Tag: Market research

Customers

In the nineteenth century, retail entrepreneurs such as Henry Gordon Selfridge popularised the mantra, ‘The customer is always right’.

As a trading standards professional with over twenty years experience in dealing with consumer complaints this is a statement I can categorically state is not true.  Customers are often badly in the wrong.

I prefer a variation of the mantra which states, ‘The customer is king’.  This amendment puts the customer in their true position.  Customers are the most important stakeholder in any business.

In business, the customer is the name of the game.  They are the source of your income and profits.  They are the reason that your business exists and survives.

To survive in business, you need to know what your customers want and who they are.  But customer needs change, as do their expectations and habits.  Market segments are in a constant state of flux.

To thrive and succeed in business you need to know more than what your customers want.  You need to internalise customers needs and wants and you need to commoditise them.

What you must not do is:

  • assume you know better about what customers want than they do.
  • think you know what they ‘ought to want’.
  • hope that customers will want what you have decided to make.
  • fail to care what consumers want because you have sales targets and you’ll be able to find someone to offload products to.

So you need to know exactly what customers want.  Except that is an impossible task. Often customers don’t know what they really want. This is a position clearly exposed by the current Brexit debate where supporters of the UK leaving the EU have vacillated between various different definitions of Brexit from a fictitious ‘world trade deal’ under WTO rules, to a ‘Canada Plus Plus Plus’ super-duper trade deal, to having the rights of EU membership without the costs.  Ask three Brexiteers as to their chosen Brexit ‘product’ and you will get three different answers.

However, even if it is impossible to know exactly what consumers want, you can reduce risk of customer indecision by carrying out market research.  You ask customers what they want, you don’t guess.  Again Brexit is a case in point. If a market researcher surveyed consumers over two variants of a product and the result of that survey was 52%/48%, the research would likely be treated as inconclusive and in need of repetition.

Market research is not marketing research.  Market research is examining the composition of markets, customer needs and wants, etc.  Marketing research is the examination of a firm’s marketing activities and its ability to access markets.

Market research is not easy and you’d be amazed what some senior managers in business have said about it:

  • “We’ve never done it”
  • “Qualitative research is too touchy-feely”
  • “How do you find out what customers themselves do not know”
  • “This organisation works on numbers; not loose concepts of ideas”
  • “The market research agencies we use don’t do that type of stuff”
  • “Sorry, the finance people won’t buy it”
  • “”Product managers hold the research budget and they have sales targets”
  • “Spending money on that hits our profit centre”.

Market research done properly informs management decision-making.  It is not a substitute for creative or professional decision-making.  Again there is a parallel with Brexit.  Many members of parliament say they personally oppose Brexit but that, because the majority in their constituency was to leave, they must obey the instruction of that majority. But such an attitude is not the role of MPs.  Members of Parliament are representatives, not delegates.  Their role is not to obey instructions, it is to use their own good judgement and to make decisions on the basis of the facts placed before them.  That role, to paraphrase Burke, is based on three duties; first, to do what is good for the country; second, to do what is good for constituents and third, party organisation: In that order and where the first duty predominates over the other two.

Similarly management decision-makers have a duty to do what is good for those who hold shares in the business.  That duty may conflict with the results of market research.

Like scientific and pseudo-scientific methodologies, market research has limits of error and when making decisions these limits of error must be carefully explained.

Market research is not an end in itself.  It is simply a method of reducing risk.

So who are your customers?

Customer knowledge is the biggest asset your organisation has.  Like any asset, you need to know it, maintain it and maximise the returns from it.  To do this you need to develop a robust Marketing Information System which can be used to;

  • analyse data for trends and changes
  • gives understanding behind the reasons for changes in customer behaviour
  • and which supports the marketing skills of your organisation and which allows you to do something about the changes in consumer behaviour you have identified.
  • Identifies what consumers buy from you and from your competitors.

It must be remembered that customers do not buy product features; they buy benefits or solutions to their problems.

