A regional business developer at a one-hundred year old manufacturer of plastics processing equipment in Europe contacted Ground Floor Partners to estimate the North American market size for a particular class of high precision machine presses. European headquarters believed there was a large market for their machines in the United States. Our contact in the United States had been tasked with selling in North America; he believed the market size was much smaller than headquarters' estimate. Headquarters wanted a professional market assessment so they could better understand the competitive market landscape. Specifically, we were also tasked with uncovering the following:
- Market Size --- estimate the number of machines sold per year in Canada, the United States and Mexico
- Pricing Analysis --- uncover prices competitors are charging for similar machines
- Purchase Frequency --- how often are systems purchased and what triggers such decisions
- Customer Segments --- understand what industries use these systems and how purchasers select a supplier
Given the lack of information available through online sources and industry associations, we relied heavily on interviews with industry experts and end-users. We supplemented these interviews with secondary market research compiled through websites, databases, trade magazines, and third party market research reports.
Our research showed that the market was indeed much smaller than expected by European headquarters. A combination of factors contributed to this: slow industry recovery from the recent recession, a general decline in the industry due to mass migration of manufacturing to China and other low-wage countries, the extremely long lifetime of the machines (20-30 years), the development of an active used-equipment market, and equipment sharing among users. Our findings allowed the company to redesign their international marketing and sales strategy to focus on more lucrative markets.
A well-established catering company in eastern Pennsylvania contacted Ground Floor Partners to conduct a feasibility study for a large restaurant and bar they had been planning. The restaurant and bar were going to be housed in an old building in an historic district undergoing extensive revitalization. However, when renovation began, the project experienced significant cost overruns due to unexpected problems. The catering company wanted to decide if they should continue with the project despite the cost overruns, or take their losses and shut the project down?
Ground Floor Partners looked at the project from a number of angles, including the detailed plans for the restaurant and bar, the local and regional demographics, traffic patterns, local competition, and projected financials. Our conclusion was that although the investors had definitely experienced a major setback, the long term opportunity was so great that we believed it would be a mistake to shut down the project. The investors agreed and are proceeding with the development.
After the recession began in 2007/2008, a specialized audio visual services provider experienced several years of declining revenues, to the point where the business was barely surviving. In early 2011 the founder contacted Ground Floor Partners for help.
Rather than trying to apply a short-term fix, we approached the problem with a long term view. We did a quick assessment of the business, and concluded that marketing was the most important factor. The owner and his staff were extremely good at the technical side of the business, but had never needed to invest much effort or money into marketing and sales.
We analyzed the company's clients and projects and concluded that they were overly focused in one relatively small target market. We identified several other larger and presumably more profitable markets, and worked closely with the owner to develop a strategic growth plan, redesign the company website, and implement a variety of other marketing efforts, including SEO, pay per click advertising, direct mail, and email. Within a few months after the plan was completed, inbound calls increased dramatically and the firm began closing more sales. Revenues more than doubled. Ground Floor Partners is still working with the company to further increase revenues and profit margins.
An experienced spa manager and her business partner contacted Ground Floor Partners for help developing a comprehensive business plan for a high-end salon and spa in one of Chicago's upscale neighborhoods. She needed the plan to obtain enough debt financing to secure a lease at a high end retail location.
Ground Floor Partners worked closely with the partners on their business plan. We helped them map out their revenues and expenses for the first three years, and also introduced them to an insurance broker, a website designer, a business attorney, an interior designer, and several banks. After a long search, the client was able to get enough financing to secure a lease at favorable terms and open the spa.
A successful real estate developer engaged Ground Floor Partners to conduct a thorough feasibility study. He had purchased a 2.5 acre parcel of land, originally for residential property, but then decided it may be better location for a large indoor sports facility. The developer had already prepared detailed financial projections based on a proven business model with one main revenue stream: hourly use fees. However, the developer and his prospective investors were concerned that the market demand might not be enough to make their projected revenue numbers. The developer also wanted to make sure he had not overlooked any other risk factors which could negatively impact the business.
