SBA Delivering Success: Planning & Research

Uploaded by sba on 29.06.2009

>> US Small Business Administration
and the United States Postal Service bring you delivering success,
focusing on the critical components of planning and research
as tools of small business success.
In this chapter we meet Holly DiTallo, owner of the Scottsdale Education Center
in Arizona, and Aaron Wolfson, owner of the Savvy Gourmet in New Orleans,
who share their planning and research tools to build success.
Holly who received a SBA guaranteed loan
to start her business explains how she researches various marketing options.
>> To market the business, that's one of the toughest things at first,
it's one of the most important of course, to the success of the business.
We tried a number of different areas.
We tried going into the backs of catalogs, we tried student, for us looking at education,
we tried directories, things like that.
Our most successful, by far,
our most successful marketing plan has been with direct mail.
Sometimes as a small business when we couldn't,
we wanted to have a very large mailing list, and could not afford the whole thing,
we would go in with maybe one another business that was educationally linked
and would send out things to neighboring areas.
We had to identify our marketplace as well and then pick areas
out of that from which we could mail.
Using direct mail, when people would call and we would ask where they heard of us,
they would say we got this in the mail, it was a very easy way to immediately track it,
because we know exactly how much each letter costs
or the whole mailer per se, cost us to send out.
And we knew exactly how many phone calls
and registrations we would need to cover that cost.
And so the minute it gets to that point we just moved on and said this
by far is the best return because it went far and above the breakeven point for us.
Using yourself as a base for your research I think is very important.
If you fit the venue it's important to look through your own eyes at it and see
if you would respond to your own marketing attempt.
It's imperative that you know what you really want to do.
It's imperative that you are looking six years ahead or seven years ahead rather
than at the next six months of your business.
And to do that you need a good mission statement, you need to really know
where you want to be, and that's what we did.
>> Now let's hear how Aaron Wolfson uses market research and financial projections
to strengthen his business plan.
Like Holly, Aaron was able to start his business with a SBA backed loan.
>> The two most important pieces of our business plan were the market research
and the performer, the financial projections section.
The narrative summary and all that sort of stuff was important in order
to articulate our vision, but really I found that most business minded people,
most banker types would sort of slipped to the back and look at the numbers to see
if we were being realistic in our projections.
And because there was not a business of this nature, existing in our area we had
to extrapolate from other businesses in different parts of the country
and we did a lot of analysis and a lot of study, but it really was just our best guess.
As far as the business plan goes, we started working
on it probably three years before we actually opened.
The food network was certainly popular and we mentioned other media attention
and other outlets where food and cooking and coming together
over food was certainly trending upwards.
But you know it seemed to explode after we started working on the project
which only confirmed our suspicion that this would be, this would be a viable business
and people would be interested in patronizing it.
As far as research for the business plan
and for our own benefit there were existing models in other parts of the country
that used some sort of educational cooking class to drive retail sales.
I was able to speak with owners of those various businesses around the country,
there is some limited market industry data for those businesses.
So we were able to pull together some industry data, some anecdotal data
from speaking with owners of these businesses.
And I also commissioned a market survey in the area to take a look at what parts
of New Orleans would best support a business like this.
And that research came back identifying several zip codes that had the kind of mix
of people that were looking for and Magazine Street seemed like a beautiful place
to put the business, so we limited our search for property just along Magazine Street.
In the business plan we projected a nice mix of locals versus visitors who would come
in for the classes and initially what we wanted to do was to build a strong local base
that would lend some legitimacy to the school.
In other words if you were coming to visit New Orleans and you asked your buddy
who lives there, hey where do you go take a cooking class,
we wanted them to say Savvy Gourmet.
So it would lend a sense of credibility and also we believe that coming together
over food was important from a community standpoint as well
as an entertainment standpoint for people coming to visit.
So it was important for us to establish the Savvy Gourmet as sort of a community center.
All along we really wanted it to be a place where people came and spent time and talked
about food and enjoyed food and learned about food and had great wine,
and really enjoyed the experience.
So he really wanted to be a community business.
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For more information from SBA on planning and research, click on the provided links.
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