Remember:

  1.  A product is what a product does;
  2. Customers just need to get things done;
  3. They need products to do those things;
  4. People don’t want a washing powder, they want clean clothes.

So don’t just measure sales data, measure the needs and problems of consumers which leads to those sales and which motivate purchases.  Does your firm measure more than basic sales data?

What benefits do customers seek?

Good marketing is not doing what you are good at but doing what your customers want you to do.

To meet that challenge, you need to find out:

  • What your customers wants and needs are.  The problems they need to solve and the jobs they need to do.  You need to find out where consumers ‘hurt’
  • What your customers need and want from you.  What they believe you can do for them, what they believe you are capable of offering; compared to what you actually can offer; and what they believe you are incapable of delivering.
  • What will your customers need in three months time, a year’s time and in five years’ time.

These are deceptively easy questions which are incredibly difficult to answer.  However, you need to know the answers to those questions in order to know:

  1. Where to put the money for maximum return
  2. Which customers do you want to invest time and money in.
  3. What products and services you need to develop.
  4. What products do you need to divest from or put on hold.

The really pertinent questions you need to ask consumers are:

  • What will the purchase and use of our products do for them and how will it affect a consumer’s status amongst their peers?
  • What will other people think of the consumer by their use of your products and services?
  • What will the consumer enjoy about their use of the product or service; or the result of such use?
  • Will consumers enjoy the relationship created with the producer through their purchase of the product? And will they want to maintain that relationship through repeat purchases?

 

Evaluation of decision-making

How do you make decisions?  Do you use a structured analytical process or do you use gut-feeling and hunches?  Do you just copy the actions of your competitors – creating a ‘me-too’ culture?

Working on hunches, gut-feeling or relying on assumption can be a dangerous path in making business decisions.  If it leads to a ‘me-too’ culture it can destroy important points of difference and weaken your competitive advantage. Worse it can mean wasting scarce resources and budgets on products and plans which have little or no chance of achieving your stated goals.

For example, a couple of years ago, I met with a businessman looking to develop a recipe costing app for chefs and caterers.  Discussing this product with the businessman, I asked how the product calculated the mark up of a finished dish.

His response was that all catering businesses used the same basic formula for calculating profit margins i.e. the whole industry was using a simple cost-plus method of price calculation and that every dish on a menu had a similar profit margin element.

This assumption astonished me.  I went to my office and did some desk research.  I found that the proposed product was working on a myth.  Worse it was predicating a practice which most academics teaching at catering colleges, and to students on hospitality degrees, thought inappropriate and a bad practice.

The restaurant trade is probably the riskiest business sector.  Up to 80% of new restaurant businesses fail within the first year.  Often the cause is poor cash flow.  Perhaps one reason is that catering businesses were relying on the poor pricing practice of a common mark up rather than pricing their meals in terms of the value customers see in them, rather than a flat accounting formula.

The above product had been developed with an incorrect and dangerous assumption at its core.  And so its viability and attractiveness to prospective customers was fatally flawed.

Worse, decisions about this product were made without proper research and proper evaluation of its workability and feasibility.

Over the years, I have also met numerous businesses who do marketing the ‘wrong way round’.  They design a product and then go searching for a market for that product.  Surely a better approach is to examine the needs and wants of the market, and to design a product to meet those needs rather than assuming that a market exists for a preconceived product.

A common activity during my years of food law enforcement was meeting farmers’ wives keen to diversify into cake or jam-making.  Usually this was because they had won a prize at the local Women’s Institute or the had been told by friends that their home-made jam was delicious.  These new start businesswomen had often only carried out the least amount of marketing research possible.  They had carried out no research into the viability of mass production of their recipe; no research into the amount of competition already operating in the homemade jam market; no research into the law regarding the sale of jam (that jam is a prescribed description with strict compositional standards of sugar and fruit content); and no research into developing year round production, not simply seasonal production.  There was little or no thought amongst these prospective jam-making businesses if they were attacking the competition head on; no attempt to find market gaps and develop products in those gaps.

