business-plan, seasonalI’m thinking of starting a Christmas tree company (I’d be a middle-man between lots and consumers), and I’m trying to plan out my business for next year.
My question is likely–like many–much more easily asked than answered: how can I predict how many trees to cut?
I know this is a big question, and I’m not looking for an exact answer, but mostly I’m curious of what methods I can use to make good estimations. I know similar cases might happen in restaurants, or even perhaps some tech companies that pay for web hosting in advance.
If I take a guess at the answer, I’m thinking the best option would be some statistical analysis of the market (like how many people typically buy trees), but I’m not even sure what I would do with that number. I’ve thought about asking casually at lots or other resellers, but that seems awkward and potentially offensive (since resellers are my competition).
I don’t want to undersell my business here, but ultimately I’m not sure how much value I’m bringing to the table that competitors aren’t. I’m not dealing with a startup in the sense of going in on ground-breaking research that changes the world. But by the same token, I don’t think my competitors have much advantage over me. It really just comes down to location, which is why I’m starting to wonder whether my best bet might be to look at the relationship of how many trees are sold annually in my area, as well as how much traffic the parking lot I’m looking to set up in actually gets. But are there other variables I should keep in mind?
The main edge you have over your competitors is flexibility. As soon as you commit to an answer, you lose that edge, and you’re left with the same variables as they have on which you have to execute better.
To apply some startup thinking, there are two main areas of opportunity.
First, can you sell (at least a proportion) before you have to fulfil the order?
Second, can you act in a way that will increase the total sale value to each consumer?
Answering those questions is all about getting to know the market. If it were me, I would find what schemes apply locally for disposing of Christmas trees after the holidays, and ride their coat tails to make connections with potential consumers.
This isn’t an exhaustive list, but just some thoughts to get you going, as you think about doing some customer development (i.e. engaging with real consumers and getting to know their problems). Consumers might value:
Selecting tree types and characteristics online
A service that delivers their tree and collects it for disposal
A range of stands to hire or buy
Themed decoration sets
Being able to gift a tree to someone
Being assured their purchase has a positive environmental consequence
Right now you can be learning from the competition just by seeing how they describe, price, sell and package trees, what other products and services they offer and so on. You don’t want to be constrained by what they are doing, but you can shortcircuit a lot of the work. Do ask questions. In busy times, you can ask simple questions that can be answered in one or two words: some sellers will just give you an answer, because that’s easier than getting into conversation. In quiet times, you can strike up a conversation. Some people will open up a lot. If they don’t, you’ve lost nothing. And get contact details: these people may be competitors, but they could be your customers, or they could be your channel.
At the end of all this, if you work hard, you could have a contact list of prospective customers, an idea of what might make a Christmas tree seller stand out from the crowd, and some first hand knowledge about what’s easy that looks hard, and what’s hard that looks easy.
At the end of that, you may just do what you already have in mind. Or you might find yourself mapping out very different paths. The good news is that industries untouched by innovation present great opportunities: your job is to find them, then position yourself exactly where you can take best advantage.
All content is licensed under CC BY-SA 3.0.