Can your idea work?
- Consider your suitability: Start a business where you already have industry or management experience. Studies show that those starting a completely new venture have a higher risk of failure.
If you are starting a new venture, ensure that you are continually learning new skills and researching your industry.
- Consider your idea: Assess the merit of your business idea and determine whether people will be willing to pay money for your product or service.
- Consider your market: Develop a way of consistently reaching your customers, because you require customers in order to survive.
You might also find a lot of marketing is needed to help establish a name for yourself.
- Consider your competition: Look into what your competition are doing because you need to create a competitive advantage to succeed.
- Consider the environment: Try to keep in touch with what is happening in your industry, the general trends and the overall economic situation so you can take into account factors that might affect you success.
- Consider your finances: Keep accurate and up to date financial records and manage your cash flow. A close eye on performance means you can address problems straight away rather than leaving it too late.
- Consider your start-up: Make sure you have enough money to cover your start-up. Many people budget optimistically and then, when in trouble, they find the banks are unwilling to lend money because of the risk involved.
Plan to succeed:
After you complete the 7 Steps to Business Success or the online Business readiness diagnostic it is a good idea to complete a business plan as it can increase your chance of obtaining finance as well as the profit and value of your business. Visit www.business.qld.gov.au/resource centre to purchase an Easy Plan business planning template.
2.0 Industry and market information – The aquaculture industry*
Demand for aquaculture products is positive for the future and expected to increase due to population growth and economic development in developing countries and a change in consumer preference for low fat protein in developed countries.
However, fisheries production capacity is decreasing due to increased consumption of natural resources, highlighting growth opportunities for aquaculture. Prices are projected to grow and a control on supply will maintain this.
Key success factors to your industry:
These are internal factors that are within the control of the operator and should be observed in order to be successful in the industry.
- Land with suitable water conditions is vital to the farming of fish and seafood
- Strategic supply chain management assists with the control of volume and price for farmers
- Financial management to controlling and varying the mix of inputs to production in line with costs
- Business operation utilising technology to improve output efficiency and effectiveness
- Offering complementary value-add activities and products will ultimately increase financial returns
- Disaster planning accounting for the financial and environmental helps business manage risk
- Correct and proper licences for aquaculture
- Research and development to produce higher quality fish to increase financial returns
Key sensitivities of your industry:
These are external factors which are beyond the direct control of the operator that influence each company operating in the industry.
- Wholesale client management relationship will assist producers link with retailers
- Fostering relationships with major purchasers eg. seafood processing business to assist with distribution and bulk purchase
- Domestic prices from wholesalers and processors are crucial to meeting financial goals
- Competition from a global market affects the distribution supply chain
- Availability of systems and technology to help increase productivity and reduce risk which has a flow on effect in cost reduction
Basis of competition in your industry:
These factors include internal competition between industry participants which are medium and external competition from other related industries which is steady
- The raw materials for production becomes less complex and product range expands which should stimulate competition the primary focus being quality and price
- The type of feed used affects the quality of the fish and seafood which in turn affects the selling price to the end consumer
- Vertical integration has provided more overall control and ownership of the production and distribution of goods and services with the view to maximise profits
- Large operators are better positioned to offer competitive prices to wholesalers and processors
- Funding for research and development assists with competitive positioning in the market eg. patents for biotechnology may enhance the product line range
Barriers to entry of your industry:
These are factors which are medium and decreasing can prevent a new company from entering the industry:
- Comprehensive and complete knowledge of licenses and regulations required
- Connection to specialised industry knowledge and expertise
- High risk from external factors eg. disease and environmental conditions and initial capital investment which is high can impact on business financial resources which can deter risk averse market entrants
Know your market:
What type of people will buy from you and who will you target?
- Make a list of the characteristics of the people who will potentially buy your products or services (eg. age, demographic patterns, buying patterns, customer motivation) – this is your target market
- You will need to do some market research to find out about your customers and to identify your target market. It’s recommended that you use demographic information to find out the characteristics and size of your target market in your chosen location (see Further Assistance at the end of this section for some resources that can assist you in this area)
- Other sources of market research data and ways you can obtain information about your target market are:
- Get out and about, look at potential competitors and observe the types of customers they attract
- Talk to people in the industry and ask customers their opinions – it’s important to assess for yourself the needs of individual customers
- Review a range of statistical and information sources such as: Australian Bureau of Statistics www.abs.gov.au; relevant industry association(s) and chambers of commerce; specialty trade or industry journals, research reports and publications; Yellow Pages Online
Have you thought about how to reach the different segments of your target market?
- Your market is not likely to be one, generic market made up of people seeking the same features/benefits from the product or service you’re offering –it’s important to identify small groups of people with similar characteristics who might be seeking similar features/benefits from your product. You may sell and market differently to each segment
- What sort of marketing strategies will you use for the different segments? As marketing can get very expensive, it’s important that you use the appropriate strategies for the particular segment you hope to attract. Some things to think about are:
- What would entice customers to buy your product or service?
- Competitive pricing
- Efficient distribution network
- Packaging and presentation
- Finding prospects
- Promotional ideas
- Potential markets to be targeted and those to avoid
- Where to advertise (eg. newspapers, magazines, TV, publications, direct mail)
Do you have enough time and money to devote to the initial marketing?
- Consider how many people you need to reach to achieve your expected level of sales
- Consider the cost and time of each promotional campaign. In the first year or two you might need to spend a lot of time and money gaining new clients, before you can rely on word of mouth, referrals and repeat business – the completion of a marketing actions worksheet is a helpful way to plan how best to spend your marketing dollars (the 7 Steps to Business Success guide mentioned in Section 1 contains an example of a marketing actions worksheet that might be useful).
Information Sourced From:
