EG2008 Growing Local Economies

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Gaining the Competitive Edge: Meeting the Strategic Information Needs

of Small and Growing Businesses

National Economic Gardening Conference

Steamboat Springs

Christine Hamilton-Pennell, M.L.I.S., M.A.R.Growing Local Economies

June 14, 2008

Outline

1. Set the entrepreneurial context.2. Identify the strategic information

entrepreneurs need to grow their businesses.

3. Present case studies from EG programs.

4. Identify key information tools and resources.

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What is an Entrepreneur?

“So if you ask me where outrageous optimism comes from, my best guess is it's the confidence that you have within you, the imagination and determination to fulfill a need in the marketplace. You may not know exactly how the glass becomes crystal or the water becomes wine, but you somehow know you will bring everything you are to bear on getting it done.”

--Jack Roseman, Outrageous Optimism

An entrepreneur is someone who perceives an opportunity and creates and grows an organization to pursue it.

Entrepreneurial Activity

Roughly 10% of population globally97.5% of firms have <20 employees

Half of U.S. non-farm real gross domestic productGenerated 60% to 80% of the net new jobs over the past decade

3% to 5% of small firms account for three fourths of jobs created in U.S.

--Global Entrepreneurship Monitor; Small Business Administration; Economic Development Quarterly, Feb. 2002

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Entrepreneurial Activity

649,700 new firms and 564,900 closures in the U.S. in 2006Half of U.S. businesses are home-basedMore than 60% of U.S. businesses are self-financed55 to 64 year olds most likely to start new businesses in the U.S.

--U.S. Census Bureau; Intuit Future of Small Business Report: Demographic Trends and Small Business

What Do Entrepreneurs Need?

Access to capitalEntrepreneurial cultureBasic infrastructure Livable communitiesTalented employeesPeer networks Market, industry and competitor informationAccess to marketsTraining in all aspects of business

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What Do Entrepreneurs Need?

Access to capitalEntrepreneurial cultureBasic infrastructure Livable communitiesTalented employeesPeer networks Market, industry and competitor informationAccess to marketsTraining in all aspects of business

Business Stages – Stage 1

Stage 1 (1-9 employees): In addition to sole proprietorships, partnerships and lifestyle businesses, this category includes high-potential companies that are beginning to form or are in startup mode. In particular, this group is focused on defining a market, developing a product or service, obtaining capital and finding customers.

--YourEconomy.org (Edward Lowe Foundation)

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Business Stages – Stage 2

Stage 2 (10-99 employees): At this phase, a company typically has a proven product and survival is no longer a daily concern. Instead, growth is the theme. Capital and customers are ongoing issues, but owners begin to focus on tomorrow’s needs as well as today’s. The company begins to develop infrastructure and standardize operational systems. Leaders begin to delegate more and wear fewer hats.

--YourEconomy.org (Edward Lowe Foundation)

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Delivery of EG Research Services

Three core functions in EG programCounseling/technical assistanceResearch Administrative support

Expanded functionsE-commerce/Web marketing analysis GIS services

Role of Business Research Services

Strategic information provides businesses with a competitive edge, reduces risk, and leaves more money available to the business

Skilled business researchers provide reliable, timely, and actionable information to solve specific business problems

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Role of Business Research Services

Most small business owners don’t do their own research

Lack of timeLack of moneyLack of skills

Business research services provide value-added research directly to the business owner

Key Questions

Information needs of entrepreneurs fall into a few main categories:

Who are my competitors? Who are my target customers? What are the characteristics of my market? What are the trends and developments in my industry?

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Key Question 1

Who are my competitors?

Who else is in my space?What are their basic offerings (product, service, price, market strategies, delivery method, etc.)? With whom could I partner?

Key Question 2

Who are my target customers?

What are their characteristics? Do they want what I have to offer? What will they pay for it? In my customers’ eyes, what differentiates me from my competitors?Where can I get lists of potential customers to let them know about my offerings?

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Key Question 3

What are the characteristics of my market?

How large is it? Is it shrinking or growing? What are the potential niches? What are the channels of distribution to get my offerings to the market?

Key Question 4

What are the trends and developments in my industry?

What are the current trends?What are the future forecasts?Who are the industry leaders?

CompaniesPeople

What are the best practices?How is technology impacting the industry?How do I stay up to date?

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EG Research Case Studies

Greeley/Weld County AirportOverview TechnologiesAquaMatrixChurchPartnerOpen Door CapitalConnecticut Economic Gardening Group

Case Study: Greeley/Weld County Airport

Research on "very light jet" and "drone" planes. RSS feeds from industry sources to stay up on trends. Research on Colorado aviation usesAviation companies with government contractsTrends in the industry Research on global innovation in aviation Competitive intelligence on 20 targeted Colorado companies

Question: how can we identify the best recruitment prospects for our industrial space?

Information provided by City of Greeley Economic Gardening Program

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Case Study: Overview Technologies -Unmanned Aerial Vehicle (UAV)

Information about competitors, including details about their products and marketsInformation about industries using this technology, including photography, hobbyists, and the militaryInformation about several other applications for UAV technology

Question: What is the market potential for this UAV?