Good decision-making is based on three factors:

  1.  Intelligence –  Do you have all the appropriate intelligence which enables you to make the decision?
  2. Alternatives – Have you explored all the possible alternatives?
  3. Evaluation – Have you evaluated the feasibility, suitability and acceptability of the  outcome of your decision; both for your target market and also within your organisation (the physical, human and financial implications).

Decision-making needs to be objective.  You need to understand the potential implications of your decisions and have contingencies in place.

Such pre-planning does not make decisions infallible but you will greatly reduce the risks inherent in the decision and increase your chances of success.

Prevarication in decision-making is also dangerous.  Continually delaying decisions can be as dangerous as not making the decision in the first place.  you shouldn’t wait to make a decision because you have failed to gather every miniscule piece of information connected to it.  You need information which relates to what is most probable and what is most prominent in relation to the decision. One of the most important factors in today’s markets is swiftness of decision-making and this may make it more dangerous to delay a decision than to make the wrong decision.

If you are aware of the risks associated with a decision, and the probability of those risks occurring, you can plan contingencies appropriately.

To ensure decisions are effective, you need to evaluate the functional, technical and human criteria of those decisions at the following levels:

  1.  Strategic fit:  Does the decision fit within your corporate aims and goals?  Does it fit within your organisation culture; your brand image; your existing product range; and your social and environmental policies?
  2. Operational fit:  Will your organisation need to be modified or changed as a result of the decision?  Does the decision improve your operations? Does it fit within the constraints affecting your organisation? Does the impact of the decision offer sufficient reward for the risk incurred? Does your organisation have the ability to adapt to the change and accept it?
  3. Tactical Fit:  Do you need to change processes and procedures as a result of the decision.  What impact does the decision have as opposed to the benefits offered.  Remember, process belongs to the management of an organisation but the culture of an organisation belongs to all its stakeholders.

Marketing is about the development of a customer-focused organisation.  It is therefore critical that organisational decisions are assessed for their impact on your customer experience.

Of course, there are dilemmas in decision-making and the decision-making process may not always seem rational.  Such distractions as concerns that you do not have all the available information, that you have insufficient time for making the decision or that you lack the appropriate skills to make the decision.  Such distractions may make you fearful of the decision-making process.

But there are rational fears and irrational fears.  It is rational to fear that a wrong decision may affect reward.  it is rational to fear a bad decision may affect career prospects.  It is rational to fear that bad decisions may affect your social esteem.

All decisions are associated with such rational risks; so you need robust assessment processes.

One of the best ways of making decisions is to have a structured decision-making process which appropriately assesses risk.  Such a process must include the ability to amend decisions over time.

 

Assessing Market Risk

A crucial part of strategic marketing planning is the assessment of risk.

Marketing risk can be broken down into five sub-components:

  1.  Product Category Risk – Is your chosen product category large enough to support your business and to provide sufficient earnings?  Many of the businesses pitching on Dragon’s Den are rejected for this very reason.  This risk is high for novel products and low for existing product categories.
  2. Market Existence Risk – Is your target market smaller than planned?  I have a business presentation based on a company supplying three Michelin star catering for private jets; a firm which is yet to make a profit.  It is clear that in setting up the business, the proprietor overestimated the number of potential customers.
  3. Sales Volume Risk – Are sales lower than planned?  This risk is higher if you make assumptions about your customers and competition. It is lower if you carry out appropriately detailed market research.  Beware that you are not entering a ‘fad’ market or product category.  A fad can show massive market and sales growth which can disappear almost overnight.
  4. Forecast Risks – The market grows slower than forecast.  Expected growth fails to appear.  Orders are In excess of production expectations.  The latter risk is currently affecting Tesla who have obtained orders far in excess of their planned production levels.  This has led to a significant drop in tesla’s share price as consumers are not receiving vehicles on time.  Having too many orders can be as bad as having too few especially if you do not receive payment for stock made significantly after it has been produced.
  5. Pricing Risk – Pricing levels in the market are lower than planned.  This obviously affects margins, return on investment and profitability.

