If you’re in the process of starting a new business, or if you already have one and you’re trying to expand it, chances are good that you’ve come up against one of the toughest questions in the process:
“What are my customers like?”
Big companies always seem to have exactly the right answer when they’re asked this. “We’re very big with the 18-24 male segment, though we can skew as high as 34,” a marketing rep might say. “We’ve seen a lot of growth in the East Coast market, and we’re noticing a particularly large amount of interest with men who have at least 1-2 years of college under their belt. An emerging secondary market comes from young professionals who like to read, but who don’t have the time to get into full-blown novels.”
Huh? How did they find all this information, and how do they know it’s accurate? Are they polling all their customers somehow, or do they have some secret source of demographic information that the rest of us don’t know about?
I used to wonder about that too, but then I took a class on marketing research. Now, since I was old enough to start filling our product registration cards and to say “no” to people trying to get me to take a poll in the mall, I’ve been aware of the field of marketing research. And, like most folks, I’ve even been resentful of it, at times, because it seems like a practice that only big companies with too much money can afford to engage in.
I won’t say my class turned me around on this viewpoint entirely; marketing research is extremely expensive, and it really is something that most small companies can’t afford to do on a regular basis. But the class piqued my interest enough that I’ve joined the Master in Marketing Research (MMR) program at SIU-Edwardsville starting this fall, and I know enough about the field now that I can dispel some of the myths… and tell you how even a small company can use basic marketing research tools to describe his or her customers.
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I talk a lot about publishing on this blog, but my research isn’t restricted to the publishing world alone — as a business student, I’ve had the chance to study a lot of companies in a large number of industries. In fact, one thing we get to do in business school is what are called “case studies” — we’re given a historical crossroads in a company’s life, filled in on the information leading up to a decision that needs to be made, and asked what we’d recommend using the tools we’ve learned in class. For someone like myself, who enjoys strategic planning and evaluation, it’s tremendous fun. But what often frustrates me is that my classmates are so eager to figure out the answer that the instructor is looking for that they don’t approach the problem creatively.
Sadly, this happens a lot in the business world. Managers find themselves in the unenviable role of having to appease stock owners, and they focus on the mantra of, “maximize profits, minimize costs.” This has led to a lot of bad decision-making, and it’s also led to a lot of good companies taking a plunge once they reach a point of maturity where they can no longer sustain rapid growth.
What I find most interesting, however, are companies that are able to look at old industries and find new ways to compete in them. I’m going to give three examples today of companies that have done a great job of thriving in mature markets by redefinig the way they do business. I’m also going to discuss some of the ways that an enterprising young publisher might redefine the publishing industry.
But let’s start with an example from another industry first: Build-A-Bear Workshop.
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Have you ever thought about creating your own comic book?
If my experiences in the industry reflect the population as a whole, I’d guess that hundreds of thousands of people have. And many of them have actually attempted to do it, whether they’ve created an amateur book to print at Kinko’s or gone through the process of putting together a professional-quality series. Every time I go to conventions, I’m struck by how many new faces I see… and how many people I don’t see again because they’ve quietly exited the industry.
I’ve devoted quite a bit of this blog to talking about the creative side of comics through my Comic Book Writer’s Guide. But I’ve noticed that there’s a real lack of advice out there pertaining to the business side of comics. That’s partially due to the fact that most of the companies who do succeed are tight-lipped about their best practices for fear of helping out future competitors. I get that. But it’s mostly due to the fact that most comic book publishers aren’t run like businesses at all; they’re run like hobbies. Thus, there’s a lot of bad advice out there from people who really don’t know what they’re talking about.
In my 6 years in the industry, I’ve been exposed to some of the worst practices, and I’ve learned quite a bit about how not to run a comic book company. And so today, I’m going to offer a quick survey of the business side of the comic book industry… and some tips on how emerging publishers can actually survive amidst all the problems they’re going to face.
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Today, I had an interesting experience — I met with an advisor at my local small business center to talk about my business plan for Army Ant Publishing… and how I can secure more funding to get the company off the ground.
For those who haven’t been following my story, I founded Army Ant Publishing earlier this month, and I’ve spent most of the summer researching the publishing industry and writing my business plan. As a business school student, I understood that a well-crafted business plan is the first step towards gaining investor confidence, and so I went all out, putting together a 55-page business plan that laid out my entire strategy for the next five years.
I won’t get into the details of my business model here, but suffice it to say that my advisor, Jo Ann, said she was impressed with the plan, and thrilled that I’d taken the time to plan out even the minute details. She gave me some tips on better organizing the plan, which I thought I’d include here for those struggling with their own plans…
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Business Planning | SeanJJordan | 
July 11, 2008 10:37 pm | 
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