Speaking of Business: A ‘don’t do’ list steers user away from pitfalls
Q. It seems to me that you always have an answer on what someone should do in his or her business. I would like it if you could tell me what not to do. For me, I find it easier to stay clear of something if I know what I should avoid.
A. I keep a small list of top ways to destroy a business next to my desk, which I add to once in a while. I often refer to this list as a reminder. Companies that “shoot first and aim second” will almost always find themselves in some of the following situations that will lead them to troubles:
” Going after the big established competitors head to head by offering much lower prices with better personal service.
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” Blindly trusting one’s partners to have yours and the business’ best interests in mind.
” Focusing on the readily available customers.
” Doing more of what one’s social acquaintances seem to admire.
” Focusing on building market share and letting profits catch up on the sheer volume of activity.
” Worrying about other people stealing your idea, or knowing your financial position or marketing strategy.
” Believing that your accountant really understands your business and analyzes your information.
” Expanding into other businesses when you have some cash flow because you are obviously a “biz whiz.”
” Perceiving salespeople as a waste of time.
” Focusing on getting by rather than developing a long-term strategy.
” Counting on the continued courage, foresight and employment of your bank loan officer.
” Building your business around the exceptional performance of a couple of key employees whom you underpay and overwork.
” Considering quality a luxury that customers will not pay for.
” Avoiding sinking money into modernizing the operations until the prices drop.
” Learning by trial and error, bitter experiences and anecdotes shared at the local watering hole.
” Pretending the employees are your family members that will put up with poor management and bad attitudes.
” Continuing to sell the same old way regardless of what the market is doing.
” Avoiding opportunities to learn and observe others because you’re too busy with your own work.
” Doing it all yourself because no one else understands your business.
” Hiring people with less experience than you have.
” Avoiding changing old systems or processes because they are not broken.
” Believing you will take time to plan later.
Q. What do I need to know or do to develop a good feasibility study for my store’s expansion?
A. Listed below are questions you need to ask yourself when preparing a business feasibility study. I recommend you also seek assistance from a professional to insure a good study.
First: What are the geographic limits of the trade area? (The trade area is the area from which a business obtains or draws its customers. Each store or business has a trade area.)
Second: What are the population characteristics of the trade area, and what future population growth is expected?
Third: What is the consumer income level of the trade area?
Fourth: What is the estimated total market potential in the trade area?
Fifth: Find out what benchmarks your industry and competition uses in the above areas.
To answer theses questions one may:
” Determine where and what data are available at your local chamber, library or college.
” Look at the County Business Patterns report to get a general overview of retailing in the area.
” Study the Bureau’s Major Retail Centers report, which will provide data on downtown business districts and shopping centers.
” Look at the Census of Retail Trade to determine the total number of stores in the metropolitan area. By dividing the total number of stores into total sales you can measure the market share of each store. From these census facts, you can determine whether the area can support another similar business.
” Define the trade area more accurately (the radius).
” Plot the radius of the trading area, using a census tract map.
” Divide the trade area into zones such as primary zone and secondary zone. This would be dependent upon the distribution of the population.
” Determine the population characteristics of the trade that are important to your business.
” Determine population characteristics at the city level by using PC(1)C.
” Boundaries of the primary and secondary zones correspond to census tract boundaries. Prepare census facts for the trade area as a whole by adding up data for each tract falling within the trade area (i.e., age, race, sex, income, labor-force characteristics).
” Determine whether the characteristics of the trade area indicate it is a marketable area.
This is only the beginning for your study. However, with this information you are well on your way to a good report.
Greeley resident Russell Disberger is a founding member of Aspen Business Group, a Northern Colorado-based specialty-consulting and venture-capital firm assisting businesses in obtaining strategic growth. He can be reached at (970) 396-7009 or via e-mail at russell@aspenbusinessgroup.com.
Q. It seems to me that you always have an answer on what someone should do in his or her business. I would like it if you could tell me what not to do. For me, I find it easier to stay clear of something if I know what I should avoid.
A. I keep a small list of top ways to destroy a business next to my desk, which I add to once in a while. I often refer to this list as a reminder. Companies that “shoot first and aim second” will almost always find themselves in some of…
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