If you develop a strong marketing strategy and plan, there is a high probability of delivering your desired market share.  A weak strategy and plan will result in weak market performance.

Marketing risk can be placed under two headings; market risk and profit risk.

There are five market risk criteria:

  1. Target Market Risk –  This is where your strategy only works with some of your target customer segment.  It may not work at all.  This risk is higher for heterogeneous groups and lower for homogenous groups.
  2. Proposition Risk – Your offer doesn’t appeal to some or all of the target customer group.  This is higher if you make the same offer to all customers; lower if a specific offer is made to each customer segment.
  3. SWOT Risks – This risk occurs when you do not leverage your strengths; or you ignore threats; or you don’t improve weaknesses; or you fail to act on opportunities.
  4. Uniqueness Risk – Your strategy fails because you are competing head on with other market suppliers and your offer to consumers is identical to that of your competitors.
  5. Future Risk – Your strategy fails because prior to its launch a major change has occurred in the marketplace.

There are also five criteria in measuring Profit Risk:

  1.  Profit Pool Risk – Profits are lower than planned because of competitors reaction to your strategy.  Often, higher profitability comes at the expense of your competitors and s they react to your strategy.  This risk is higher if your market is mature and static and lower if there is room for market growth.
  2. Profit Sources Risk – Profit is less than planned once again to competitors reacting to your strategy.  This risk is lower if there is growth in the overall profit pool of the market.  It is higher if the source of profits comes from taking customers from your competitors.
  3. Competitor Impact Risk – This occurs where there is a single large competitor in your market and they react to defend their large market share.  This risk is high if your strategy affects that large competitor directly and low if the threat is spread over numerous competitors.
  4. Internal Gross Margin Risk – Profits are reduced because production costs are higher than planned or the costs of providing services are higher than planned.  For example, the Brexit referendum caused a significant drop in the value of the pound compared to the US dollar.  Companies producing goods which rely on raw materials traded in dollars suddenly faced far higher raw material prices yet they were reluctant to pass those cost increases on to consumers.  The result was lower profit margins and less cash for productivity investment.
  5. Other Cost Risks – The costs of promotion, customer service and other ancillary functions are higher than planned and therefore affect profitability.

The risk of not delivering the required level of profit margin is highest when profit margins in the market are shrinking,  your strategy impacts a single powerful competitor and when you make optimistic cost assumptions.

The risk of not obtaining required market share is highest when you treat customers as identical and you do not develop discreet offers to clearly identifiable market segments.

Clearly, if you make plans based solely on assumptions you face higher risk than if you carry out appropriate and robust market research and strategic planning.

Do you trust your data?

Over the last week, my attention was taken by three snippets of ‘news’.

The first was an interview with a GQ journalist who has written a biography of David Bowie.  Instead of the usual form of celebrity life story, the book is a series of interviews with people who interacted with Bowie over his life, some like Brian Eno who worked closely with the star and other, more casual acquaintances.

During the interview the journalist mentioned a conversation with his father about a critical Top of the Pops appearance by Bowie.  The tape of this appearance was lost by the BBC for many years but it has recently been rediscovered.  It is often considered as the point where glam rock exploded on the UK scene. In the clip, Bowie is seen to drape his arm around guitarist Mick Ronson during the closing chorus of Starman; for the early 1970s, a rather suggestive action.

The journalist described to his father what had impressed him about Bowie in the performance.  It wasn’t just the act of putting his arm around Ronson.  it was the colour of Bowie’s jumpsuit and his shock of carrot red hair; it was Ronson’s gold page-boy outfit; it was the colourful stage set and lighting.

Then the journalist’s father spoke, “you do realise son, at that time we had a black and white television?”