Ground Floor Partners completed a thorough feasibility study to understand:
- The Market landscape (size, trends, opportunities, competition, risks, etc.)
- Demographic analysis (neighborhoods, transportation times, etc.)
- Estimated staffing & operations costs
- Strategies other indoor sports complexes have used to maximize revenue
- Sensitivity analysis to weigh various pricing levels and usage rates against operational costs
Our study involved extensive secondary market research, site visits to similar area establishments, as well as a number of in-depth interviews with amateur sports enthusiasts who might use the facility. Although we clearly identified a number of risks, we concluded that there was enough demand to make this a highly profitable venture, so we recommended proceeding with the project. The developer is now proceeding with the project.
A physician had designed and developed a web-based software system for scheduling and managing emergency room physician work shifts. The system was almost ready for beta testing. The doctor had done preliminary market research on customer demand and the competition and had several ideas for how to price the service. He wanted to keep the system as simple as possible for end-user groups, and was in favor of relatively slow but steady revenue growth (so no outside investors were needed). He contacted Ground Floor Partners for help with:
- Market Analysis/ Positioning
- Pricing Strategy and Analysis
- Financial Projections/ Breakeven Analysis
We worked closely with the doctor on all of these issues, and also provided additional guidance on the software development and marketing of the business. The emergency room scheduling system went through beta testing, and is now being used by a number of hospitals and medical practices.
An early stage Illinois biotechnology company was in the process of developing a portable, point-of-use pathogen detection device to enhance food safety throughout all facets of the food processing and production industries. However, different segments of the food processing industry placed variable emphasis on the importance of food safety monitoring. In order to gain a deeper understanding of the needs, willingness to pay, and current solutions available to the specific customer segments, the client contracted Ground Floor Partners to conduct primary market research to gain greater insight into these various groups in order to better position the pathogen detection device upon its entrance into the marketplace.
We first designed and conducted an in-depth survey with respondents that worked in meat packing (beef, pork, etc.) plants, poultry farmers, dairy processors, vegetable growers and processors, fisheries, grain and seed millers, organic foods and the canned and frozen food industries. In addition, we also set out to personally interview experts that included: USDA food safety personnel, FDA food safety personnel, Department of Homeland Security, food import specialists, food processing plants that handle substantial amounts of imported food stuffs, food transportation companies, large scale (corporate owned) farmers, and meat packing plants. This work was reinforced with secondary market research that addressed trends in food safety management. In order to better propose an ideal market positioning for the client, we also assessed the competitive environment with regard to current and on-the-horizon food safety solutions.
We interviewed approximately twenty food safety experts and were able to attract a strong number of respondents across all food processing industries within our survey. Thanks to the surveys, interviews and secondary research, Ground Floor Partners was able to deliver a report that addressed the current food safety measures and needs within seven separate processing industries. Based upon this analysis, we were able to rank each food industry segment based on their willingness to adopt greater safety, regulatory oversight, current needs and existing competitors. This report suggested that the client’s best market opportunities existed within meat processors, vegetable/ fruit processors, poultry, fish/ seafood and organic growers. A final 30-page report was delivered to the client that outlined our recommendations and provided next steps for the client to pursue. The client has continued down the regulatory approval path and has been in talks with a food operations management software company to integrate their device into the software so as to enable continuous monitoring within food processing plants.
A client asked us to perform due diligence and estimate the fair market value of a Wireless Internet Service Provider located in Illinois. Several other suitors were also looking at the company, and we had to work quickly so that our client could decide whether or not this was a good opportunity and, if so, establish a fair purchase price.
We prepared a list of more than 50 specific questions for investigation that covered all aspects of the acquisition that would be relevant to this decision, including market opportunity, competitive landscape, barriers to entry, technology, sales and marketing, operations and processes, management team, financial performance, and subscriber base. Then, we met with the management team at their headquarters, assessed their operations, reviewed and analyzed company financial and operating documents, and posed our own questions.
