When businesses construct a business plan part of the analysis required is undertaking an overview of the most important factors that relate to their business. To make this easier some people use PEST or PESTLE or STEEP.
This stands for:
Social
Technological
Environmental
Economic
Political
Looking at the economic and political for a local area:
There is a new government in the UK and their clear mission is to adjust the GDP balance between public and private sectors. Locally this will affect some areas more than others.
Since 2000 public spending has risen from 34% to 46%. During the same time about 0.5m jobs have been created in the public sector. In the South West there are about 2 million people in employment of which over 50% of women in employment work in the public sector.
Within Devizes - as a small market town - where 46 thousand people live (Constituency). Employment in public service e.g. Police, Health, Education, Local government is higher than the national average due to the location of PCT, Police Headquarters, Kennet Local Authority (now part of Wiltshire) and Fire Brigade all being locally located. Over 40% of jobs are in the public sector (35.5% in Wiltshire) compared to a national figure of 29.7%.
The government has not concluded its review of government spending but figures of 20-25% have been banded about a lot. Whilst local authority spending represents only 25% of the national budget, funds for local services are raised through a mixture of direct government provision and administered from central government. It may be quite likely that this 20-25% figure hits the regions. Whilst it may not be for direct provision ie doctors, nurses, teachers etc, there is no doubt that non core services will be hit.
How this affects Devizes is not known - but a 20% figure represents 9 thousand jobs of which the vast majority may well be women e.g. 6-7 thousand.
All things have checks and balances. Devizes is a Conservative constituency and a recently elected "new" MP will fight hard for jobs. Wiltshire Council has not prioritised Devizes as a "Vision" town, so perhaps their cuts may be less severe than other prioritised towns. Devizes does not have space for a corporate business to move in and employ thousands of people. Devizes does have a good base for small businesses. There are notable entrepreneurs who have managed to grow good "Middle England" businesses e.g. Mark Wilkinson, Smallbone, Wadworth, and Omitec.
The expectation of central government is to let markets decide rather than government interference. In this situation it will be up to some of the people displaced by the cuts to set up businesses. Whilst many of these may be micro or self employed businesses, some of them may well grow and fill the void left by the cuts.
Alternatively there may be other affects:
Higher unemployment
More out-commuting
Migration out of the area
House price falls
Local recession
Secondary business closure e.g. retail
Other noticeable cuts may be regional development support for Salisbury Plain as the Military prepare to move out. Stonehenge has had its visitor centre cut (again). Yet within this in the UK people may choose to holiday more in the UK as foreign holidays become more expensive and overtly less environmentally friendly. It may be that the Devizes area has lots to offer the leisure and tourism market if it can keep its major assets such as the Kennet and Avon Canal, the Caen Hill Locks and its visitor centre in tact. Smaller employers may find the location attractive in terms of affordable housing, landscape, affordable labour, lifestyle and still in easy reach of London.
Support services such as Business Link may be phased out during the next 5 years. Generally during "turmoil" in the public sector the result is confusion. Support and direction locally may well be lacking and it may have to be up to individuals to take responsibility for what they want to achieve. (There wont be any help)
Does all of this matter?
It does depend on your business (or your future business). Some businesses are more tied into local economies than others. Most businesses have to employ people, and many sell locally. A secondary analysis of an area and looking ahead helps identify possible issues going forward. This then helps identify areas for further investigation - where some primary research is needed. For instance you may like to know "how certain" something is. e.g. Will the Police Headquarters in Devizes close? It may help you to listen to relevant conversations.
Every business needs to know what is going on. Particularly at the moment. There are a lot of changes and tomorrow will probably not be the same as last year. Those businesses that plan and take action have always been better placed for survival and growth.
Most statistical information can be mined online. When you look for it it can often be "hiding"! A clear focus and intent is often the key to success.
Wednesday, 7 July 2010
Tuesday, 22 June 2010
Psychometrics and market research
We are all different. We think differently and we find different tasks more or less easy to do.
