There was a Wall Street analyst who said that Boston Market was not a restaurant company but a HIGH RISK LENDING company. How true. They failed to stay in business, by instead focusing first on selling franchises that dependably served food that instead of the usual too expensive was too cheap for what you got.
They delivered piles of food that tasted good with sides and filled restaurants but failed to secure profit in cash flow models. Building a brand is good, it takes capital, but for HOW long and at WHAT cost? Sell the franchises they did, but failed to figure a return OF capital not just return ON capital…
To get a handle on what business you are in, lets begin with a simple map. It helps to know that there are just six or seven fundamental major categories, or what in investment finance are called SECTORS.
Those can be divided into some fifteen or twenty parts and different analysts and constituencies have different ways of grouping them, but here is an accurate map based on nature, size, mass, speed, how virtual or concrete, durable or transitory the endeavor, etc.
The map certainly is not from a book, but synthesized from the last thirty years of my brain navigating a wide range of business territories, easily done nearly with my eyes closed:
The stuff that connects, communicates, and transmits is made up of, and the delivery and support of it:
Hardware, and Peripherals
Telecommunications, or Communications
Aerospace. Part of manufacturing proper, but really is technology
Taking care of our bodies with goods and services:
Medical including Doctor, Nurse, Hospital, Dental, Outpatient, Rehab
Discretionary spending on experiences, media, and other distractions outside material productivity:
Media (including broadcast, publication, and the commercial side of expression such as performance).
Travel and Lodging
Church and Charity
Not for Profit, Groups, Clubs
Stuff that is made which is sold and distributed either at commercial locations or by mail or fed by the internet.
Grocery store, also retail but a specialty
Mail order, catalog, distributor, aggregator/consolidator.
5. CONSUMER DISCRETIONARY
You cannot live without water or air, but you can live with out Coke or Budweiser, but some might disagree! Near instant point of sale with little planning needed or typically given.
Food and Beverages, Manufacturing
Consumer Non-durables, personal care products. Toilet paper is needed, yet comes and goes.
Restaurants and in particular fast food and chain are a special type of retail category, its all about discretionary.
6. CONSUMER DURABLES
Stuff you buy which will last. Appliances have yearly life cycles. Shopping is usually planned.
Getting serious here. Making big things that can take a little as three weeks or long as five years
Automotive, Transportation Manufacturing including truck, rail, boat.
Home Building and Housing
Commercial and Heavy Construction, including earthworks and road building
Defense is almost one and the same with Aerospace, but fits better here. Big ticket, long term. Capital intensive.
IV. HEAVY INDUSTRY
8. Basic Materials
Stuff found, made, or extracted, often heavy or in bulk. Takes large scale infrastructure.
Chemicals, Specialty Chemicals
Oil and Gas
Utilities, in particular electric production and transmission.
Getting stuff around.
Bus, cab, public transport
Stored, abstract human energy which is redistributed. The concomitant of energy or fuel is finance.
Mortgage and Loan
13. PROFESSIONAL SERVICES
Human activity. Not physical production. Knowledge work, administration, project management. Planning.
Engineering and Architecture
Staffing, outplacement, Labor, Human Resources
Local, Township, City, State, Federal bureaucracy
Mental Health and other Social Serives
Police, fire, EMT, rescue
Military, CIA FBI, NSA, Homeland Security
15. FOOD PRODUCTION