market research

[sique]

hello all!
i'm trying to write a business plan for the shop we are starting, and i need to know where i would go to find market research, that is, what the demo's are the averages for a successful shop [yes, i know that there's no magic bullet, but it just looks better when asking for loans http://www.thegrumble.com/framer/ubbs/wink.gif] and things of that sort. any help and/or leads would be appreciated. thanx in advance.

------------------
...live life with joy...
sique

[B. Newman]

Knoxville huh?

Hey Mike, that makes 3 of us.

Well, Kodak is almost Knoxville.

Betty

[Sherry]

I worked on my business plan for weeks and kept getting more confused... after reading many samples online and on paper. I finally gave a description of my business, where we were and what we did. Added in strengths and weaknesses, gave current and projected revenue and income, listed advertising options/costs and then did a year by year "goals" list of what I wanted to accomplish. It only turned out to be about six pages, but I can't believe how much it has helped me reach those goals. Of course, I wasnt trying to borrow money on that plan. If I had been I would have included population, age and median income of the region and my customer base (and any validated future projections), a current financial report of the business, a complete inventory listing and cost of intended upgrades/changes. The Small Business and Technology Center in your area may be able to give some advice; and the Chamber of Commerce can direct you to the pop/age/income statistics.

[B. Newman]

Sique you should go to SCORE (Service Corp of Retired Executives). They have an office uptown in Knoxville. Helping small businesses is what they do! I've worked with them before and they were great.

Betty

[WizardEdd]

Sique, about two years ago the PPFA conducted an industry survey that had some very useful information. You may want to call John Redmond at PPFA and see if they have any copies laying around (Originally they charged for it but they might want to get rid of them now). The information may be a little dated but you should be able to glean some valuable tidbits. If they don't have any more e-mail me and I'll see if I can get you a copy.

Edd

------------------
Edd Pratt
Sales & Marketing Manager
Wizard International

[This message has been edited by WizardEdd (edited October 18, 2001).]

[Bob Carter]

Edd offers interesting advice, but if I were expecting to use that survey as a "selling" feature to a bank to legitimize our industry, I would look further. The levels of income, sales, wages etc listed won't put you in a very flattering picture to your banker.

Remember these bankers see industry standards and earnings level much, much higher than our averages. I'm not sure it's helpful to those that have a wider frame of reference.

The most important thing you can include in your plan are the ability to collateralize your loan, the ability of your business to repay the loan, and your ability to operate and successfully execute your plan. I'm certain that the bankers know the demographics of the area of town your looking at for your store. Trust me when I tell you, they are much more interested in your capacity-not the market's capacity. You have to sell them on you first.

Put your effort in that arena-but if you don't know how to do any of these things that business people take for granted, it will probably be apparent to the banks.

Sell yourself first. And if you aren't able to convince the lenders of your ability, the most inclusive market research isn't going to help you much. Make sure you really are prepared. These people turn down loans everyday. Tell them what makes you capable, what makes your operation better. That will serve you better than all the figures you can list, especially if you don't know what they mean.

Remember the 4 C's. Collateral, Credit, Capacity, and Confidence.

[sique]

thanx...
i have been working with the Tn small business development center and they have been great as well...uh...where exactly is kodak, anyway? http://www.thegrumble.com/framer/ubbs/smile.gif

thanxagain,
sique

[sique]

<BLOCKQUOTE>quote:</font><HR>Originally posted by sique:
thanx...
i have been working with the Tn small business development center and they have been great as well...uh, bnewman...where exactly is kodak, anyway? http://www.thegrumble.com/framer/ubbs/smile.gif

thanxagain,
sique<HR></BLOCKQUOTE>

[B. Newman]

Kodak is a wide place in the road near Sevierville. In fact Sevierville annexed out Hwy 66 so far that the Kodak Post Office is within the Sevierville City Limits! Look for the New Smokies Baseball Park and you've found Kodak.

(It was actually named by the first postmaster after finding a Kodak film wrapper on the side of the road! There were too many "old" families in the area to pick one to name it after, hurt feelings and all, so when he saw that wrapper it solved the problem! My husband's family has been here on this farm over 200 years!)

Betty

[WizardEdd]

Bob, "easy there big fella". Unless I read Sique's request incorrectly she was looking for a source for market research from our industry. Had she specifically asked my advice on preparing and presenting a business plan to a bank, she'd have received a little different advice.

I am not arguing your points, but I didn't presume she had no idea what to include. And in fact that doesn't seem the case.

I agree with you that she shouldn't necessarily include the entire survey as part of her loan submission, however, there are some valuable nuggets in the report if you haven't seen it.

[Bob Carter]

Heck, Wiz. I thought I was being helpful. And I guess my only assumptions were that she needed help and didn't know where to look, and any advice was welcomed.

