Chris Wasserberg is a salesperson for a Fortune 100 firm. He has a bachelor’s degree in marketing and is one of the firm’s best salespeople. Chris will likely become a sales manager if he stays with the firm. However, this is doubtful, because he hopes to start his own business.

Since he was hired seven years ago, Chris has managed to build a nest egg of $160,000. He now is looking for a business that would require no more than $60,000 to $70,000 to get started. The rest would be used for operating capital and to keep him going until the company turns profitable. In the past, Chris has gathered ideas by reading magazines such as Entrepreneur and Inc., which report on new types of businesses.

Last week, Chris read a story that intrigued him. A man on the West Coast has been building custom doghouses out of expensive materials and selling them for $5,000 to $15,000 each. Chris realizes few people can afford to pay this much for a doghouse. Yet most doghouses are not distinctive, and owners simply pay $50 to $150 for basic doghouses. Chris believes a market may exist for doghouses between these two extremes, in the range of $250 to $500. Chris has done the research and believes it would not be too difficult to differentiate his product from the standard doghouse. In particular, he is considering building a house that is slightly larger than the typical one, well insulated, and floored with washable vinyl; he would put the dog’s name above the door and shingle the roof. Additionally, he believes that if the house has the same basic design as the owner’s, it would be more appealing. The two biggest obstacles will be marketing and production—that is, getting people to order houses for their dogs and then building the houses. Chris believes that, with his background, he can handle the marketing, and it should not be too difficult to find someone to handle the construction. Moreover, until the business takes off, he believes he can continue with his sales job.

QUESTIONS

1. Is anything unique about Chris’s idea? Explain.

2. What is the first thing he should do to follow up on his idea? Explain.

3. When this is done, what else should Chris do? Outline a general course of action of him.