Business Research

Researching Company Success

Just as cash flow is the lifeblood of a business, no business is going to go far or succeed at any great length without research. Research can be frustrating, time consuming and a bit mysterious if the entrepreneur does not take steps to prepare themselves to do the research they need.

The first step is to identify what needs to be researched. Do you need information on competitors, customers, industries, the economy, regions, marketing or advertising strategies, intellectual property or demographic data? Before getting started, write down the questions that you are trying to answer with your research.

The next step should be to identify people you can call first to get to the information you are seeking. This is considered primary information. Talking with customers or potential customers is critical in obtaining their feedback on your product or service and should be your first approach. Customers can give more than just mere feedback on what your company is offering. Customers can also give you key information on the industry, why they buy from you over the competition, what prices they are willing to pay, what you can improve, and keep your company on its “toes” by helping you stay competitive.

Beyond customers, call vendors, Chambers of Commerce, other industry leaders or people in your network for information or ideas for your company. If the first person you call does not have the answer to your question, then ask them for a referral to someone they know who could answer your question. Typically, it will take up to five phone calls to find the person with the information. If you find yourself afraid to call others for insight, ask yourself when will you be comfortable doing this?

After you have exhausted your time on the phone, seek out information from the internet. Limit the amount of time you spend on the internet. As great as the internet is, it is an open invitation to procrastination or a black hole of time gone by without finding your answers. When looking at internet sources, seek out information on the author of your source, who they work for, what are their credentials, etc. You want to seek credible information, not information that you think will support your idea.

After you have taken the time to gather information both data driven and anecdotal, you need to review the information with an open mind. Taking industry information and team it up with economic data and customer feedback and see how it applies to your company. Where do you stand; what is the message that the information is painting for you; and what improvements do you see that need to be addressed?

The idea of research is to make sure that your idea, product and/or company are a worthwhile endeavor. This decreases the risk factor you face with your business by giving you solid information on who your customers are, which vendors are best to work with, where to sell your product and so forth.

Market research is not a one-time event. Companies need to engage in this activity regularly, since the business world is constantly evolving and changing at increasing rates. Company leaders, Presidents, CEO, and managers should engage in consistent reading and information seeking. The traditional “executive suite” is an invitation to being left behind. Get out, get engaged, and get the knowledge you need to lead your organization forward.

Law of Attraction

“You are what you believe in” and other well know clichés have gained the attention of business leaders as the Law of Attraction has seen a rise in awareness. Marketing professionals have subconsciously worked with laws of attraction as they implement concepts and strategies to build profits for companies. Business leaders are now seeing a correlation between their attitudes and the health of the company.

The Law of Attraction is a relatively simple concept. It simply implies that you attract toward you what you think about. Your dominate thoughts will manifest and move you. For example, have you driven down the road and fixated on an object in front of you. While your subconscious knew to avoid the object, did you find yourself driving directly for that targeted object?

As a business leader, do you have a target focus? Do you know who you need to attract to your business to achieve great sales, profits or exposure? While running a business of any size, if the leader of that organization does not have focus, direction or a purpose, then the business is not going to attract what it needs to succeed.

Are you a business owner who has been in business for a few years, not seeing great success with the business but enough to get by? Have you developed a negative attitude about the business, or are you skeptical of trying anything new since you have “done that already?” Do you realize that others involved with your business, whether employees, customers, contractors and so forth, take on your same attitude about the business whether you are verbalizing it or not? Being a business leader is a tremendous responsibility and the Law of Attraction applies to your leadership style.

Whether you believe in the Law of Attraction or not, as a leader in the business, you set the tone for all others to subscribe to. If you have a negative outlook, know that no one else who comes in contact with your business is going to have a higher opinion of the business than you. If think the world of your business and believe in it through the up and down cycles, then others around you will too.

In utilizing the law of attraction in your business’ marketing, the Small Business Trends Radio show suggests that you differentiate yourself from the rest. Think and believe of your business as sensational and dare to be different if you can. Being the same as everyone else does not draw the attention of new customers.

