Why Every Entrepreneur Should Utilize Industry Data
Knowing your industry is imperative for small business success but these fact finding missions can also become expensive and time consuming. SBDC can provide insight to small business owners by providing industry information that is either not available to the public or would take far too much time to obtain. Our team of researchers have access to exclusive information and will provide you with a customized report specific to your business and business needs. With access to subscription services such as IBISWorld, a global business intelligence leader specializing in industry market research, and SBDCNet, a small business information resource, the Alaska Small Business Development Center can give you the edge to stay ahead of your competition.
IBISWorld reports will show the business owner the key external factors imperative to their industry’s performance, as well as growth strategies for success within their industry. They also summarize the current performance of the industry over the past 5 years and show the revenue growth (or decline) for the past 10 years. Based on the data, IBIS World will determine whether the industry is growing or not, and what stage of the life cycle the industry is in (growth, maturity, or decline). It will also provide the estimated revenue and revenue growth of the industry for the next 5 years into the future. The report also shows the products and services segmentation within the industry, which means the percentage of revenue generated by each type of product or service. This way the business owner can see where the money is, that is, which products or services within the industry account for what percentage of industry revenue. It also shows the market segmentation, in other words, showing which type of customers buy the most products or services in your industry, and what percentage of industry revenue is provided from each consumer group. With this information, a business owner can determine the most lucrative products and services within their industry, and determine the most effective target market. We will also tell you the key success factors for a business in your industry, as well as the basis of competition so you can learn how to separate yourself from other businesses in the same industry.
Other tools we use such as SBDCNet will provide you with a detailed list of all your local competition. We will provide you with all of the competing businesses in your area, the number of employees they have, their annual revenue, 5 year sales growth, 5 year employee growth and their annual expenses, as well as other specific details about each business. Knowing your competition is vital to success in business, and there is no place like the SBDC that can provide such thorough and complete information.
To embark on such a quest for competitor information on your own, without access to these tools, would be nearly impossible and require a vast amount of time – something a small business owner simply does not have. Even if you are just starting your business, SBDCNet can provide you with general startup costs for your type of business, as well as sample business plans specific to your industry. We will also provide you with the level of capital intensity within your industry, revenue volatility, industry regulations and policy, as well as key financial ratios and benchmarks for a business within your industry. No matter what stage your business or future business is in, you will be able to benefit from the industry analysis provided by the AK SBDC.
Written by Zack Rassell, SBDC Research Intern