The second thing which caught my attention was the article by the foreign secretary, Boris Johnson in the Daily Telegraph on his vision of Britain post-Brexit.  In the article, Boris reiterated the claim that Britain will have £315 million a week to spend on services like the NHS.

Now, I do not believe that Boris Johnson believes that figure for one moment.  Boris is clearly on manoeuvres and preparing the ground for a leadership bid.  he knows that figure is inaccurate but he also knows that a large part of the constituency he is talking to have been taken in by it.

The £350 million a week claim was widely debunked during the EU referendum.  So much so, the Electoral Commission told the Leave camp to stop using it (a warning which was ignored).

The truth is that the £350m a week figure ignores the rebate on EU membership fees achieved by Margaret Thatcher.  it also ignores money sent back to the UK in the form of grants and subsidies.

The UK treasury publishes data on the UK’s EU membership fees.  We paid last year £230 million a week to the EU; £120 million less that the figure quoted by Johnson.  Net, once grants and subsidies are subtracted, we paid £153 million a week.

Now £153 million a week is still a lot of money.  To Brexit supporters it is an anathema.  However, if you consider that the single market is worth £450 billion a year in trade to the UK, our EU membership offers a Return on Investment of 5100%.  If you, as a business were offered such a return, you would grab it with both hands and not let go.

Boris also ignores the costs of leaving the EU.  Only today, the head of HMRC has said that to toughen border controls to the level wanted by many Brexiteers, the cost will be £800 million.  The Office for National Statistics has calculated that the cost of lost tax receipts from EU migrants post-Brexit and in replicating functions currently undertaken by EU institutions will be £315 million a week.

The implications of these figures are clear, on leaving the EU, all of the money reclaimed from our membership fees will be swallowed up replacing lost government income.  in fact, the government may have to find an additional £200 million a week through cuts to services or increased taxes.

The third thing which caught my attention were two internet surveys.  One was listing the best places in the UK to live.  the other was listing the most depressing places in the UK to live.  Edinburgh topped both polls.

Now how can Edinburgh be simultaneously the best and worst place to live?

The answer to nearly all of this is confirmation bias.

Confirmation bias is the tendency of human beings to search for; to favour; or to recall information in away which confirms pre-existing beliefs or hypotheses.  There are three basic forms of confirmation bias:

  1. Biased search for information
  2. Biased interpretation of information
  3. Biased memory

The GQ journalist is suffering from biased memory.  In his mind Bowie’s appearance is full of colour; no doubt based on recent showings of the Top of the Pops performance; when the truth is that he first saw it in black and white.

Many Brexit supporters are guilty of a biased search for information as they only read sources of information which match their political viewpoint e.g. The Daily Mail.  It has been rumoured that David Davis, the cabinet minister for exiting the EU, will only read civil service papers which match his existing point of view.

Biased interpretation of information is where both sides of a discussion have the same information but they interpret it differently based on their beliefs.

Confirmation bias used to be common in miscarriages of justice.  Take as an example the Birmingham Six.  In that case, the investigation of an IRA bombing in Birmingham, the West Midlands police were found to have bent the evidence to suit their case.  The crucial evidence was forensics tests on the hands of the accused.  To the police these were prime suspects, Ulster Catholics with some links, although peripheral to the IRA.  The forensic tests appeared to show that the accused had recently handled explosives.  The police thought they had an open and shut case.  They applied significant physical and psychological pressure to obtain confessions.  However, the police officers involved were so tied to their preconceptions they ignored evidence that put the forensic tests in doubt; the fact that the accused had been playing cards on the night of the bombing and that the coating of the playing cards gave the same results in the forensic test as if the accused had been handling explosives.  In that case, the investigators were clearly guilty of a biased search for information.

Following a number of such miscarriages of justice, new procedures were placed on investigators not just to investigate one potential course of events but all potential courses.  If an accused person gives an alibi, the investigation of that alibi must be treated in the same manner as all other potential evidence.

