Sten-Tel Inc

Babson Professor Stephen Spinelli, Case Director

Jason Cannon, Case Writer

Arthur M. Blank Center for Entrepreneurship

© Babson College, 1998.

Abstract

Sten-Tel is a family owned business that provides transcription services for lawyers, insurance and medical companies and various government agencies such as the police. The founder has developed new transcribing technology that dramatically reduces labor and overhead costs while increasing customer satisfaction. The automated transcribing system allows clients to dial into the Sten-Tel network whenever they need to record important conversations and to check on the status of the transcription via an automated telephone system or on the Internet. The R & D money to create this new system was provided by angel financing. Later, the entrepreneur's father provides start-up financing for the company. Both investors are becoming anxious to recover their loans. Sten-Tel's owner decides that the best way to capitalize on his invention and to repay his debt is to franchise the new automated system across the country and eventually internationally. Marketing efforts begin and financial projections for the expected results are provided in the case.

Location of the company: Western Massachusetts

Years spanned by the case: 1994 through 1998

Industry segment: Communications

Stage of the company: Start-up and early growth

Age of the entrepreneur: 34

Key Words: Franchise, entrepreneurship, alliances, family-owned business, growth, angel financing

DVD

A 44 minute DVD is available for this case. The principal from the case, George Catuogno, answers questions in a Babson class. Please place video orders through ecch.

Teaching Notes

A six page case teaching package, written by Steve Spinelli, is available for this case. The teaching package includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into a course.