For instance someone who is very confident may rely on their intuition. In an area where they have lots of good experience this may be fine. If they want to do something new they are exposing themselves to risk.
Someone who loves people and motivating or enthusing others may well talk to people they know to get information. The risk is that the information may not be objective, ie influenced by the person asking questions.
Someone who loves figures may analyse what has gone on before - but may find it difficult to be confident on predicting the future.
Other people prefer to become very knowledgeable about their product - and other products or services in the market.
All approaches are valid, but incomplete. You may find that you do one or two of the above, but not all.
In order to make good decisions, especially where investing time and money it is important to develop an approach that encompasses a variety of approaches. You may find this hard - perhaps working with a colleague that enjoys the bits you do not is a good way forward.
If you are a small business owner you may not want to spend more time and effort on research - however it does not have to take a long time - and does reduce your risk of failure.
For instance someone who is very confident may rely on their intuition. In an area where they have lots of good experience this may be fine. If they want to do something new they are exposing themselves to risk.
Someone who loves people and motivating or enthusing others may well talk to people they know to get information. The risk is that the information may not be objective, ie influenced by the person asking questions.
Someone who loves figures may analyse what has gone on before - but may find it difficult to be confident on predicting the future.
Other people prefer to become very knowledgeable about their product - and other products or services in the market.
All approaches are valid, but incomplete. You may find that you do one or two of the above, but not all.
In order to make good decisions, especially where investing time and money it is important to develop an approach that encompasses a variety of approaches. You may find this hard - perhaps working with a colleague that enjoys the bits you do not is a good way forward.
If you are a small business owner you may not want to spend more time and effort on research - however it does not have to take a long time - and does reduce your risk of failure.
Sunday, 20 June 2010
Does customer service matter?
Customer service clearly matters. Companies like Kwikfit are more about customer service than mending cars and are more successful as a consequence. McDonalds is about service, as are most fast food companies.
What about hotels?
Somewhere in the list of "why we buy" is enjoyment, rather than convenience or necessity. Sometimes we stay in a hotel because it is in a nice place, nice building, and we can do things we like. A comment got me thinking recently.
We stayed in 2 hotels - in one they got our booking wrong, the UHT milk was off in the coffee, it always took 10 minutes to serve, and nothing matched. In the other, everything matched and service was almost like Pizzahut, timely, friendly, and very organised. A straw poll was taken and the first hotel was chosen. We felt able to relax, and actually we were able to overcome two small issues.
In the first hotel it was probably no accident that there were only 3 people staying. In the other, it was full. If that was the pattern - then customer service matters.
The question is why do we as customers go for the better marketed, more easy to find, better serviced offering? Are we always that lazy? Whilst both hotels were in the same village, both lovely buildings, and similar locations. What if the choice had been between one of them and an "express" chain? Similar price, similar everything, other than one building would have been functional and process orientated, and the other traditional English.
Then the answer is more about risk avoidance. e.g. If abroad - would you go to a McDonalds or a local restaurant?
Something to investigate.... As individuals are we in the business of limiting our disappointment, even on holiday? (its not about delighting your customers - is it more about the perception of risk)
If this was your project to investigate how general this was - and then how it applied to individual cases... what would you do?
What about hotels?
Somewhere in the list of "why we buy" is enjoyment, rather than convenience or necessity. Sometimes we stay in a hotel because it is in a nice place, nice building, and we can do things we like. A comment got me thinking recently.
We stayed in 2 hotels - in one they got our booking wrong, the UHT milk was off in the coffee, it always took 10 minutes to serve, and nothing matched. In the other, everything matched and service was almost like Pizzahut, timely, friendly, and very organised. A straw poll was taken and the first hotel was chosen. We felt able to relax, and actually we were able to overcome two small issues.
In the first hotel it was probably no accident that there were only 3 people staying. In the other, it was full. If that was the pattern - then customer service matters.