Then we come to the two internet surveys.  These are likely a case of biased interpretation.  Where two similar sets of information are interpreted in a different manner.

I is also highly probable that these two polls have been carried out in an unscientific manner where little or no care was taken to appropriately select respondents.

This is often an accusation placed at political psephologists, that they way they weight their opinion polls has such an effect as to skew the polls findings.

Professional market researchers take great care to minimise the effects of confirmation bias.  They use information from previous surveys; they carefully select the respondents to ensure that a wide range of demographics are included; they weight polls to take account of potential bias; they ensure the numbers of respondents are statistically significant; etc.

All too often, in small businesses, decisions are made on the views of individuals; often the views of the business owner.  Little or no regard is taken as to the potential for confirmation bias.  As a result there is a real danger that incorrect, costly or improper strategies are pursued.

 

 

Developing Competitive Advantage

In my home town, there are two independent cinemas.  One has taken the route of Porter’s niche generic strategy and concentrates on art house cinema.  The other, a family-owned cinema has taken a different strategic route, it shows the same range of films as the big chains but it does so in such a way as to give it a unique market presence.  It thrives by taking its unique attributes and using them to create points of competitive advantage.

The aim of marketing is to create value for customers and, in return to capture value from them.  Companies with effective marketing strategies win and keep customers by understanding their needs, by developing customer-focused marketing programmes and by building relationships with those customers.

There are three stages involved in the creation of competitive advantage:

  1. Identifying your competitors,
  2. develop competitive strategies,
  3. balance your customer orientation against your competitor orientation.

The family owned cinema competes directly against the large multiplex chains. He has analysed the market and regularly looks for changes in the way the big cinema chains present their products and services.  These are his direct competitors.  But he has gone further.

Many smaller firms have competitor myopia.  They carefully monitor their direct competition and they forget about wider latent competitors.  This doesn’t affect only small firms.  Kodak went bankrupt because it concentrated of competitors making 35mm film (such as Fuji and Ilford). Kodak was slow to recognise the rise of digital cameras manufactured by consumer electronics firms (ironic as Kodak effectively invented the digital camera).  Tower Records went bankrupt not because of other discount record stores but because it failed to see the rise of the digital download.  Borders Books went bust because it didn’t anticipate the rise of Amazon and the internet bookshop.

All these firms failed by ignoring the changes in the wider economic environment.  All were killed off by their latent, not their direct competitors.

The owners of the independent cinema didn’t just look at what the multiplex cinema chains were doing.  He recognised that consumers had wider opportunities to use their leisure time.  He wasn’t just competing against other cinemas, he was competing against theatres, bars, sports clubs and music venues.  If he was to survive and thrive he had to create a product which drew consumers away from these other sources of entertainment.

Once you have identified your competitors, you have to assess them.  You need to identify their objectives and their strategy.  You need to identify their strengths and weaknesses and you need to estimate how they will react to your strategy.

The independent cinema saw that the multiplex cinemas were aiming to attract large numbers of consumers simultaneously by offering the same film on multiple screens.  It was effectively the warehousing of entertainment.  Often they offered only the most basic of food options and only offered soft drinks.  The aim was to factory process movie entertainment e.g. consumers were processed through the site, entering the cinema through a large foyer but leaving through a separate exit.  He also found that many multiplexes were located at out of town malls and shopping centres.

Having examined both the direct and latent competition, the cinema owner looked at his business strengths and developed a strategy to use them.  He realised he couldn’t compete head on with the large chains and that he had to do things differently.

His cinema had been built in the 1930sin an art deco style.  It was located in a leafy suburb of the city and there was little off street parking in the vicinity.  His father had carried out some building work to split the large auditorium into three screens; the smallest of which was a fifty seat screening room.

