Tag Archives: market analysis

Business Viability

If we’ve heard one story about someone wanting to start a restaurant, we’ve heard a dozen. The idea of opening and operating a restaurant most likely stems from a bad experience where someone feels they can do a better job than what they encountered. It could be that there is a belief they’re a good cook, or they have children who suggested mom and dad open a restaurant. In any case, the horror stories are more common than tales of success.

Here’s why, and the reasons apply to more than restaurants.

More than once we’ve heard about the person who wants to take over an existing restaurant that failed and closed. We even heard of one restaurant owner who closed a franchise operation and claimed they would reopen at the same location as a “different” restaurant. Could location have been a factor? Or could hiring a majority of the same employees drive a stake into the new operation?

There have been fast food franchises that have torn down one building and relocated to the other side of the street, simply because the old location was not accessible to customers who wanted to avoid turning left into the restaurant. Location is key.

When it comes to any business, it pays to do some diligence and investigate issues such as traffic flow, residential population, ease of access, and other establishments nearby that are capable of or already bringing potential customers to the location.  If you can do that yourself, great; if not, consider a professionally conducted competitive market analysis or feasibility study. Realize that the cost of acquiring that information could help you avoid moving forward on a project that is destined to fail … and spending much more money in the process.

Besides location, you have to consider your management team, target market segments, value proposition, revenue streams, various cost factors, and key resources, among others. All of these are part of developing a business model.

To go back to restaurants, for example, far too often the owner chooses to employ managers to run the operation in their stead. Unless those managers have a vested interest in the endeavor, they could ruin the business by the way they manage the employees, treat the consumers, and handle inventory and other financial matters. Ever hear stories of managers embezzling funds?

Have you identified the various market segments likely to patronize your business or use your products? What are their buying habits? Do you have a value proposition that resonates with them and is relevant to their needs and wants? Do you know how to reach them with effective advertising that provides a return on your marketing investment? What makes your business different from the other ones that provide the same product or service? It’s one of the first question certain consumers will ask.

Now ask yourself: How much money can I realistically expect to make from this business? On this step, it is critical that you are brutally honest with yourself. Leave your emotional attachment to the idea or suggestion out of the decision making process!

As part of this evaluation, ask yourself the long range question: Why am I doing this?

We are here to help you take the time to think through that question.

Brand Your Work – Work Your Brand


Year End Review

December is a hectic month for most business owners.  The Thanksgiving holiday cut short the end of November and, in retail, started the huge push to put black on the bottom line for the year.  December adds holiday parties, end of the month, and end of year in the last week without mention of Christmas, Kwanzaa, New Year’s, and football games.

December is also a good month to review your performance for the last year.  A year end review can be a lengthy process or a quick overview of how your business did.  It should be done in conjunction with laying out strategies for 2014 as well, which we’ll cover in next week’s blog.  Brand Irons can assist you with year end reviews and 2014 strategies.

10 things to think about as you take a look at 2013:

  1. How much of an improvement, if any, does the bottom line show over 2012?
  2. How does cash flow look at year’s end?
  3. How did sales do in comparison to expectations?
  4. How has productivity been improved during the last 12 months?
  5. What has been the trend in consumer demand throughout the year?
  6. What have been the significant changes or innovations in the industry?
  7. What percentage of customers have you been able to retain?
  8. What areas have been identified where staff or employees may need more training?
  9. What does your profit margin look like?
  10. How well are you doing, personally, on your retirement goals?

The complexity of a year end review depends, primarily, on the size of the company and the diversity of the management team.

Most of the check-points listed here pertain to financial information, so it may be wise to schedule a meeting with your accountant to go over performance indicators.  Other items, such as consumer demand, are related to market conditions and may require some research to identify existing trends as well as potential growth areas.  Others are management- and personnel-oriented.

What is critically important, either in reviewing a year’s performance or strategizing for the next business cycle, is to know what metrics you want to measure.  What is essential for the long-term sustainability of your business?  What do you need to know?  What else would you like to know?  Having this in hand makes it easy to compare one year’s results to the following year and put a pinch of realism into budget projections.

Brand Your Work – Work Your Brand.