It remains very important for small business owners to keep up to date with what is going on in their target market(s). It is easy to lose sight of the big picture in the battle to keep your business going. However, being forearmed with the knowledge that some change is in the pipeline means you can anticipate its impact and reposition your marketing activities to help defend your existing market share. With luck, you will also grow your market share by taking advantage of any competitors who fail to respond to the imminent changes in market conditions.
The last thing you want is to fail to spot an upcoming change only to find out when it is too late, after all your competitors have learned of the change, modified their products (if necessary), tweaked their marketing campaigns and who are now growing their market share at your expense.
Keeping your fingers on the pulse of your target markets can, however, be a time-consuming exercise so it’s worth exploring the different options open to you. Your clients and prospects are a useful source of information but anything you hear from such sources will need to be investigated more fully before you can assess its implications for your small business. The Internet provides a wealth of data, the only challenge is finding what you want from reputable sources without being distracted by all the misinformation you will come across.
Internet searching is one activity you could probably delegate or outsource so you only spend time evaluating the more interesting issues.
If you are selling to a relatively small geographical area, look at what similar markets in other countries are doing. You might pick up trends in these markets that will indicate how your own markets will develop in the coming years.
Many industries have annual exhibitions at which major suppliers demonstrate future product ideas. Not all prototype products on show will make it to production but for industry insiders it gives a good indication of how the major suppliers see the industry developing. If these exhibitions suggest significant realignments of the markets you serve, you should start evaluating how your business will be impacted and how you can reposition your business for the future.
Many market changes and trends are caused by Government policies, directly or indirectly. Governments spend vast sums of money which results in orders rippling down to even the smallest supplier. A change of policy could lead to those small companies operating at the bottom of this hierarchy of suppliers encountering serious stresses.
For example, if you are selling to the major defence contractors, your business could be seriously affected if Governments around the world cut back on Defence expenditures as a result of, say, a deep recession – as has recently happened in Europe.
As a direct consequence of such an action, your target prospects – the major defence contractors and their main suppliers – will hit hard times as Government order volumes are cut back. This will reduce the amount of business that will flow down to the smallest businesses in the supply chain.
If you were one of the small businesses, you could either move into new markets or drive costs out of your own operation and survive on a much reduced sales volume. In this example, the reality is that purchases of defence equipment would continue but these would be for lower volumes and, of course, at lower prices.
If you were monitoring trends in your target market and spotted such a change on the horizon, you would have time to reposition your company’s activities to capitalise on the new environment.
If you were to drive out costs from your business, it might be possible for you to remain profitable on lower sales volumes.
Alternatively, with signs of the anticipated slowdown in the Defence sector, you could respond by expanding your business into one or more new markets. At the point sales volumes in the Defence market drop, you should have other avenues into which you could divert your sales efforts to maintain your overall turnover and profitability.
The key benefit that small business owners gain by continually monitoring trends and issues in their markets is time. When market changes are identified, these informed businesses have the opportunity to mitigate any negative impact on their operations.
Of course, market changes may be identified that will be advantageous to your business. Knowing this early means you can maximise the benefits by getting ahead of your competition.
- Research the main sources of information relevant to trends and issues in your target markets.
- Establish a process for monitoring these sources on a regular basis. Automate or outsource as much of this as possible.
- Make time to interpret what you find and assess its impact (if any) on your business.