Eillen Dorsey and Walter Hill, Jr. are successful entrepreneurs today because they learned early in life the importance of personal financial planning. Eillen, the youngest of eight children, was reared in Harford County, Maryland. Her parents taught her that if she dreamed long enough—and hard enough—and was committed to a dream, she would make it become real. But that meant saving her money for college and then for investment.
Dorsey attended Catonsville and Essex Community Colleges, where she began building a network of people who worked in corporate America and in local government agencies. She developed a particularly strong relationship with Walter Hill, Jr., who had attended Morgan State University and the University of Maryland—and also knew the value of savings.
Dorsey and Hill decided to use their savings to start a business in the Baltimore, Maryland, area when they noted that almost every corporation producing machinery had to buy some type of electrical components. They also knew that many of those companies were interested in doing business with a minority firm, so they saw an opportunity to become entrepreneurs.
Dorsey had been a salesperson for Technico, an electrical component company, and was familiar with firms that wanted electrical components. Hill, who was working at Westinghouse, also knew people in the industry. So they quit their respective companies to form ECS Technologies.
Each partner contributed $5,000 to get the business started, and they secured a $35,000 loan by using their homes as equity. Their homes thus became an important Page 367investment vehicle as well. The partners had already won a contract before they applied for the loan, making it easier for the lender to grant their request. Because the partners had invested their own money and assets, the banks were willing to give them a line of credit totaling $200,000.
Questions
1) Evaluate the way Dorsey and Hill did their financial planning.
2) Do you think their early personal financial planning influenced their professional financial planning? Explain.
3) To what extent do you think the two entrepreneurs will succeed in their venture? Explain.