Target markets and products

BY MATTHEW D. MOHR

Upon reviewing results for the previous year it is usually helpful to determine which products succeeded and failed along with what customer segments provided growth and which contracted.

Uncovering product successes in conjunction with customer successes should help establish viable targets and propel a business into bigger success. Most established businesses do this exercise continually. Along with product and customer success, profitability needs to be evaluated. A business may grow dramatically with one customer or product line, but do so unprofitably.

Sales success (growth) is exciting, but if done without contributing to profit such growth is a recipe for disaster. Few successful entrepreneurs will embark on a rapid growth strategy without paying attention to the costs and profits. Growth at any cost generally leads to business failure. Growth in revenue along with improving profitability is business success.

In our region today a transportation firm could grow dramatically by cutting prices to move oil in the western part of the state, but the cost of finding employees and paying for necessary equipment would likely far outweigh the revenue generated. By looking at the growth potential only, an unsophisticated transportation enterprise might put a lot of resources into this market, which could turn out to be a disaster. On the other hand, a more intelligent business initiative in the transportation of oil might be to target specific customers while using existing resources enabling both profit and revenue growth.

Every business and every market is different and may be challenging every year, but choosing what and where to put efforts can enhance the results of any enterprise. PB

Matthew D. Mohr CEO, Dacotah Paper Co. mmohr@dacotahpaper.com

Chad Rettke