Turning Point: Assessing Business Viability at the Goulet Pen Company

Newlyweds Brian and Rachel Goulet started a small business making pens out of their home. Brain made ballpoint and rollerball pens from kits, and Rachel managed the website. Unfortunately, the company wasn’t making money. Hoping to improve business, Brian attended the D.C. Pen Show. He wanted to learn more about the pen enthusiast community and to see if there was potential to sell them his handmade pens. Brian learned there was a large community of fountain pen enthusiasts willing to spend a lot of money on pens. However, he also learned that this group had absolutely no interest in ballpoints and rollerballs. Brian and Rachel had four options: (1.) give up the business and get regular jobs, (2.) supplement their existing business with pen-related accessories, (3.) switch from making rollerballs to fountain pens, or (4.) switch from manufacturing their own pens to retailing fountain pens made by others. What should Brian and Rachel do and how do these options differ in terms of profit potential and risk?