Secondly, becoming an expert within a niche in your industry will begin to attract the right types of customers for your business. This may not work for everyone, so analyzing your business within the market is needed. However; creating a niche for the business will attract new customers.

Lastly, capture your customers through entertainment. Speak to them emotionally, as people become less defensive when they have invested their emotions to the situation. Again, dare to be different if you can.

While psychologists and philosophers argue about the validity of the Law of Attraction, there are things you can do to lead your company in positive ways to attract the types of customers that will support your business venture. Ask yourself what you value, where your attitude lies with the company and what you can do different in marketing your company that will have impact on your business. Running a business is hard work, but it can be fun work. What are you going to do for yourself?

Arm Yourself with Knowledge

The internet has provided access to entrepreneurial experts from across the globe. Information on opening, expanding or harvesting your business is readily available. However, entrepreneurs need to be willing to take the time to access the information and learn from what is available.

This may seem like an easy task, yet many business owners do not take advantage of the information available to help their businesses survive, thrive and grow. Knowledge is a competitive advantage, and the business owner who learns about the market place, how to capture that market place and maintain market share will win.

Market research and competitive intelligence is an ongoing research task for any business. The information is critical in maintaining an edge in the market, especially in this time of more aggressive business and global competition. Market research is an ongoing task, because markets are changing very rapidly and the pace of business has increased dramatically in the past few years. The danger for many entrepreneurs comes from feeling overwhelmed and overloaded by the amount of information one can obtain.

To help the entrepreneur with their market research, there are a few key questions to ask. Before you start, ask what decision will be made and how the information will be used. When engaging in internet research, give yourself a time limit for searching the internet. There may be times where you waste more time than you gain by searching for answers on the internet.

Once you begin to engage in research, look at the source being viewed. Who wrote the article, what is their authority or affiliation? How accurate or relevant is the information, what is the intent of the information and how reliable is the information?

While engaging in market research, 50% of the information should be sought from people. Interview or call your competition’s suppliers, any associations for your industry, merchant associations, customers or local reporters. Get a feel for what is happening in your industry, what changes are taking place and what are some of the needs in the industry. Be persistent in contacting and talking with industry informants.

The next 50% of the research can be done on the internet or the library. Begin by using a variety of search engines for the same topic. Some search engines to try are www.google.com, www.yahoo.com, www.ask.com, www.search.msn.com, www.clusty.com and www.vivisimo.com. You can search blogs, local clubs, chambers of commerce, economic development organizations and more. Additionally, a lot of information can be found on GIS Maps. Fort Smith has an excellent GIS department, and they can be found at www.gis.fsark.com. Lastly, if you are in search of regulatory information, you can go to www.Thomas.loc.gov, www.usa.gov or http://asbdc.ualr.edu/.

Other search options include: your competitor’s website, news sites, sites your competitors link to, blogs, patent applications, podcasts, Wikipedia or advanced search engine requests. While the amount of information is overwhelming, entrepreneurs need to equip themselves with information that will help the business win customers. In this information age, anyone can access the information they need for business. The challenge is being disciplined enough to seek out the information that is needed.

African American Business Owners

According to the US Census Bureau, there are 1 million Black owned businesses in the United States. Black businesses account for over $100 billion in annual sales, and African Americans have over $800 billion in expendable income each year. Minority business enterprises (MBEs) are a rapidly growing and increasingly important segment of the U.S. and global economy.

From 1997-2002, the total number of U.S. companies increased by 2 million. According to the Minority Business Development Agency (MBDA), over 50% of this increase was accounted for by minority-owned firms. MBDA notes that minority-owned businesses are diverse, and participate in a wide variety of industries like financial services, health care, construction, transportation, and other services.

However, despite the impressive growth in the number of U.S. minority firms, MBEs must increase their size, scale, and the economic viability of their firms if they are to compete effectively in the global economy. In this day of the global economy, minority businesses must be assertive and innovative competitors who will not fear or retreat from globalization.