He may have been showing the same product as the multiplexes, mass market blockbusters, but he realised that his venue could do it in a different way.  He installed sofa-like twin seats in his main auditorium.  He opened up a bar at the back of the auditorium so that customers could order drinks at their seats.  He showed double features with an intermission so that consumers could use the bar between films.  The smallest screen could be booked for private parties.  He used the 1930s atmosphere of his venue to build on the image of a golden age of cinema.  Staff would welcome customers to the venue and escort them to their seats.  He offers a wide-range of food and snacks, not just popcorn and nachos.  He was intent on making a visit to the cinema an event, not just an option to take up spare time. Customers are given the ‘red carpet treatment’.

Being in the suburbs, he was also keen to develop his cinema as a community asset.  He runs a cinema club where regular customers can get discounted tickets and the opportunity to see advance screenings.  He runs traditional kid’s Saturday morning film clubs and late night screenings of horror films.  He retains many customers because they see his cinema not just as a commercial venture but as an important community asset.

The family-run cinema also benefits from his competition.  The rise of the multiplex has meant a huge upturn in people going to the cinema.  In the 1970s and 1980s, cinema was in trouble.  Many venues were closing or being converted into bingo halls and nightclubs.  Now more people go to the cinema than in its golden period of the 1930s and 1940s.  The multiplex chains have allowed the development of blockbuster movies often with budgets of over a hundred million dollars.  They have increased total demand for cinemas and have allowed the development of new technologies such as surround sound, high definition and 3D.

When Apple created the Ipad, it was described by some commentators as the ‘Kindle killer’.  They expected Apple’s tablet to destroy the market for Amazon’s e-reader.  Instead, the Ipad increased the demand for tablets hugely.  Apple took the Ipad concept and turned the kindle into a multi use tablet, not just an e-reader and sales rocketed.

The independent cinemas owners worked hard to identify an uncontested market space.  They realised that there is no such thing as a one size fits all marketing strategy.  They also realised that they couldn’t follow a ‘me too’ strategy where they simply copied the strategies of their competitors.  They recognised that they needed to develop different strategies to those of their competitors and to provide a different product option for consumers.

 

The reason Philmus Consulting exists

I am not a regular listener to The Archers; the BBC Radio Four tale of everyday country folk; but of late I have taken to working with the radio on to provide background noise.  I have therefore become aware of the latest goings on in Ambridge.  There has been significant media attention paid to the storyline of Helen Archer and the psychological abuse she suffered at the hands of her psychopathic husband Rob.  This ended with Helen stabbing Rob but being found not guilty of attempted murder when his abusive nature came to light.

However, it was not the Helen Archer storyline which grabbed my attention but the arrival in the village of two new characters, Rex and Toby Fairbrother.  The brothers arrived with the intention of starting an egg production business.  Despite the concerns of some of the locals, they managed to rent some land and get the Grundy clan to build them a hen-house.  Their business immediately caused arguments, particularly the existing organic egg supplier in the area.

Suffice to say, the egg business did not match up to the Fairbrother’s expectations.  They therefore decided to buy some geese and fatten them up for the Christmas market.  Again existing local businesses had their noses put out of joint, particularly the Grundy’s who had traditionally supplied turkey’s to local businesses and consumers.

Rex Fairbrother appears to be a grafter but his brother is less reliable.  Toby Fairbrother’s bio on The Archer’s website includes the following passage; “”Never short of ideas but lacks the commitment to turn a business plan into a money-making reality”.  The word plan is a bit misleading.  What they mean is business idea as Toby never appears to properly plan anything.

Things came to a head just before Christmas.  Toby was left in charge of the hen-house but forgot to properly secure the gate.  A fox got in and there was a chicken massacre.  the two brothers fell out and following some fisticuffs in The Bull, Toby left the business.

Toby didn’t appear too concerned about this turn of events and soon he was on to his next money-spinning venture, an artisan gin distillery.  This scheme failed to get off the ground almost immediately.  Firstly, Toby seemed unable to produce a consistently reliable product.  Secondly, he hadn’t considered that he needed a distilling licence from HMRC and needed to follow the bond procedures.