Our meetings and supplemental research enabled us to complete a first-pass assessment of the opportunities, risks, and market potential presented by the acquisition opportunity whereby we were able to deliver a complete report to our client in less than two weeks. The report included our recommendations, supported by analysis of financial documents, estimates of valuation based on several alternative measures of value, a SWOT analysis (of strengths, weaknesses, opportunities, and threats), and an assessment of risks. We presented several growth scenarios, ranging from extremely conservative to moderately optimistic, and quantified the performance of the company using a discounted cash flow analysis. Then we compared the company with a basket of peer companies based on price-to-revenue multiples, price per subscriber, and other measures. We also presented the client with a large binder of current articles on the market, competition, products and services, licensing and frequency issues, and other areas of concern.
The client entered negotiations armed with a thorough understanding of the company's strengths, weaknesses and potential for growth, and an independent assessment of the value of the deal. Ultimately the client decided not to make an offer, based on the significant risks we uncovered, coupled with the high price-tag set by the seller.
An innovative start-up firm in the outdoor advertising industry hired us to improve their business plan and go-to-market strategy. The firm’s proprietary software service caters to the “proof of performance” market – verifying that outdoor advertising is in the right place, displayed at the correct time, shows the right content, and is unobstructed from view.
We researched the proof of performance market, rewrote the business plan, and refined the marketing plan. Our research and analysis indicated that although the firm had a significant window of opportunity within the marketplace, several better funded competitors were gaining ground so it was important for the company to seek additional funding. We helped the owner develop financial projections and a PowerPoint presentation. We also set up a small roundtable of experienced business executives (including 3 executives with experience in large advertising agencies) who provided valuable feedback on the owner’s presentation, business model, and value proposition.
During our engagement it became clear that the firm’s sales process was not effective and was hindering their growth. We introduced the owner to an experienced sales consultant who is now working closely with the firm. Although the current market is very challenging for the advertising industry, the firm has added several additional team members recently and appears to be well-positioned for future growth.
A retired Chicago entrepreneur engaged Ground Floor Partners to help him revise and update a previous business plan, raise capital, and assist with the company’s marketing strategy and execution. His former company had sold several industrial and consumer products in the 1970s and 1980s but had discontinued operations due to unfavorable shifts in the relative pricing of oil, natural gas and coal. Over the past few years market conditions had shifted in his favor, so the entrepreneur realized his products should be in high demand now, particularly in Asia.
We worked closely with the entrepreneur and his management team (the Chief Technology Officer and the Director of International Business Development) to revise their business plan and marketing plan. After several weeks of discussion we realized they had a much wider range of products than we had initially believed. However, each product had a very different set of target markets and that each required a different market positioning and sales approach. We advised our client to form two separate divisions, one for Industrial products and one for Consumer products. The Industrial products division focuses on large electric utilities, steel mills, shipping ports, and other large-scale users of industrial fuels. The Consumer products division focuses on individual consumers, restaurants, and other groups who use charcoal, wood pellets, and other similar fuels for cooking and heating.
We also advised our client to prioritize their efforts and focus on one or two of the highest potential products rather than spreading their efforts across all products. However, the client believed they had little competition outside of the United States, and were convinced they would have an easy time selling and marketing their products. We urged the client to conduct more market research and rethink their strategy and positioning. In an effort to convince our client that more work was needed, we set up a practice presentation so the CEO and management team could present their ideas to several local senior marketing and strategy experts in a non-threatening and safe environment. We developed a PowerPoint slide show and coached the CEO on how to prepare for the presentation.
We discussed the report with each member of the management team. They then agreed to join us in an intensive 2-day workshop to address all of the issues raised in the report. We scheduled the workshop for a few weeks later when all three members of the management team would be in town. The workshop went extremely well, and we developed an outline of a new marketing plan and product launch strategy. All three members of the management team agreed to take responsibility for specific, critical action steps. These included applications for trademark registrations and provisional patents. They also agreed to seek formal letters of intent from several partners, clients, and vendors.
