Jesse Sartain Economic Strategies

Finding a Market Opportunity in a Poor Economy – Using an Industry Analysis

Jesse Sartain Industry Analysis By Cheryl Davisson Gracie.

“I just want to sell and make money! I don’t need to spend my time collecting all that information about market trends in the industry. That’s for big companies! I just need to get out there and sell.”

Sound familiar?

Industry research takes time, sometimes a little money, and may often turn up information that brings our business idea or strategy into question, destroying our dreams of profit. But, that is the reason we perform the research. A review of your industry is your first step to understanding whether or not your ideas are worth pursuing.

Why perform industry research?

No one wants to spend time planning for a business that is unlikely to succeed. It is a waste of time.

Understanding your industry helps you identify trends in the markets that are likely to impact your business. Will there be a shortage of supplies and other resources that will drive up costs? Or, will there be a surplus that will drive down costs? Will there be an increase in demand for goods and services making it relatively easy to find customers? Or, will demand likely decline? Understanding the trends in the markets is a first step to identifying a market opportunity.

Understanding your industry can also provide valuable insights into the behavior of competitors and the challenges your business will face. Is the industry old and established making it difficult for a new business to get started? Or, is the industry young and growing with new businesses starting up all the time? What companies currently dominate the industry? Are these companies so large and entrenched that a new business will find it difficult to start-up and survive? Or, is the competition small and diffused making it possible for a company to distinguish itself?

It is having the answers to questions like these that makes it possible for you to develop strategies to cope with challenges in the market and effectively compete.

Where can you find information about your industry?

The good news is that the information you need to obtain is for the most part readily available on the Internet for free (or for a nominal cost). Most public libraries subscribe to online references that publish summaries about industries which provide a quick overview (which may be all that you need). Additional information can be obtained by checking various census reports as well as other government publications that provide information about industries. Often, you can find useful information about how market leaders view the industry and markets in their annual reports. Most annual reports can be downloaded on the Internet for free. Finally, trade or professional organizations often conduct research about their industries to share with their members.

Using industry information to identify a market opportunity

In order for a business to succeed in today’s economy, you must find customers with money to spend. Even a quick study of your industry can reveal markets where demand is growing among particular types of customers and where the competition is not intense. Even if it doesn’t, its good know such markets do not exist before you spend your time and energy, not to mention your savings, planning a business around an idea that has little chance of succeeding.

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Corporate Clothing and Branding in Tough Economy

Clothing and Jesse Sartain Branding By Helen S.

It is not surprising to see that more businesses are cutting back on their marketing expenses this year. The current economy situation leaves us thinking twice about where our marketing dollars are going to, and how we can save without compromising the overall outcome of our advertising efforts.

Unfortunately, the marketing (and branding) budgets are the ones to shrink first, and your job as a marketer is to make a decision on where and how to spend your money in order to get the highest return on investment.

Luckily, there have been definite positive changes in the branding department for those who are ready to take the risk and, more importantly for those who have a plan. As more companies are pulling out their branding efforts, you, if continuing on the right path can really stand out, as there would be less players to compete with. So, by not slowing down, and by gaining the momentum, you can really get ahead in the branding game. This is where your branded corporate clothing and accessories play their strongest parts.

Three easy steps to get it right in the tough economy:

1) Identify your audience and tailor your clothing for them. Narrow it down to hit the sweet spot. This will help you to decide what type of clothing you should go with. If your budget is tight, and you could go with only one piece of branded clothing; make sure it is the right one. For example if your target audience is into golf, do your research to see what is the hottest item for golfers this year, and go with it.

2) Clothing with a purpose. There are many options to choose from when it comes to branded corporate clothing. T-shirts, jackets, dress shirts, and when you are aiming to save, you want to choose one piece that would not only be worn often, but also could complement other pieces of your employee’s wardrobe. For example a simple, well-made raincoat or a waterproof jacket could be a good choice for the fall.

3) Branded Accessories. Umbrellas, baseball caps, luggage are always the winners when it comes to branded merchandise. Their longevity and durability have proven to be the best selling points for marketers when choosing a promotional material.

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Raising Capital in Today’s “New Economy”

Raising Jesse Sartain Capital by Lee Traupel.

We’ve helped a number of clients develop business plans and raise capital from “angel” investors, corporate entities and venture capitalists during the last 6-8 years. It’s always a daunting process that can be full of pitfalls and require a tremendous amount of work – but it can be done! Here is some perspective gleaned from years of experience.

The most important rule for raising capital to consider is: it’s never easy to raise capital when you need to! Meaning, investors are inherently risk aversive, can be very picky (a real understatement!) and they are looking for the best deal with the greatest upside and minimal risk.

Rule number two – don’t raise capital! Self fund your company (called bootstrapping in entrepreneur-speak) by finding customers that will purchase your products and services. This enables you to involve your most important business asset in your business from day one – customers!

Rule number three – use the “FAF” or “VMC” methods. Raise seed (early stage) money from your friends and family and/or if you are really committed, pull some cash from a Visa or MasterCard. These methods can and do work for many entrepreneurs – be aware it can be very painful on the back end if your company does not make it!

Angel investors can add so much to your company – they can bring “intelligent capital” to the business. Not only do they invest capital but will very often take an interest in helping you grow the company by taking a Board of Directors seat and/or temporarily assuming a senior management role.

In my experience finding and recruiting a blue chip management team with advanced degrees and a strong corporate pedigree can sometimes kill a startup as quickly as no cash or revenue – yes, they look great in your business plan and venture capitalists love a “strong team.” But, you need “fly by the seat of their pants” manager/leaders who don’t need to grind five sets of scenarios (analysis paralysis) before they can take action – hire entrepreneurial types who’ve excelled in small companies.

Dealing with venture capitalists can be a significant challenge that is fraught with risk and no upside! Remember, they are highly skilled at the entire process, in most cases they’ve done it hundreds of times before. So, your on their turf when you step into this arena and you better do your homework properly (market size, revenue projections, cost of sales, marketing plan) and/or consult with a consultant, attorney or “angel investor” who has been through the process before to give you guidance.

Round two in dealing with venture capitalists (assuming you are one of the 1% that submitted a business plan and/or were referred to them by another “VC approved” entity) can also be fraught with risk – know how to value your company (equity for capital), look at comparable deals in the marketplace and be prepared to negotiate hard and to give up more now than in the last 2-4 years.

Round three in dealing with venture capitalists or corporate investors. Don’t (never!) be so desperate for capital that you agree to turn over the reins of the company if you don’t meet specific performance milestones based on a first or second round of funding. There are too many variables in the marketplace for you too control and you’re taking too much risk for not enough upside. If this is the only way you can raise money from this venture firm or corporate investor then walk away, in the end you will be better off.

Here are some “cliff notes” on how to write a business plan – there is no set formula other than covering the basics about your company; i.e. technology, market analysis, marketing/business development, competitive analysis, management team and a five year set of (detailed by month from startup to year three) financials. The Executive Summary (first 3-5 pages) is the most important, as it is a summary of the entire plan and most investors read this carefully and scan the rest of the business plan.

Don’t get caught in the trap of endless rewrites based on investor feedback – put your plan through one or two reviews by your BOD members and or seasoned execs that will give you honest feedback. Once the plan has been reviewed and approved then go to market with this iteration and stick to it – investors should be investing in you ultimately, not an artificial business plan that more often than not is out of date by the time you get to market.

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