Information provided by Wyoming Market Research Center, funded by Wyoming Business Council

EG Case Study: Unmanned Aerial Vehicle (UAV) Company


Property/documentationWildlife habitatSearch and rescueTraffic and crowd monitoringCity/county zoning/planning issues

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Case Study: AquaMatrix - Fish Farm and Processing Center

Trends and demographicsRegional markets along the Front RangeMost desired new product formsPrice structuresPrice/volume relationshipsComprehensive analysis of this marketLarger market issues regionally and nationally


Question: What are the market demands and industry trends for fish products?

Case Study: AquaMatrix - Fish Farm and Processing Center

Consumer demand for fish, including organic marketAquaculture industry outlook Value-added fish products Marketing strategies Potential regional distribution markets


Produced customized report, including:

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Case Study: ChurchPartner

Question: How can we maximize sales in multiple channels?

Weekly Dodge reports on church and school building projectsAnalysis of competitorsWeb optimization reportIndustry trends in school furniture marketTrade name searchProduct testing companiesTrade show opportunities Information provided by Littleton Economic Gardening

Project. Used with permission from Rick Emmelhainz, ChurchPartner.

ChurchPartner Results“We received pertinent information on specific internet and catalog based competition that included their sales history, corporate structure and new market penetration. This information guided us to better understand what strengths we had over the competition and how better to position our company in the market. As a result, we have experienced double digit growth, even during economic downturns.”

--Rick Emmelhainz, ChurchPartner

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Open Door Capital

Question: How Can We Target Our Marketing?

Metro area high-growth companies Local businesses with sales of $2 to $5 million and Paydex scores over 30 days Colorado companies with government contractsConsultants who help businesses get government contracts Industry and market trends in factoringInformation provided by Littleton Economic

Gardening Project. Used with permission from Misha Seese, Open Door Capital.

The Connecticut Economic Gardening Group

Competitive intelligence research for high-tech companies:

Process control software company – early warning intelligence assessment of a major competitorComputer hardware company – insight into a niche marketTransfusion products company – competitor product analysisHigh-end display kiosks company – market analysisCompany developing software to support mfg compliance –market and competitor assessmentCompany producing radiation detection devices – competitive products assessmentDisbursement software company – market assessment for college campus market

Information provided by Fred Wergeles, President, CT Economic Gardening Group, www.CT-EGG.org

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Recap of Small Business Needs

Basic question:“What market space are you in, who else is

there, and how will you differentiate yourself to reach customers?”

--Jane John, Principal Researcher, On Point Research

Recap of Small Business Needs

“We don’t know what we don’t know”CompetitorsPotential partnersMarket characteristicsPrice pointsNew product/innovation opportunitiesKey industry experts, associations, publications and trade showsOpportunities on the Web

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Business Counseling/Research Interview

What is keeping them awake at night?Where have they been for help already?What is their core strategy?What information will move them forward?

Business Research ProcessTwo types of information:

Published Intelligence (PubINT)WebDatabases ArticlesBooksTechnical reports

Human Intelligence (HumINT)Customers (focus groups, surveys, interviews)Industry expertsCompetitorsTrade showsSocial networks

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Business Research ProcessWeb search: search.yahoo.com

Get overall sense of industryIdentify terminology

Search article databases and news sourcesIdentify industry trends and market driversIdentify key companies and expertsIdentify trade associations and events

Follow-up on PubINT and HumINT leadsAnalyze results and create reportDeliver to client, interpret results, determine next steps

Business Tools and Resources: Article and News Databases

Subscriptions services:Business & Company Resource Center (library)Ebsco Business Source Premier (library)ProQuest ABI/INFORM (library, JJ Hill)High Beam (low-cost subscription)JJ Hill (low-cost subscription)Factiva (transactional pricing)DialogNexis

Free resources:BizJournalsYahoo and Google news

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Business Tools and Resources: Company & Competitor Information

Subscription databasesBusiness & Company Resource Center (library)D&B Million Dollar Database (subscription, JJ Hill Library)Ebsco Business Source Premier (library)Hoovers (free and subscription)IBISWorld (subscription)Morningstar (library)ReferenceUSA (library or subscription)SkyMinder (subscription/deposit account)

Business Tools and Resources—Company and Industry Information

Free resourcesFree-ResearchHoovers (limited free access)Info SpaceMantaThomas.netTradekeyU.S. Census – Economic CensusZapdata (limited free access)ZoomInfo

See also: “Free and Low-Cost Information Resources for Supporting Local Entrepreneurs,” www.growinglocaleconomies.com

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Business Tools and Resources—Consumer Marketing Lists

AccuLeads (residential lists)Direct List Finder (direct mail lists)ReferenceUSA (residential lists)SRDS Direct List Source (direct mail lists)State government lists (licensed professionals)Business Information Solutions (ESRI)

Handouts and List of URLs from this presentation available at www.growinglocaleconomies.com/resources

Contact InformationChristine Hamilton-Pennell, M.L.I.S, M.A.R.Growing Local Economies1460 S. Grant St.Denver, CO 80210720-394-5270303-282-4280 (fax)[email protected]://www.linkedin.com/in/chamiltonpennellwww.growinglocaleconomies.com

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Want to Learn More?Growing Local Economies offers training, consulting, and

research services to economic development, small business, and library audiences.

Training topics include:Supporting Local Entrepreneurs as an Economic Development StrategyImplementing an Economic Gardening ProjectMeeting the Research Needs of Small and Growing BusinessesThe Role of Public Libraries in Economic Development.

Consulting and customized research services are available on a per-project basis.

Contact us for more information: 720-394-5270, [email protected]