Several weeks after the workshop, the Director of International Business Development contacted key officials in the Asian country they had selected as their primary industrial target. Unfortunately, the deal fell through due to unanticipated technical issues involving the use of a competitor’s product in this country’s largest utility company’s boilers. The client is currently rethinking their strategy. They recently landed their first sale (of another industrial product) within the United States, and are now in discussions with a major international worldwide television infomercial production and distribution company for their main consumer product. They are also pursuing other avenues for sales of their main industrial product into China, Australia, and other countries.
An established receptionist service in downtown Chicago was struggling with low profits and dwindling revenue.
We conducted a business assessment and identified four critical areas which needed improvement:
- Unbalanced Revenue Portfolio - Client had several revenue streams, but they were out of balance. The largest revenue stream (telephone answering service) was barely profitable and took time away from much more profitable services such as transcription, research, and editing.
- Debt - Client had a large outstanding debt at a high interest rate. She was not making enough money each month to pay off any principal.
- Staffing & Operations – Client needed to transition from working “in” the business to working “on” the business. This required hiring additional staff as well as setting up and perfecting numerous internal procedures for efficiently handling sales, invoicing, project management, internal reporting, and other tasks.
- Marketing - Client obtained most new customers from word of mouth and Yellow Pages advertising. Over the past few years, word of mouth seemed to stop working, and the Yellow Pages ads cost more than they brought in.
Ground Floor Partners worked with the client to set specific objectives in each of these areas, and helped her implement an action plan to improve profitability. We helped the client develop a preliminary marketing plan to acquire new customers at a lower cost, and grow the company at a rate she was comfortable with. We focused niche marketing efforts on attorneys and other selected groups of customers with very demanding needs, who are willing to pay a higher price for quality work. We also helped the client restructure her pricing so it was more in line with what competitors were charging (she had not raised her prices in years and was leaving money on the table). We helped the client define several new staff positions, helped her recruit several staff, and assisted her in improving numerous internal procedures. Finally, we helped her work out a debt repayment plan, where the client increased her monthly payments to quickly reduce outstanding principal.
Our client sold the low-profitability answering service, and has gained new customers that are more profitable and have higher growth potential. Gross margin has improved significantly, and she has paid off all long-term debt. She has hired several new staff to assist her with the expanded workload, and is now able to take several vacations each year. Now over 30% of her new clients come from referrals, and most clients are long-term.
A language translation service in Atlanta was growing and earning a modest profit, but the owner was overwhelmed by her workload and felt that the company was not realizing its full potential.
Based on our intensive review of operations, Ground Floor Partners made several recommendations for enhanced performance:
- Administrative Support - Client was spending almost 50% of her time on administrative tasks. By using an administrative resource, she would have more time and energy to devote to marketing and sales.
- Reduce Reliance on Intermediaries - Client was caught in a pricing squeeze. The majority of her customers were translation agencies rather than direct users of her services, so by the time she paid her employees she was making almost nothing.
- Expand Scope of Service - Client offered translation services in several languages, but she lacked the capability to offer translations in the languages that were in greatest demand by large, corporate customers.
We helped the client develop a job description, qualifications and characteristics to help her identify a good administrative assistant. We worked with her to develop a growth plan whereby she would gradually add (high profit margin) direct customers, seek relationships with major corporations that are willing to pay a premium price for timely, quality work, and reduce (low profit margin) sub-contracting work. We worked with the client to design a plan to broaden her menu of services by adding new (higher demand, higher profit margin) languages, and build a database of qualified contractors to provide these new services.
Our client successfully hired an assistant to provide administrative support. She redirected her marketing efforts toward major corporate customers and as a result, has landed several much larger clients over the past year. She is now adding new high-demand languages to her service menu at the rate of about one per quarter.
