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    Showing posts with label Business Planning. Show all posts
    Showing posts with label Business Planning. Show all posts

    Thursday, October 18, 2007

    Zip Code Demographics Based on US Census Data

    Developing a marketing plan for a business is much easier when you have access to quality market research data. But not all start up businesses can afford to have primary market research done specifically for them. The US Census Bureau has plenty of information available (paid for by the US taxpayers) but it can be tedious to dig through their web site and ferret out exactly what you need.

    ZIPskinny is a new web site that takes US Census data and organizes it by the zip codes that you specify. Demographic information is summarized conveniently as shown below.

    In addition, key demographic information is displayed in colorful charts for easy visual interpretation. And you can easily compare the demographic data for up to 20 zip codes at one time.

    The product is currently in beta but seems to work quite well. There are disclaimers on the site explaining the limitations of the data:

    "Additionally, we wish to point out that there are certain important limitations to the data presented here. Because many of the measurements are based on sample data, certain results may be skewed in some cases, especially when the ZIP code area in question represents a very small sample. Please bear in mind that ZIP codes are not uniform population units. They were invented for mail delivery, not population comparisons."

    But some data is always better than no data! So this can be an excellent starting point for developing your business marketing plan.

    Monday, October 1, 2007

    Reliable Market Research - Ask the Right Questions

    Market research is invaluable in starting a small business. But when you can't find published sources of the research you need, you will probably have to engage a market research firm to conduct primary research. When interviewing market research companies, it is a good idea to ask the following questions:

    1) Have you worked with businesses like mine before? Market research firms have many different clients but they often specialize in specific industries or client size. Check their list of references for other companies in your industry that are about your size. Don't be afraid to ask for a nondisclosure agreement if the firm has worked for your competitors in the past.

    2) What methodology will you use for the research and why will that work for reaching my target market? Online surveys, phone interviews and face-to-face research are the three most popular methods. Online surveys, while cheapest, are usually a good choice when collecting very simple information (demographics, shopping patterns, income level). If your business involves a new product, service or process, face-to-face or phone interviews are a better choice as more in-depth follow-up questions (tailored to the interviewee's responses) can be used.

    3) Who owns the research after it is collected? Usually, the person paying owns the research, but make sure to get this in writing before starting.

    4) How often will I receive progress reports? You want to ensure the firm is progressing towards the end goal and obtaining useful results. If they balk at this question, look for another firm!

    5) Are general surveys being conducted for the research I'm seeking? Often firms perform surveys on behalf of a number of clients at the same time who are seeking answers to similar questions. Participating in one of these surveys can be a great way to save money.

    6) Will the respondents be people who have taken a lot of surveys previously? Ideally, you want people completing your surveys who are not "professional survey takers". After taking numerous surveys, many people become adept at providing answers they think the company conducting the survey wants to hear.

    Don't forget to call some of the clients who have used the firm before to get feedback on their experience. By doing your homework up front and asking the right questions, you should land with a quality research firm who will produce the quality market research that you need.

    Related Posts:
    Performing a SWOT Analysis for Small Business
    Free Business Plan Templates

    Free Business Plan Templates

    Many small business courses require students to complete a business plan as a portion of their grade. Many students struggle with how to begin their plan and the components that it should include.

    You can obtain free business plan templates from bplans.com. There are hundreds of free plans for restaurants, retail stores, beauty salons and almost anything else you can dream up (even aircraft rental instruction). Although these plans will require modification to meet the requirements of your instructor, they provide a great starting point to get up and running on your plan quickly.

    The site is sponsored by Palo Alto software the company that makes Business Plan Prosoftware. The software includes many other starter business plans as well as tools not available on the bplans.com site. By providing a sample of free plans their strategy is to convince you to improve your plan by using Business Plan Pro software.

    Related Posts:
    Performing a SWOT Analysis for Small Business
    Top Ten Mistakes of Prospective Franchisees

    Tuesday, September 25, 2007

    Top Ten Mistakes of Prospective Franchisees

    Evaluating a franchise opportunity is a tricky business. Roger C. Rule, writing for Inc. Magazine provides this list of the top ten mistakes that people make when exploring franchise offerings:

    1. Not reading, understanding or asking questions about the disclosure document.
    2. Not understanding or having an inaccurate or incomplete interpretation of the franchise agreement and other legal documents to be signed.
    3. Not seeking sound legal advice.
    4. Not verifying oral representations of the franchisor.
    5. Not contacting enough current franchisees.
    6. Not confirming the reasons for failed franchises.
    7. Not having enough working capital.
    8. Not recognizing the need for financing, not knowing how to make a proper loan request and not developing a true and accurate financial statement.
    9. Not meeting the franchisor's key management personnel at their headquarters and the field representative assigned to your territory.
    10. Not analyzing your market in advance.