The question is why do we as customers go for the better marketed, more easy to find, better serviced offering? Are we always that lazy? Whilst both hotels were in the same village, both lovely buildings, and similar locations. What if the choice had been between one of them and an "express" chain? Similar price, similar everything, other than one building would have been functional and process orientated, and the other traditional English.
Then the answer is more about risk avoidance. e.g. If abroad - would you go to a McDonalds or a local restaurant?
Something to investigate.... As individuals are we in the business of limiting our disappointment, even on holiday? (its not about delighting your customers - is it more about the perception of risk)
If this was your project to investigate how general this was - and then how it applied to individual cases... what would you do?
Friday, 18 June 2010
Picking winners - hypothesis testing
Many people who start businesses for the first time do it for a whole host of reasons. Getting out of corporate life, inventing something and falling in love with it, or simply just wanting to have their own business. Possibly down the list of reasons is the opportunity they have identified has a real chance of making good money for them.
People who start new businesses who already have a business understand what is involved in setting one up and making it work. Perhaps the opportunity appraisal is at the top of their list of drivers.
Does the combination of experience and appraisal mean that existing business owners are more likely to be successful?
Statistics suggest that this is true - hence having someone in your team who has previous business experience is very valuable.
It is not foolproof - methods that work for one business do not always repeat. There is just a greater likelihood of them working.
We are interested in collecting data at the moment about drivers to start up new businesses and then monitoring how key decisions are being made. If you are interested in being part of the study - do get in touch.
People who start new businesses who already have a business understand what is involved in setting one up and making it work. Perhaps the opportunity appraisal is at the top of their list of drivers.
Does the combination of experience and appraisal mean that existing business owners are more likely to be successful?
Statistics suggest that this is true - hence having someone in your team who has previous business experience is very valuable.
It is not foolproof - methods that work for one business do not always repeat. There is just a greater likelihood of them working.
We are interested in collecting data at the moment about drivers to start up new businesses and then monitoring how key decisions are being made. If you are interested in being part of the study - do get in touch.
Sunday, 6 June 2010
Research on the hoof
The Bath and West Show June 2010
I have a love of coffee and could remember that previously there have been lots of stalls selling ground coffee. Whilst you can find every "difficult" product under the sun - ie those that do not sell on the high street, there was no ground coffee to be seen. I was there for 4 days and looked pretty hard.
4 years ago there was lots of coffee ground by individuals hoping to catch the eye of supermarkets.
During this time the market has matured and the supply chain settled down. Ground coffee or even coffee shops are no longer "growth" markets in the same way as they were and to some extend consumers have made their choices on brand.
Breaking this down - it is useful to research things over time - you get a picture of how things are changing. This is an example of longitudinal research.
I was working with a wood pellet supplier - Energy2burn - and with a bit of questioning it was a good opportunity to look at the competitive landscape. It was possible to work out margins, concentration ratios, marketing strategies, and predict behaviour. It helped match what I already knew about some companies to reality. This is called cross referencing.
I have a love of coffee and could remember that previously there have been lots of stalls selling ground coffee. Whilst you can find every "difficult" product under the sun - ie those that do not sell on the high street, there was no ground coffee to be seen. I was there for 4 days and looked pretty hard.
4 years ago there was lots of coffee ground by individuals hoping to catch the eye of supermarkets.
During this time the market has matured and the supply chain settled down. Ground coffee or even coffee shops are no longer "growth" markets in the same way as they were and to some extend consumers have made their choices on brand.
Breaking this down - it is useful to research things over time - you get a picture of how things are changing. This is an example of longitudinal research.
I was working with a wood pellet supplier - Energy2burn - and with a bit of questioning it was a good opportunity to look at the competitive landscape. It was possible to work out margins, concentration ratios, marketing strategies, and predict behaviour. It helped match what I already knew about some companies to reality. This is called cross referencing.
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