Your business model is great today, but where will it be next year? That’s where watching trends is really important. You need to know how to recognize a trend and how it is affecting your business.
Recognizing Negative Trends
Trends can be positive or negative. Of course, the negative trend is the biggest danger because it could change your business model by altering one aspect of the equation. For instance, a change in the tariff rate may send the raw materials market skyrocketing. That raw material is the very thing that is used to create the product you sell. Whether you are the manufacturer or just the broker, your business is going to take a hit.
Recognizing Positive Trends
If you miss a positive trend, you miss an opportunity. You want to be ahead of this curve, ready to jump on the chance. Entrepreneurs who act early are more likely to benefit as the trend travels upward. You position yourself to catch the wave. You alter your products slightly to match the new consumer market. Or, just as likely, you alter your advertising and social media. This puts you out in front of other companies that didn’t see change coming.
For example, wooden construction mats have been around since people figured out how to use wood planks to protect worksites. Composite mats came along much more recently. Contractors have figured out that the composite works better and potentially lasts decades.
Beware of Microtrends
The more you study your market, the more you may become aware of microtrends. These are not reasons to change your whole business model. If positive, they may look very enticing, but if you follow that path, you will actually work against your own success. If negative, they may look very scary, but you need to do more research to make sure that the trend is real, truly threatening, and truly here to stay. You don’t want to act too fast out of excitement or fear.
Recognizing Scams and False Promises
There are many dangerous rumors that can cause an entrepreneur to grab at the wrong thing. The most likely scenario is a financial one. Perhaps there are rumors that a certain stock is about to skyrocket. Perhaps there are articles promising a quick return on your financial investment. These rumors and promises are probably hollow. Recognizing that ‘free money’ is a scam is as important as following real trends.
Last, but not least, where do you go to determine these trends? Entrepreneurs must be savvy. They must find the most reliable sources possible. You want to avoid “going down the rabbithole” following rumors on the internet. Instead, go to trusted business news sources, and remember to be alert to sales copy.
If you are busy on social media, try to develop contacts who are in the know. Be alert to which people are genuine, which are just big talkers, and which ones are not to be trusted. If you use multiple sources, educating yourself every day on the state of the industry, you should become quite good at recognizing what’s real and what’s not.
Your goal should be to accumulate knowledge about all aspects of your business model. When you see a negative or positive trend that has real staying power, then you can act in your own best interest.