Two certified, award-winning professional physical therapists engaged us to develop a business plan for their proposed physical therapy clinic. Although they had a limited budget, they were not under any significant time constraints. They needed a professional business plan to guide their growth for the first few years and also help them obtain financing. They had been working on their business plan for many months, but decided they could benefit from professional help.
Ground Floor Partners helped them refine a clear mission statement, a long-term vision for the business, and a set of short term goals. Some of the most important issues we addressed were their goals for the ultimate size of the clinic, the types of clients they would serve, and what services they would provide. Once these were settled, we worked closely with them to establish detailed plans for staffing, marketing, operations, and financing. We performed a competitive market analysis, which included a review of all potential competitors within a 50 mile radius of their proposed location. We also guided them through the process of interviewing other (non-competing) physical therapists so they could better prepare for the issues they would face when they opened their clinic. We also helped them select various partners (attorney, accountant, banker, etc.), select a final location (partly determined by an analysis of the type and size of space they needed, versus what they wanted). We finalized their business model (focusing on payment/contract issues), their marketing plan (client acquisition and retention plan), and other issues.
We completed several drafts of the plan, and guided the client through the process of obtaining bank financing. After several discussions with bankers, the client selected a bank and was quickly approved for SBA loan financing. They opened their clinic several months later and have since grown faster than planned.
An internationally known staff scientist with a Ph.D. from MIT engaged us to develop a business plan and a marketing plan for his proposed genetic testing laboratory. The company’s primary product and service is the rapid turnaround of high quality Real-Time Polymerase Chain Reaction (RT-PCR) analyses of biological samples for private industry, government laboratories, public health facilities, universities, and other groups. The lab also planned to provide consultative guidance to clients to assist them in properly preparing plates and/or interpreting test results.
By the time we began work, the client had developed a clear vision statement, long-term goals, and a good description of his proposed products and services. We worked closely with him to refine his business plan, prepare detailed financial projections, and develop a fact-based marketing plan. The client anticipated a rapid learning curve (both for himself and his technicians) and planned to implement a series of progressive automation steps during the first two years of operations. He also had several levels of products and services, and expected long lead times between the time he received samples from customers and when customers paid for tests (up to 90 days lag time, depending on the size of the order and other factors). These considerations (steep learning curve, rapid automation, and complex payment timing issues) made the financial projections rather complicated, and sensitive to underlying assumptions.
On the marketing side, we did extensive research on the various potential markets for the lab, and established a hierarchy of target markets, ranking them by likely market size, rate of adoption, likely sample size (dozens of samples per year versus thousands of samples per year), and market trends. During our engagement we interviewed several industry and academic experts, and consulted numerous specialized data sources and trade journals. Through these efforts we identified several problems and opportunities of which he was not previously aware. However, by and large, our results supported our client’s analysis, and showed that the market potential for the lab was even larger than he had originally thought.
Ground Floor Partners completed several drafts of the business and marketing plans and finished the final versions on a tight schedule. The client raised over $300,000 in equity financing before the final business plan was completed. He finalized an agreement for lab space several months after we completed our work, and soon after began operations. The lab is now operational and growing.
Ground Floor Partners was engaged by a local residential construction firm on the South Side of Chicago. They had only been in business for a few years, but were growing rapidly. They hired us to help them review all of their operations, identify and prioritize problems, devise and implement solutions, reduce operational risks, and position them for steady yet rapid growth over the next few years.
Our first step was to conduct a comprehensive business audit. The audit revealed several major problems, including questionable employment practices, insurance overpayments, poor accounting practices, insufficient oversight of bookkeeping, no marketing or sales process, and no clear marketing strategy.
We worked with the client over a period of approximately 6 months to rectify these issues.
Based on our recommendations, the client replaced their accountant (who was completely unresponsive to their requests for help), hired a corporate attorney (in addition to their real estate attorney), and hired an experienced project manager so the owners could focus more on marketing and sales. We worked closely with the client and their bookkeeper to streamline the company’s bookkeeping procedures. We also developed a 20-page procedure manual for bookkeeping. This allowed the owners to tighten control over bookkeeping procedures, and also provided a backup for them in case the current bookkeeper decided to leave.
