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4 Key Analysis Points

By: Benjamin Newlon

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Agenda

Understanding the market

Financial statements and trends

Marketing

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Widener Small Business Development Center

17 Centers in Pennsylvania

Mission: To help businesses start, grow, and prosper

Funded by the Commonwealth of Pennsylvania, the U.S. Small Business Administration, and Widener University

The SBDC provides assistance to both existing and start-up businesses

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Specialty Services

INFORMATION RESEARCH ASSISTANCE

GOVERNMENT CONTRACTING

ENVIRONMENT MANAGEMENT

INTERNATIONAL BUSINESS

COMMERCIALIZATION OF NEW TECHNOLOGY

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Understanding the market

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Data Analysis

Management Consulting Financial & Market Report Ratios

Interest coverage

Immense decrease represents increase in expenses of harboring bad debt or decrease in net worth

Current liabilities to net worth

Indicates increasing current liabilities or decreasing net worth

Fixed assets : net worth

Represents an increase in the percentage of net worth that is carried in the form of fixed assets

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Data analysis�industry Employment

  • Businesses stage employment levels
  • High over time, starts off small
    • Economies of scale
    • More consultants > more revenues > more consultants

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Data analysis�industry Market Share

  • Established businesses claim ~ 70% of industry volume
    • Due to differences in efficiency; the cookie cutter dilemma
      • Specialization
  • Small businesses and startups receive remaining ~ 30%

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  • Startup : 0 – 2 years
  • Small Business : 2 – 5 years
  • Established Business : > 5 years

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Financial�trends

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Talking Point

DO NOT get caught up in the exact numbers

Take the general story the statement illustrates

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Financial trends�income statement cost structure

Cost of sales – Labor portion

      • MC firms are spending less on employee wages

Operating income

      • Lower operating income means MC firms are having to do more with less

EBITDA

      • Declining EBITDA indicates that MC firms are becoming less profitable

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Financial trends�Balance sheet structure

  • Cash
    • Influx of cash with increasing liabilities means new debt

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  • Net worth
    • Net worth increases as firms become more valuable due to new revenue streams

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  • Receivables
    • MC firms are realizing more business as the market favors established firms

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Marketing

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Marketing Strategy

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Steps to successful marketing

  • Developing a personal brand
  • Determining your target market
  • Creating a professional website
  • Growing your social network
  • Build your support close to home
  • Take time to network

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SBDC Market Report

Individual market report

Extended detail

Comes with market comparisons

Compare yourself with competitors