In the MBDA report, “Minority Business Enterprises Mastering the Supply Chain: A Perspective,” research suggests that businesses who understand the supply chain concept will be more equipped to bring their businesses to the next economic level. The report, available at www.mbda.gov, demonstrates how minority businesses are able to grow their companies by coping with the challenges of local, national and international competition.

If minority businesses learn about and master the three levels of supply chain management, new opportunities await their businesses. Supply chain management is defined as the “planning and management of all activities involved in sourcing, procurement, conversion and logistics management activities. It also includes the coordination and collaboration with channel partners, which can be supplies, intermediaries, third-party service providers, and customers.”

The three levels of supply chain discipline according to the MBDA include:

• Managing the fundamentals of supply chain, which includes identifying the risks that exist within the supply chain. Once the risk is identified, the business owner may take steps to mitigate those risks.
• Selling the value of a shorter and more reliable supply chain. By reviewing the supply chain, the business owner can see where efficiencies are needed and where partnerships may be formed to decrease costs yet increase turn-around deliverables.
• Transcending today’s supply chain. By acquiring the skills to get ahead of today’s supply chain trends, moving toward higher value positions and markets and staying ahead of the competition, the business owner will see greater results.

The three levels of supply chain discipline lead to business owners to a path of continues study and learning. Staying abreast of the market and trends happening within the market and with technology will lead to business decisions that are relevant. Minority businesses have great opportunities with their businesses, and taking charge of the business is the first step to success.

What’s Your Story?

Stories have played a critical role in society since the beginning of the human race. Without stories, much of our histories would have been lost through the ages. Even today, stories are a critical component of our lives. We hear stories each time the remote control is grabbed, we tell stories about our weekends or our children, we share what is personal to us in stories. Likewise, your business has a story. More amazingly, your business story can be told  in 30 seconds. Whether you have less than a minute or 15 minutes, the business owner needs to identify and be prepared to tell that story.

BJ McCabe, a business coach and storyteller, notes that her job is to teach high level businessmen or woman how to tell stories – business stories. “Each of us has a lifetime of experiences that have helped to inform us of who we are, what matters and shapes how we interact with others. The primary importance a of story (as I see it) is to help us make sense of our experiences.”

Carmine Gallo (in Business Week’s article “Mastering the 30-Second Pitch”) notes that when telling your story you should answer the following four questions:

1. What problem do I solve?
2. What is my service, product or company?
3. How am I different?
4. Why should you care?

What is your business story? What can you teach me about your business so that I will want to ask you for more stories and information? People really do want to hear your story, what is keeping you from sharing it?

Scientific Advertising

Knowing advertising is a discipline of marketing just like sales, did you know that advertising and sales are the same? The difference between the two is the delivery method. However, many businesses approach advertising like they are playing Black Jack.

The art of advertising has been in use since Egyptians began using papyrus to share messages. Today, individuals are bombarded with thousands of advertising messages a day. The challenge in advertising is reaching the exact person who needs your product or service, interest them enough to absorb your message then you need to take action.

Given the countless ways of reaching consumers today, the more you know about your ideal customer, the easier it will be to devise plans to sharing your message with that person (note – get out from behind your desk). Whether you place an ad in the paper, send direct mail, put ads on the internet or blog your message, there are fundamentals to follow in advertising.

Claude C. Hopkins wrote “Scientific Advertising” in 1923, in which he shares advertising fundamentals that continue to hold true even with the advent of new media marketing outlets. Mr. Hopkins’ conclusions were based on experience and testing that he had done throughout his career. His conclusions were not based off trends or opinions, which makes his information necessary for any business.

You can download his free short book “Scientific Advertising” at http://www.backchannelmedia.com/documents/ScientificAdvertising-ClaudeHopkins-1923.pdf .

