the students and Rayanna Anderson, Entrepreneurship Coordinator and Community Liaison for the College of Business and project supervisor, traveled to San Francisco in September. During their visit, they toured all aspects of hotel operations and had the chance to interview Jeanne Ferrari and Anna Marie Presutti, Vice President and General Manager of Nikko Hotels Inc., and Hotel Nikko San Francisco. They also collected data in the area around the hotel to gain knowledge of the current market.

Upon returning to campus, the students utilized data provided by Hotel Nikko as well as industry reports from the Small Business Development Center; to compile a 100 plus page report offering five suggestions for the Hotel Nikko retail space.

In December the students returned to San Francisco to present their findings to nine members of the hotel executive board. Accompanying them to their final presentation was Dean of the College of Business Stephanie Bryant, Dr. Elizabeth Rozell and Rayanna Anderson.

After the final presentation, the management team of Hotel Nikko commended the students work. “It was not excellent, it was superb,” states Presutti.

Reflecting on her experience with The Hotel Nikko project, Elizabeth Sivill states, “This project has been the highlight of my master’s program. I have done several projects and internships, but this has been the most challenging and rewarding project I have faced. Even though we were only students, the Hotel Nikko San Francisco management team truly treated us like experts and valued our research and work.”

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Renovation and Expansion Update – Spring 2017

outdoor building shot
Glass Hall, January 2017

Since our last update in September, great strides have been made on the renovation and expansion of Glass Hall.

Robert Gourley Student Success Center

The interior structure of the Robert Gourley Student Success Center is becoming more apparent each day as the internal framing is being completed. In addition, a majority of the mechanical systems, electrical conduit, plumbing and fire suppression piping has been installed. In the coming weeks, loads of roofing materials will be delivered and installed on the already completed base layer of the roof.

On the exterior, framing is in place for the zinc panels that will accent the glass walls on the north and south sides of the building. The framing for the glass walls and the skylight in the atrium will come together later this spring. Once the building is considered “weather tight” drywall and other finishes will be installed.

The new entrance into The Robert Gourley Student Success Center is really taking shape
The new 3 story entrance into The Robert Gourley Student Success Center is really taking shape

Renovation of the existing space

On the inside of Glass Hall, the new vending area has been completed and is open on the north side of the building. Demolition has begun on the 2nd floor to make way for new office configurations.  The SE stairwell has been removed in preparation to connect the existing Glass Hall building with the Student Success Center. Finally, the glass panels have been installed on both the north and south side of the building, so there is a seamless transition between the existing building and the Student Success Center.

Looking ahead

During the summer of 2017, Glass Hall will close for a period of time to allow for the completion of the project. Additional details about the closure will be publicized as they become available.

The remainder of the Terrazzo floors will be installed on the 1st floor, the remaining stairwells and entrances will be renovated, and updates to cabinets and countertops in departmental offices will be made. Additionally the final furniture will be installed in the two buildings. Outside, landscaping and a fire lane will be installed.

Stay in the know

  • To remain up to date on this project, or if you will be visiting Glass Hall this semester, please visit our website.
  • A live video feed is available for a real-time view of the action.
  • You may also access information from the University Planning, Design, and Construction office website.
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