Case Study I-2 • VoIP2.biz, Inc.: Deciding on the Next Steps for a VoIP Supplier 143members thought the firm should be shut down. Milkowski
knew that closing down service would cause major disrup-
tions for his 22 customers. He also did not like this alterna-
tive as it would put his people out of a job. While jobs were
plentiful for skilled engineers, he knew that it would take
longer to find positions for his more senior employees,
each of whom had a sizeable mortgage and ongoing
expenses. These people had joined the firm over the last
year, each taking a substantial cut in salary.
Finally, Milkowski knew that the company could be
sold to another firm. He had been contacted by two firms
who had related businesses in the Indianapolis area. In
order to recommend this course of action, Milkowski knew
that he would have to develop and justify a proposed sale
price. He knew the price should be based on the potential
of future earnings. He also was aware that earlier investors
would like to at least recover their investment to date.
Finally, he knew he should consider in setting the price for
the firm that the 22 contracts already obtained represented
pretty certain cash flow for the life of the contract. He was
certain that most if not all of those contracts would transfer
easily to the surviving company.
As he was trying to decide what option to recom-
mend, his Vice President of Sales and Service, Jim O’Neil,
came into the office. Jim said, “Larry, remember that large
call center we have been trying to land? Well, it
worked...they said they will sign the contract...and it
is for 100 seats, expanding to 300 seats in three locations
over the next year. We have a meeting on Monday to pick
up the signed contract.”