Monday, February 16, 2015

Moving on

      Free daily tips, information, advice, and ideas
      to help you better manage your small business.

     A business is a living thing. The baby is born and begins to find its way in the world. Just as a parent nourishes and guides the child into maturity, your business needs feeding and guidance. 

     Businesses tend to move in a certain direction. It's determined by the marketplace. If people are buying certain types of shoes, your shoe shop will naturally stock the shoes that sell. If homeowners no longer want wallpaper on their walls, you begin to specialize in painting walls. If car buyers no longer want station wagons, the manufacturers stop making them.

     So the marketplace pulls businesses in one direction or another. The marketplace can turn a nutritionist into a weight reduction specialist. A gift shop can become a cooperative for artists. A local baker can close the bricks-and-mortar store and concentrate on selling only brownies on the Internet.

     The marketplace is a restless beast. It's constantly changing. You cannot jump in every direction that opens up. You must choose, based on most likely outcomes--and your own business plan. Is this new direction enough to support your business? Is it a passing fad that won't last? Does it represent a permanent change in direction for the marketplace?

     Example: Ralph has been repairing televisions for more than 40 years. He also repairs stereo systems, VCRs, and other electronics--but not computers. Several years ago he noticed more and more people bringing him stereo systems. He thought those days were long gone, but he looked into the market. He found many people who had LP music collections, and they needed a way to play them. He began putting the word out on social media and attracted lots of paying customers. They came for repairs and they also came to sell their old systems to him. He now offers old stereos for sale, and he has largely transformed his old TV repair business into his new shop offering stereo systems and repair. 

     More examples: (1) Cars once had hubcaps. They were supplied to vehicle manufacturers by small companies. Then, suddenly, hubcaps disappeared. (2) Several years ago, gluten-free foods were unheard of. Today, they are everywhere. (3) High-maintenance lawns once kept landscapers busy. Then, the wildflower look attracted many homeowners. Lawns became passe. (4) Clothing cleaners today must be prepared to deal with clothing impregnated with micro-deodorants as well as wicking weaves in garments. (5) Small machine shops still turn out products needed by big companies, aerospace, health care industry, manufacturers, and more. Today, 3-D printing technology is making rapid gains, displacing many of the older machine shop methods. (6) Big companies today depend on smaller firms to furnish temporary placement of personnel--engineers, accountants, and other specialists are hired only for a particular project instead of adding permanent employees. (7) Primarily due to government regulations, many more part time employees are added today than in the past. 

     Market forces are everywhere. They continually change and they affect your business. Keep on top of the market or you might be blindsided. Changes in technology tend to unfold in the marketplace very rapidly. The resulting tsunami can wipe out a small business overnight.

     Don't be caught unawares. The market can cause you to inch off in a direction you might not want. On the other hand, the market can alert you to future directions you can take.    

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