Burt’s Bees Summary:

Burt’s Bees is a company that was founded in 1984 by Roxanne Quimby and Burt
Shavitz in central Maine and produces beeswax-based natural skin careproducts and
handmade crafts. Burt’s Bees started with an investment of four hundred dollars when
Quimby met Shavitz, a beekeeper in Maine and an ex-photographer for Life and New
York magazines.
Quimby’s entrepreneurial lessons were learned at a very young age from her
Harvard school educated father. Quimby started visiting all the local fairs so she could
sell their products. The first year sales were eighty one thousand dollars which seemed
an unattainable amount to Quimby. Burt’s Bee’s first big break came in 1989 at a
wholesale show in Springfield, Massachusetts when one of their new creations, a teddy
bear candle, was noticed at an up-scale Manhattan boutique store. When the boutique
owner ordered more shipments of this candle, Quimby realized their small company
would need to start to hiring employees. There wouldn’t be enough time to produce the
products as the demand for their products increased. The employees she was able to hire
were low-skilled moms who worked for minimum wage.
Burt’sBee’s started with beeswax-based products and a product line of other
handmade crafts. The company’s products proved to be successful. By 1993, Burt’s
Bee’s had sales representatives across the United States and had grown their nation-wide
sales to three million dollars annually. Burt’s Bees was not only profitable but was also
debt free. Quimby was strongly averse to going into debt as well as being accountable
for anything or anyone. Her relationship with Burt was strong as she felt like she could
tame the “wild man” (Spinelli & Adams, 2012). Burt’s Bees tried to be unique and
environmentally friendly by using natural products as much as possible. The efficiency
of the business was simple, meet the need of the customers and deliver the product
demanded by them. As the company grew it became very clear to the founders that
Maine was not the best business location for Burt’s Bees. Some of the problem areas
were high transportation costs involved due to Maine's location which was nowhere close
to any metropolitan area, very high payroll taxes due to high unemployment in Maine,
and a lack of skilled expertise in the area. Quimby knew there was a lot of potential in
Burt’s Bee’s business and in order to liberate it to grow. After some research she decided
to move to North Carolina. If Quimby decided to stay in Maine she knew Burt’s Bees
would not grow beyond three million dollars in annual sales at the same time she knew
there was lot more potential than three million dollars in sales in her company. Quimby
knew that moving to North Carolina would mean more skilled labor, automation and
possibly giving up sole autonomy. She decided to retain Burt’s Bees use of natural
ingredients although she knew manufacturing would be all automated after moving to
North Carolina. She also liked the possibilty of hiring marketing and operations experts
and also having received support from North Carolina Department of Commerce to locate
their manufacturing facility. These were all big changes for Burt’s Bees. Quimby had
always struggled to share accountability with others and now she would have to possiblt
share with potential talented employees. Now Quimby sits in her new manufacturing
facility in North Carolina and is questioning her move. Even though she has been
successful to this point it is her lack of formal business training that begins to haunt her.
She is weighing her options of moving back to Maine or staying in North Carolina. What
should she do?
Situation Analysis:
Upon signing their new lease, Roxanne Quimby and Burt Shavitz were not sure
they made the best decision to relocate their company, Burt’s Bees, and its line of home
crafted personal care products from rural Maine to North Carolina. Quimby, who
founded Burt’s Bees with Shavitz as a way to support their humble and autonomous
lifestyle now had higher expectations for their company. Having watched Burt’s Bees
sales climb from eightyone thousand dollars in 1987 to three million dollars in 1993
Quimby felt compelled to make a change for growth. Thus, Quimby’s decision moment
came when she realized that Burt’s Bees could no longer remain the home grown
company with humble roots. Having made the move to North Carolina, Quimby,
Shavitz, and Burt’s 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 Burt’s Bees:
Burt’s Bees exhibited “hockey stick” growth from 1987-1993, growing sales
3603%. However, Burt’s Bees remained a small company with only $3 million in sales.
To grow beyond its rural roots and grow as Quimby intends, Burt’s 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 Burt’s Bees acquire the expertise to
accommodate new production processes; and where are the best growth opportunities?
Lastly, how can Burt’s 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 ithave 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
move-on. 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.

1.
2.
3. 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.
Skilled labor is more abundant in North Carolina than in Maine.
This is especiallyimportant to Burt's Bees if they want to automate
their operations and need experiencedworkers 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 Carolinaallow the business to grow at a steadier rate.

Cons
1. Expanding into North Carolina would require Roxanne to give up a lot
of theautonomy that she enjoys. Bringing on capable, experienced
people means compensatingthem accordingly with stock rewards and a
say in the direction of the company. Roxannewould 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 andthe 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 manyunpredictable challenges; it's tough to be
confident when you don't know what is aroundthe corner.
Move back to Maine
Pros:
1. If Roxanne decides to move back to Maine, it would be very easy for her to set
upshop again since she has been in operation for so long and understands the daily
routines.
3. There is the possibility of the State of Maine offering the similar kind
of support thatNorth 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.
4. 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 - byhand. This would retain that
selling point and value.
4. The unemployment rate in Maine is high and none of the former
employees had foundwork. Roxanne is sure that she would be able to hire
back nearly all of these people, thusshortening 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 toNorth 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 hand made goods in India.
2. Burt’s 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 besevered.
2. Roxanne is prematurely giving up on her business. Giving up on her
business while inthe 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
RoxanneQuimby. 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,
theycan still retain the core competency of Burt's Bees which is using natural products
such as beeswax and honey.

Appendix:
Exhibit 1:

Burt’s Bee’s towards new balance

Exhibit 2:Autonomy? Less taxesandShipping?Access toexpertise?
Maintainoriginalvalues?Growth?NorthCarolinaX X XMaine X XSell X