My experience comes from doing over 20 of these bad boys and getting to know what these bankers really want. They want to know why you will succeed when so many others don't.

As for the survey, she asked about averages. Ones I would stay away from were the volume figures (over 85% do less than $400k), wages (79% make under $10/hr) and customer awareness (92% find out about via word of mouth). Would you loan money to someone starting a business touting those figures?

Bankers get to their positions by knowing as much about you and business as possible, simply so they can determine if you are blowing smoke or not. They don't really need to know the average income of your trade area; they know it already. Or they won't be doing their job well or for very long.

In an industry long recognized as woefully lacking in business sense, I find it hard to sugar coat stuff like this. I would hope that some straight talk would be helpful.

I know that when I ask for advice, I want it square between the eyeballs and I want it from people that have some experience actually doing it. And I make sure of that before I ask.

And when I get advice, I am grateful. Even if some of it isn't useful. At least someone tried to help me.

[Jim Miller]

<BLOCKQUOTE>quote:</font><HR>Originally posted by sique:
...yes, i know that there's no magic bullet, but it just looks better when asking for loans http://www.thegrumble.com/framer/ubbs/wink.gif] and things of that sort....
<HR></BLOCKQUOTE>

Sique, that sentence jumped out. A business plan doesn't just make you look better to bankers -- although that's a benefit.

The huge benefit of the planning process is that it helps you define questions that need to be answered in order to operate your new venture as profitably as possible, as soon as possible. Without planning, you not only don't have the answers you may need; you may not even understand the questions.

It's not enough to have what you think is a workable business concept. You should prove on paper that it will work in all foreseeable scenarios. That's not just for the banker -- but for your own day-to-day business decision making.

When we want to drive to a specific destination across the country, we don't just jump in the car and go. We get a map and plan our route. If we come to a detour, we plan our way around it by looking at the map again.

Think of business planning as the process of mapping your route to business success. Without it, reaching your profitable destination is purely a matter of chance (slim), and you probably would end up in a place you absolutely don't want to be (out of business).

About 80% of new small business start-ups fail in the first three years. Within ten years, about 90% fail. If you can operate profitably for the first ten years you either got lucky, or you know what you're doing. Nearly all of the successful 10% weren't lucky; they started out with a good business plan.

If there is anything like a "magic bullet" to assure success of a new business startup, it's a well-researched business plan. Bob Carter's advice is right on the money.

Now about that demogaphic data...Check with your landlord, commercial real estate agents, your local Chamber of Commerce, your library, the US Small Business Administration, your accountant, and your banker. All of them have information you need. If you have to pay for it, the small cost should come back to you many times over.

The most useful part of my business plan turned out to be the pro-formas for the first five years. SBA gave me the forms, and I spent weeks filling in the blanks. It was time well spent, because after I went through that I knew exactly what my expectations (and limitations) were in every expense and revenue category. If I had skipped that work, my business might have failed in 1992. Instead, we made record profits, because we knew what to do when the mild recesion came.

We all wish you good luck, but your own good business planning will help you more.

[R Markoff]

I couldn't help but toss my hat in the ring......

I wrote a two part article for DECOR called, Developing a Business Plan. Part one is all about a competition survey, which includes sources of information and using demographic analysis of your selling area. Part Two was all about the process of writing the plan.

I have also taught this course several times for PPFA. They may still have handouts from the class which include reprints from the article. DECOR publishes an index which will tell you which issues the articles appeared in. They may also be able to send you reprints of the articles.

Jim has given sound advice. The PROCESS of planning is more important than the PLAN itself.

More businesses fail to plan than plan to fail.

Rob Markoff, CPF
Gallery Services
San Diego, CA

[This message has been edited by R Markoff (edited October 21, 2001).]

[R Markoff]

Sorry, duplicate post


[This message has been edited by R Markoff (edited October 21, 2001).]

[WizardEdd]

And when I get advice, I am grateful. Even if some of it isn't useful. At least someone tried to help me.[/B][/QUOTE]

[sique]

hello, y'all

to be sure i am very grateful, but i think some clarification on what i was looking for is needed.

first, i needed info on WHO were buying custom framing in the KNOXVILLE area. in houston where i ran a shop, the average customer was over 25 years old, female, had an advanced degree, in a professional job, and was buying it for herself or her business.

i can assume that the same demo would work in knoxville, but we all know what happens when we assume...knoxville is a smaller market and is a college-driven in opposed to a business driven, that is, its major industry is ut, which might change who it is that i'm selling to...

bob, you're right in saying that bankers want to see the confidence in my work and that i have covered all the bases, but if i don't know who my customer base is and where they are and have accredited sources to back up what i say, will they even listen to the rest?

now about the purpose of the plan...i have a plan written already...but most of my research comes from antedotes from pros like yourself, but in the houston area. i'm looking for antedotes from pros in the knoxville area and hard numbers from accredited sources thanxagain