Raffle Rush is a useful app where if you’re at an event, you can enter draws to win exciting prizes throughout the day. All you need to do is download the app, sign up and scan the relevant QR code. And voila! You’re ready to up your chances of scoring big. Your email is your sole ticket to success!
I worked with Anthony to create a business plan which allowed him to find financing to help launch Raffle Rush.
NPR’s How I Built This is a fantastic podcast that brings the stories behind some of the world’s best-known companies. How I Built This interviews innovators, entrepreneurs and idealists about the movements they built.
Peloton co-founder: John Foley
In this episode, they interview John Foley, one of the co-founders of Peloton; the fitness and media company that you’ve probably seen commercials for.
In the interview, they greatly undervalued John Foley’s network and experience but nonetheless, this episode touched on several relevant topics my clients often face. I picked this episode because it was a little more in-depth and enlightening than other episodes in that Foley he talks about:
having the discussion with this wife about moving in with her parents if the company fails,
how everyone is similarly able including Harvard MBAs,
how Peloton is only recently profitable after 7 years
There are also great questions asked by interviewer that touches on market trends such as arcades no longer thriving due to user experience-to-price dynamics (i.e. video game consoles vs arcades due to quality of experience), penetration/awareness strategy which led to their distribution model given that malls are making an industry correction, and lastly the trademark question: “How much of this was because of your intelligence and hard work, and how much of this was just luck?”
FYI, I always discuss market and industry trends, launch and penetration strategy, as well as bootstrapping in all my business plans.
Excess inventory, cost management, and other issues are a reality for most businesses. When uncontrolled, a business can face inadequate cash reserves and even bankruptcy.
To mitigate these issues, proper industry and market research coupled with financial planning for contingencies is crucial for any business. Whether you’re in the ideation phase or are already up and running, knowing how much to allocate to the various activities a business engages in is difficult so contact me and let’s create a strategy that works for your business.
It’s summer and festival season is here. Events are big business with over 87 million people attending trade shows, conventions, & conferences; while 32 million people attend music festival. Some annual industry and market stats:
Events are targeted. So attendees are in your market, many in your target market. Renting a booth, depending on the event, can be fairly inexpensive. This is an economical means of raising awareness for your product/service for the following reasons:
You are not locked into a commercial lease contract
Can test the viability of your product/service
Get targeted market feedback
Some of what you may need depending on the event:
Mobile merchant services such as Square
Email collection method
Banners and booth appeal
Or compelling marketing materials (videos, images, samples) of your product/service.
Question: How should new products/services be created?
A) Make a novel untested product/service then find customers for the product/service?
B) Find a group of customers, find one of that group’s unmet need, then create a product/service to address than unmet need?
Reason: The development process of the product/service will take time irregardless of choice A or B. However, with choice B, the likelihood or having to rework the product/service to make it more closely meet the needs of the target market is lower. Also, with choice B, you have a better idea of the size of the target market. Having a market large enough to grow your business is very important. More on that below.
A great example of choice B is Girls Auto Clinic. Girls Auto Clinic is a brilliant combination of female-focused auto repair shop and salon.
Founder Patrice Banks felt what many of us feel when car issues come up:
“I felt like an auto-airhead. I hated all my experiences going in for an oil change, being upsold all the time for an air filter,’ she said. “Any time a dashboard light came on, I panicked.” – Patrice Banks, Girls Auto Clinic Founder
Of course many people come up with business ideas like how Patrice did: through personal experience. However, where most people fail is that their own experience might be too niche. In other words, the market might be too small. How do you know if your market is too niche? Market research. Market research is a process of analyzing factors such as demographics, purchasing habits, direct and indirect competitors, macro and microeconomics, and other elements. As much art as science, thorough market research is a critical step before moving forward with any concept.
Market research is one of the many services I offer at the most competitive prices in the industry. Contact me and let’s find your niche for your new business.
According to a new Credit Suisse report, up to 25% of U.S. shopping malls may close in the next five years.
What are the reasons? Of course Amazon and online shopping is a major reason. However, another factor is mall overexpansion. Currently there around 1,200 malls in the US. Between 1970 and 2015, the number malls grew more than twice as fast as the population. As such, it is predicted that within the next 10 years, that number will decline to 900.
Of course brick-and-mortar retail stores will never completely disappear because of the needs listed above and because of the fact that humans are social by nature. Just the type and make-up of retail stores will change. Possibly pop-up stores (a strategy utilized with great effect by Halloween stores) will become more common?
What to do with vacant buildings? That’s a lot of land that could be used for other use. Maybe mall owners will lower their rental rates. In some areas of Manhattan, retail rents have declined 10-15%.
More housing? Closures from major chains like Macy’s and J.C. Penney are pouring up to 37 million square feet of space back into the market. That could reduce some housing costs. Although, generally more expensive housing markets have greater discretionary spending which is often used for shopping. Also, the time and cost to demolish existing structures, rezone, and rebuild into residential properties along with its infrastructural linkages is not insignificant.