    Be sure to check out the full explanations of the items in this list at the Inc. Magazine web site.

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    Low Cost Franchises

    Wednesday, September 19, 2007

    Performing a SWOT Analysis for a Small Business

    A key step in risk management that assesses a firm's strengths, weaknesses, market opportunities, and threats is a SWOT analysis. Although this is a relatively simple process, many problems can be anticipated and avoided by identifying them up front. A SWOT analysis is usually a key component to a small business plan. A SWOT analysis is normally represented visually in a four box grid as shown below:

    The SWOT analysis starts by honestly assessing the internal strengths and weaknesses in a firm. The next step is identifying opportunities and threats that may affect the organization from external forces such as the market space occupied by the company, the overall business climate and societal forces. SWOT analysis is best preformed by a team of individuals that have diverse personal attributes (gender, age, income level, etc.). Gender diversity is especially important since woman and men tend to perceive threats and opportunities very differently.

    The end product of a SWOT analysis is to identify and examine significant factors, both positive and negative, that might affect the small business being launched or the situation being analyzed. The SWOT analysis is an excellent way to document the thought process that was used in arriving at a business strategy and developing marketing goals and objectives.

    In each of the four SWOT categories, you may consider organizing the attributes by logical business function (marketing, manufacturing, supply chain, financing, etc.).

    Strengths usually describe things that the company excels at doing. All strengths listed should support a competitive advantage that the corporation has over its rivals. These can be tangible (fast delivery of products to customers) or intangible (excellent customer service promotes very high customer satisfaction). As these are internal attributes they should all be within the company’s control. Ask questions such as:

    • What does the company do well?
    • What resources (physical and personnel) does the company possess?
    • What advantages does the company have over its rivals?

    Do not forget to include key strengths that the people in the organization possess which includes things such as their experience, knowledge, educational background, business connections, and job skills. Tangible assets such as plant capacity, state of the art equipment and facilities, strong supply chains, available capital (or access to credit), loyal customers, patents, copyrights and superior information systems.

    Weaknesses are factors that the company controls that impair its ability to compete with other firms. Weaknesses are any areas in which you need to improve to maintain a competitive edge in your market. Ask questions such as:

    • Which departments need to be improved?
    • What resources does the company lack?
    • What skill sets do the employees lack that competing firm’s workforces have?
    • What services does the company fail to offer?

    Opportunities are the external factors that will allow your business to succeed against its rivals. Since these are external factors, they may not be under control of the company. Ask questions such as:

    • What opportunities for new products or services exist in your market?
    • Are new markets available that could provide opportunities for growth?
    • Have new technologies been developed that will allow us to compete more effectively?
    • Have consumer lifestyles, wants and desires shifted?
    • Are the target customers economically healthy?
    • Do previously resolved internal problems give the company a competitive edge?

    Usually, opportunities reflect the areas where you can excel by changing the company’s marketing strategy. Should new products be launched? Should existing products be promoted to new customer groups? If possible, identify the time frame for each opportunity. Is it something the company must capitalize on by a certain date or will the opportunity last indefinitely?

    Threats are factors beyond the control of the company that reduces its competitiveness in the marketplace, adversely affect marketing strategy, or in a worst case scenario, potentially lead to the total demise of the business (think buggy whip manufacturers when automobiles became popular). Although the company has no control over external factors, the key is to identify the threats and draw up contingency plans to negate the threat or soften the impact should an event arise. Ask questions such as:

    • Are consumer preferences shifting away from company business lines?
    • Is price competition from competitors affecting company profit margins?
    • Are new technologies making the company’s products or processes obsolete or unaffordable?
    • Are new competitors entering the market space?
    • Are suppliers increasing prices?
    • Are raw material costs going up due to scarcity or catastrophic events?
    • Is the general economy on the downswing?

    Classifying threats by the degree of impact and the likelihood of their occurrence is often useful to help identify which threats need to be planned for immediately.

    The Benefits of SWOT Analysis
    The main thrust of the exercise is to determine how the company’s strengths can be used to take advantage of opportunities and minimize critical threats. Eliminating weaknesses can also provide resources to capitalize on opportunities or ward off threats. Identifying the most critical issues provides a game plan for the business to follow based on an honest assessment of the firm’s potential.

    Related Posts:
    Reliable Market Research-Ask the Right Questions
    Free Business Plan Templates

    Tuesday, September 4, 2007

    Your Tax Dollars at Work - Best Online Resource

    The US government doesn't waste all of our tax dollars. In fact, the Small Business Administration web site is a great place to find every kind of information related to starting a business. So be sure to check here first and then expand your search to other resources.

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