You may be wondering why I have spent so long describing a storyline from a popular daily soap opera.  Well, it is because it rings true and I have seen circumstances very similar to that experienced by the Fairbrothers.  The Archers began in the late 1940’s as a way of providing information to farmers and rural businesses in an entertaining manner.  It soon turned into a soap opera.  However, to this day, the programme retains an agricultural business advisor and I suspect that individual has had significant input into the Fairbrother storyline.

During my long career in Trading Standards, I came across many businesses who were in similar circumstances to the Fairbrothers.  At one stage, I had one ‘entrepreneur’ who turned up for advice on a different business idea virtually every week.  Few of his business ideas had any real prospect of reaching fruition and many were in direct contravention of UK law.  At least that individual was willing to seek advice but I see many more small businesses who seem unwilling to seek advice or to plan properly.

I attend business networking groups and I have gone through the business start-up process.  I am therefore fully aware of the issues facing small businesses.

My experience with trying to get funding for my business has raised some issues. Most funders ask for a business plan. this is usually focused on financial growth forecasts.  In short, they want to know that they are getting their loan capital back.  Often the only other questions asked are for a SWOT analysis and a description of the business.  Very few questions are asked about strategy or how strengths are going to be used to combat weaknesses.

At the networking groups I attend, there is a steady procession of new businesses.  Many of these are individuals newly pushed into self-employment and some appear to have little more than a basic business idea.  Take the example of one such business, a cosmetics manufacturer.  I got chatting to this individual and she seemed unaware that the law required her to register with the EU and to send copies of her packaging to the appropriate EU agency.  She had partly followed the cross-European labelling regime for cosmetics but certain required information and symbols were missing.  She wasn’t keeping the required product technical file and she was completely failing to meet the requirements as to cosmetics under the UK weights and measures regime.  This individual initially appeared offering marketing consultancy work (without apparent qualifications) but soon switched to the cosmetics idea.

I have seen ‘businesses’ which are little more that Ponzi schemes.  I have seen some network marketing businesses which seemed to be good opportunities but others which are little more than illegal pyramid schemes. I have seen businesses which are little more than the provider of pin-money.  I have also seen an awful lot of ‘me too’ businesses.

Toby Fairbrother’s gin distillery is a ‘me too’ business.  One person jumping on a fad which others had already started.  I first saw this with jam-making.  Every farmer’s wife and WI member in my local patch appeared to want to start a business selling their jam.  I next saw it with micro-breweries, then it was cup cake manufacture and most recently artisan gin distilleries.  Mostly, these businesses were all trying to attract the same target customers in the same niche segment.  These markets became saturated and many of these businesses either struggled or collapsed.  Ask yourself, how many cup cake businesses started a couple of years ago are still operating?

Fifty six percent of SMEs fail within the first five years.  In the restaurant sector things are much worse. Eighty percent of new restaurants fail within the year.  The number of people being forced into self-employment has rocketed and research shows that the vast majority of them earn far less than they did as an employee.  Many are struggling to make ends meet.

I have also seen presentations from ‘small business guru’s’ offering a range of solutions for small businesses.  Some of these offer ‘magic bullet’ solutions to growth and income generation.  Some are little more than motivational speakers.  others provide a decent service but either tie businesses in to long-running contracts or charge excessive fees.

There is no magic bullet.  Running and growing a business takes effort, resources and the ability to take expert advice.

I started Philmus Consulting because I foresaw that local authority trading standards services were no longer able to give in-depth guidance to small businesses.  I started Philmus Consulting because I saw small businesses were often created without proper planning and marketing expertise.  I started Philmus Consulting because I saw that there was a clear need to provide a level of marketing science and regulatory advice to small businesses which would more normally be found with their bigger counterparts.  I started Philmus Consulting because I know that I have the professional knowledge and experience to give that advice and as such I can help small businesses survive and thrive.

So, don’t be Toby Fairbrother; don’t be one of the many small businesses destined for short-term failure.  Contact Philmus Consulting today and put your business on a secure footing.