Some mall owners have indicated that vacant properties will be renovated and updated in efforts to attract new tenants and raise rental rates.
What to do?
Who knows that the future will bring but keep in mind that juggernauts like Walmart, Macy’s, and Sears are affected. So starting a service or online store that doesn’t compete with what Amazon sells is a safer option. Brand your own product (e.g. Bonobo, Dollar Shave Club) and controlling your own distribution is another option (of course be aware of knock-offs). B2B businesses (e.g. no one buys industrial components at malls) is insulated from mall closures.
Services such as dentistry, restaurants, car mechanics, large difficult-to-ship products such as mattresses, etc. will remain (so far) an insulated industry.
Analyses such as what I have done above is a small and cursory part of the industry/market analysis and strategy consulting services I provide to clients.
Sometimes my clients ask for a business plan but aren’t yet seeking funding or aren’t beyond the ideation/conceptualization stage. This is where a business model is helpful.
“I have an idea for a product/service. How do I monetize?”
At this stage, you don’t need to exactly know the details of marketing strategy, distribution channels, location, etc. unless it is crucial to your business model.
At the ideation/conceptualization stage, you need to know who your market (i.e. customers) is, growth rate of the industry, who your competitors are, the major costs to bring your product/service to market, and any other major hurdles (e.g. regulatory) that might be a barrier to entry. Business models are 30,000 foot views for seeing if the business is feasible and viable. Why decide on the color the napkin if you’re not sure if there’ll be a wedding, right?
Once we have a good understanding of IF the business is likely to succeed, then we can investigate further and do a feasibility study. Feasibility studies go even deeper to include details of the operation, marketing, product/service, and other pertinent information specific to the industry/sector that your company will occupy. Feasibility studies can be easily adjusted into a business plan by adding revenue projections and investment asks.
Business model should not be confused with revenue model. Revenue model is a piece of the business model. In other words, how the company generates revenue: production, subscription, advertising, commission, etc.
Creators of the board game The Contender: The Game of Presidential Debate raised $140k on Kickstarter but ended up $40k in debt due to inaccurately predicting future sales. This caused them to order more games than they could sell and ultimately caused them to go into the red for some time.
So how do you predict sales? Forecasting is as much art as it is science, finding a right method that is accurate will greatly enhance the efficiency and profitability of any business: over-ordering materials, under-allocating resources, etc. all undermine a company’s operations.
The selection of a method depends on many factors—the context of the forecast, the relevance and availability of historical data, the degree of accuracy desirable, the time period to be forecast, the cost/ benefit (or value) of the forecast to the company, and the time available for making the analysis.
When a company forecasts for a particular product, it must consider the stage of the product’s life cycle for which it is forecasting. The availability of data and the possibility of establishing relationships between the factors depend directly on the maturity of a product, and hence the life-cycle stage is a prime determinant of the forecasting method to be used.
All my business plans come with projected financial statements. I use a combination of industry growth data, historical sales data (if my client has any), seasonal adjustments, advertising expenditures, and other factors pertinent to my specific clients.
Which method is right for you? Send me an email and let’s figure out how to plan for your company’s future.
This is what allowed Zara founder, Amancio Ortega to become the richest man in the world (for at least a couple days).
Fast fashion: Customers wanted the latest fashion, yesterday. Zara’s competitors were taking too long bringing the latest designs to market. Other retailers try to decide what to make, then produce it. A push-model of product development. For example, GAP and H&M will take 5 months to make, design, and distribute new products. Zara listens to what their customers are asking and buying. A pull-model of product development that takes Zara 3 weeks.
Of course it’s not as easy as just asking what each customer wants. Lots of times, people don’t know what they want until it’s shown them. Henry Ford once said if he asked what his customers want, they would’ve responded with, “a faster horse.” Also, changing from a push-model to a pull-model requires overhauling a company’s supply-chain. Raw materials purchases buy 6 months out or more. Trying to get a refund on 100 gallons of dye is not as easy as it sounds.
Although Zara is not considered inexpensive, lower-market competitor Forever 21 has taken it to the next level.
Cheap: In addition to fully embracing fast fashion, Forever 21 offers their products at very low prices. This has allowed Forever 21 to have revenues of $4.4 billion in 2015.
So how do you incorporate market feedback in your business? Generally, smaller companies have an easier time making adjustments because it is a more agile company with more one-on-one contact with vendors and customers. In business school I asked billionaire Leonard Lavin, founder of Alberto-Culver (maker of Alberto VO5 hair products) about his education background. He said he had an MBWA. Master By Walking Around. This meant, he walked around his business and talked to his employees, his customers, his vendors. He conducted market and industry research everyday. If you don’t take the time to talk to your customers, it might be detrimental to your company’s success further on down the road.