The Business Plan

For many eager entrepreneurs, the business plan is a dreaded burden. Many see it as an obstacle to starting their business, yet others simply don’t see a reason to take the time to create such a document. Unfortunately, many entrepreneurs simply skip the process of writing a business plan to jump right into their business. While some businesses may survive with this renegade spirit, many more start struggling to survive. The business plan may seem complex to newcomers, however it is an exercise to assist the entrepreneur prepare and plan for the business. Essentially, it is a road map with the route mapped out for the business. It is an opportunity to see if the business is worth the time and investment before the business opens.

While time to do the necessary research, writing and financial planning are essential, the effort is well spent seeing if the idea is feasible. The business plan is intended to help start the process of researching, planning and preparing for operations. However, businesses are ever changing, and entrepreneurs need to incorporate ongoing research and planning into their business in an effort to adapt to changing markets.

The business plan acts as the first sales and marketing piece produced for a business, because the document is needed to communicate to potential investors. This one document allows investors to learn about the business, the market the business wishes to enter, how much capital is needed to start the business and what goals the business intends to reach. The business plan allows an investor to understand the risks involved with the business and what steps are being taken to minimize those risks. Most importantly, investors are looking for indicators for a good return on their investment (ROI) as well as how long it may take for the business to deliver that ROI.

While the business owner should give careful consideration to the whole business plan, the two critical sections others will review first are the executive summary and the pro formas (financial statements). The executive summary should be the last piece written in the business plan. This section summarizes the whole business plan into a few paragraphs. The executive summary should express what the business is, what the product or service is, describe the company vision, summarize the financials and capital needs as well as summarize the goals and management team.

In addition to the executive summary, the pro forma statements are vital to creating a sound business plan. This section allows readers to quickly find how much capital the company is seeking as well as learn about how long it will take the company to earn profits.

The pro forma section includes several documents that should paint a picture of what is needed to keep the company alive. To start, new business owners often need to prepare personal financial statements to include in this section, depending on the type of business, how much capital he/she is seeking and the requirements of the capital source. (Note: Entrepreneurs who are unable to show a sound personal financial background may need to take steps to clean up their finances first before seeking business capital.)

Next, all business plans should engage in research to get a realistic grasp of what sort of startup expenses the business will have. Talking to other business owners in similar industries, researching product expenses and other research should yield realistic figures to use in your projections. With startup expenses in hand, the business plan will need to include a 12-month profit and loss projection (or estimate). This needs to include how much in sales this new company needs to make. After the 12-month projection is complete, the business owner will need to create a profit and loss projection for a 4-5 year period.

After the profit and loss statements, an estimated cash flow statement is the next step. This will allow the business owner to plan for how much money will be needed before the doors open as well as see how much cash is needed to keep the doors open. In conjunction to the cash flow statement is the balance sheet. A balance sheet shows what items of value are owned by the company and how much the company owes in debts. The balance sheet is a key document to show the health of the company at any given moment, and it gives investors a quick glimpse into the “bottom line.”

Some entrepreneurs may include a break-even analysis in their business plans. This tool allows business owners to predict sales volume at their chosen price to recover the total costs in running the business. This calculation allows business owners see how much sales they need in order to run the business with a profit.

The marketing component to the business plan is a key aspect for the business owner to understand. Knowing who the customer is, what the spending habits of the customer are, who are the direct and indirect competitors for those customer dollars and where to find the customers are critical components to help the business plan its entry into the market. The marketing plan is far more comprehensive than simply creating an advertising plan. This section is where your research data will help you make even the smallest decision about your business. Your decisions need to be entirely about your customers, since they are the reason why you have a business.

Business planning can seem overwhelming to the new entrepreneur. However, the time and effort spent on researching and carefully planning a business will allow the business owner to start on a solid foundation. We all know what happened to the three little pigs, starting a business requires the same time and attention. Additional resources to help you with your business plan include the Small Business Development Center (http://asbdc.ualr.edu/), SCORE (www.score.org) or the IEC (www.iecfs.org).