We spent a significant amount of time reviewing the client’s portfolio of work. This involved analyzing contract specifications, pricing, payment terms, ongoing maintenance costs, as well as labor and materials estimates, for hundreds of construction projects. The end result was that we were able to classify the client’s projects into 5 or 6 well-defined segments, such as remodeling, rehabs, garage construction, framing, etc. We then worked closely with the client to establish new, more profitable guidelines for project pricing, payment terms, and labor and material estimates. Based on this analysis, the client agreed to gradually phase out certain types of lower-profit projects, and focus on a reduced set of higher-profit projects.
We designed a preliminary marketing plan, which combined low-cost local Internet marketing, door hangers, direct mailings, print advertising, and PR. We then helped the client implement parts of the marketing plan. In particular, we helped the client select a website designer and hosting service, and worked closely with them to develop and organize the content for their website so it accurately reflected their particular brand and unique message.
An accomplished musician, composer and musicologist, engaged Ground Floor Partners to help him develop his California-based niche Internet business focused on classical music history, performance, and instruction.
We worked closely with the client over a period of several months, analyzing the competition and questioning the business model. We came to the conclusion that the original business model would not work because of complications in the Intellectual Property laws, so we settled on a simpler proven model that was already used by another firm in a related industry. Once the business model was settled, we were able to quickly develop the complete business plan and pro-forma financials. Since the business was clearly going to need significant capital to start operations, we helped the client plan for multiple financing rounds over the first two years. We prepared an investor-ready business plan document and investor presentation materials, so that he could present his vision and objectives in a compelling way to prospective equity partners.
Our client successfully raised over a hundred thousand dollars in equity funding, launched their website, and has built a substantial customer base of classical music enthusiasts, musicians, and other music professionals by word-of-mouth referrals supplemented by "guerrilla marketing".
We reviewed a number of commercialization strategies with the entrepreneur. We researched and analyzed their benefits and drawbacks and prioritized the options in terms of initial capital requirements, potential revenue, and other factors. We concluded that the quickest and most profitable route was licensing the patent to a large corporation. We reached out to our large professional network and quickly found a private consultant who screens all food innovation proposals for a Fortune 100 food service firm with restaurants around the world. This firm has been searching for a fast pizza process for approximately 15 years. Our client is scheduled to enter the firm’s lengthy and exhaustive due diligence process soon.
Staffing Agency (Chicago)
NASCAR Simulation Entertainment Business (Los Angeles)
Polymer Coatings Manufacturer (Chicago)
Wooden Furniture Manufacturer (Dallas)
Niche Insurance Brokerage (Chicago)
Gourmet Restaurant/Bistro (Ann Arbor)
Non-Profit Assisted Living for Disabled (Chicago)
Medical Device Design & Distribution (Specialized Splint) (Chicago)
Automated Limo Reservation System (Chicago)
Luxury Car Rental Boutique (Philadelphia)
Security Transaction Software & Hardware (Germany)
Wireless Internet Service Provider (Dallas)
Automated Apartment Rental Collection Service (Houston)
Private School Bus Service for Children (New York)
European Manufacturing Firm
Audio Visual Recording Company
Marketing Plan, Business Growth Consulting
High End Spa
Indoor Sports Facility
Physician Scheduling System
Market Research and Pricing Analysis
Wireless Internet Service Provider
Outdoor Advertising Industry
Business and Marketing Plan
International Fuel Treatment
Professional Services Business
Assessment and Business Plan
Language Translation Service
Business Plan and Consulting
Women’s Physical Therapy Clinic
For-Profit Genetic Testing
Business Growth Consulting
Niche Internet Music Site
Patented Pizza Process Business
Business Plans, Concept Exploration,
Market Research & Strategy