Business Development Specialists

I have been a resident of Sedona for twenty-two years.  During that time I have watched the community grow and essentially put all of its eggs in two economic baskets, tourism and real estate development.  There is absolutely nothing wrong with encouraging and supporting those industries.  In an area as beautiful as greater Sedona, they are naturals.

What strikes me as a missed opportunity is the lack of attention to the development of light industry.  Just as our community is well-suited to tourism and real estate development, it is a natural for light industry.  More about that later, for now, let’s define “light industry”.

Light industry is usually less capital intensive than heavy industry, and is more consumer-oriented than business-oriented (i.e., most light industry products are produced for end users rather than as intermediates for use by other industries). Light industry facilities typically have less environmental impact than those associated with heavy industry. It is the production of small consumer goods.

One economic definition states that light industry is a "manufacturing activity that uses moderate amounts of partially processed materials to produce items of relatively high value per unit weight".  Examples of light industries include the manufacture, marketing and distribution of clothing, personal care, household items and nutraceuticals.

Sedona’s reputation as a tourist destination, art and culture center provides many opportunities to export little “Touches of Sedona” to the rest of the world via light industry.  More importantly, it provides our community with the opportunity to diversify the economy and produce higher paying jobs, with little or no impact to the environment or the aesthetics we all treasure.

I am a veteran of the consumer products industry.  In fact, I moved to Sedona to start a nutraceutical product development company called Nutriscience.  We developed new brands and over $1.6 million in dollars in sales in less than two years.  The brands were successful enough that one of our investors, General Nutrition Centers eventually bought our small company.
 
In December of 2008, a Cottonwood, Arizona Company called Nutri-Health was sold to a Canadian conglomerate for over $23 million.
 
While I have cited two Nutraceutical companies, they are only the tip of the iceberg.  The beauty, art, culture and reputation of Sedona provide limitless opportunities to development a diversified, green and sustainable light industry sector in Sedona and the Verde Valley.  We invite you to join or discussion by sending an email with your comments and ideas to bdsnews@bizdevelop.com or posting a comment on our blog

Best regards,
Bill Ellis

·         Don't cut back on advertising and promotional budgets.  Studies have shown that during an economic downturn, companies that maintain, or even increase, advertising spending outsell those who cut back.  If you must reduce expenditures, then increase your advertising  effectiveness.

·         Try not to scrimp on service or lower quality standards by being understaffed.  If you do cut back on permanent staff, consider outsourcing to consultants and freelancers.  Using consultants and freelancers is a cost-effective option in both bad and good times.  You only hire them as and when you need them.

·         Consult with your employees.  They need to feel important to your company and they may have valuable cost-cutting ideas that may help avoid a lay-off.

·         Talk to your customers.  In a downturn, they are your lifeblood.  They often make the difference between being in or out of business.  Visit your customers and ask them what you need to do to improve your products and your service.  If possible look for ways you can help them to cut costs.

·         Offer new deals and terms.  For example offer discounts to customers willing to sign long-term contracts or pay cash in advance.

·         Develop ways to expand sales to existing customers.  For example, establish a pricing structure that encourages volume purchases.

·         Stay close to your suppliers.  It is vital that a close relationship is in place between you and your suppliers, particularly if the partnership is to survive the dramatic changes in plans that may be necessary during a downturn.

·         Seek out new business.  Don't fall into the trap of believing that everyone is cutting back, so there is no point in looking for new customers.  Consider adding to your sales force rather than cutting.  Establish sales coverage in new geographic areas not currently covered by the company.  Use sales agents, on commission to open up international markets.

·         Diversify and Innovate.  Avoid keeping all your eggs in one basket.  Develop complimentary products and services.  That way you will be less vulnerable to a downturn.  Nike, for instance, now offers watches and radios to runners, not just running shoes.

·         Develop new products and/or new uses for old products.  You will keep your customers interested and excited about your products and services, and you will keep your team excited and motivated.

Many established small businesses are surprised to discover that they do not need to advertise to prosper. A large majority (more than two-thirds in the ) of profitable small businesses operate successfully without advertising. Instead, they rely on personal connections, reputations, and sometimes on sales people or commissioned representatives. There are four main reasons why advertising is inappropriate for a small business:

1) Advertising is simply not cost-effective. Claims that it produces even marginal financial returns are usually untrue.

2) Even when advertising produces enough paying customers to justify itself, customers lured by the ads tend to be disloyal. In other words, advertising does not provide a solid customer base for future business.

3) Dependence on advertising to get new customers is often actually debilitating to a business, making it more vulnerable to changes in volatile consumer taste and thus more likely to fail.

4) Since a significant percentage of advertising is deceptive, advertisers are increasingly seen by the public (both consciously and unconsciously) as dishonest and manipulative.

A great tip for small businesses to consider is that they should start off small, using simple techniques and personal connections in order to create strength a certain brand.