The temperature spiked almost 15 degrees this past week. My two youngest daughters are avid soccer players. They train three times a week while preparing for their upcoming fall season. Before leaving for practice, I changed their water bottles to insulated coolers that were twice the size. The girls voiced their disdain of the large heavy coolers, but I pressed on. After practice I checked their coolers, and they were both practically empty.
When the heat goes up, you need more water. As the environment changes, we must change or adapt in order to remain healthy and survive. Business is the same way. Your business is facing changes that you must adapt to in order to survive and flourish.
Lets look at four of the major changes you may be facing.
1. The Economy
We are all affected by economic climate changes. As the economy slows down, there are fewer dollars chasing products and services. Additionally, people read the newspaper and panic when they see negative headlines. All of this can mean less business for you. What do you do to deal with this situation?
Cost containment is always smart business. Watching where your money goes is important in a good economy, but it is imperative in a weaker economy. Evaluate all purchasing decisions. Are they necessary or luxury expenditures?
All to often I see business people cut out advertising, education and training, or marketing expenses. These are the lifeblood of your business. Before you eliminate something, be sure that you fully understand the consequences. Short-term savings and long-term losses are not the goal here.
When other companies are cutting back, some successful organizations actually increase their advertising efforts in order to get a larger market share. Adapt your spending to manage changes in the economy, but make sure you are not undermining your long-term business plans.
When the economy is expanding, you may need to adapt your spending in order to take advantage of broader opportunities. It is important to grow your business when markets are strong so that you are in a position to weather the weaker economic conditions.
2. The Competition
If your competitors are aggressive, they will constantly be trying to improve their position in the market. They will change their product and service offerings, the packaging or bundling of products and services, pricing, and even their branding efforts.
Everything your competition does can have an impact on your business. I don’t believe in running scared or just reacting to the competition, but it is important to be aware of what they are doing, and strategically think about how it may affect your market positioning and business plans.
Are there product and service bundles that are creating competitive advantages for others? How does your warranty compare to what your competitor is offering? Is your competition changing the way that they price their products and services? All of these factors can and will affect your business.
Monitor the changes that your competition is making, then decide if you need to react and what the most effective adaptations would be.
3. Your Clients
It’s hard to believe, but your clients also change. Their needs can change as individuals. As a group, customers can become more educated and require different sales information or, need to be handled differently.
Stay up-to-date with your clients. Know their needs and anticipate future changes in those needs. In some industries clients have predictable life cycles. In the life insurance industry, for example, the needs of a single person are predictably different from a newly married couple. The needs of a middle aged couple with children out on their own are predictable as compared with others in that same age group and economic situation.
If you are in real estate, you may be able to anticipate the need for an elderly couple to move from a high maintenance home into an easy-to-care-for condominium. By anticipating that need and contacting your client with a suggested solution you would have the chance to make the sale.
Don’t wait for your clients to come to you with changes, or worse yet, go to your competitor because they better anticipate the client’s needs. Communicate with and plan ahead on your client’s behalf, so you can adapt as they do.
4. The Market Place
You may have to deal with changes that a single competitor makes, or you may have to deal with entire market shifts.
When I started out in the window and door manufacturing business, the standard industry insulated glass warranty was five years. The industry standard went to ten years, and a few years later moved to a lifetime warranty. These were changes taking place across the entire market and we had to adapt.
Your market may shift because of the internal influences of your competitors, or because of external forces such as new technology being readily available to everyone. Certainly, the internet has impacted most industries today. You must adapt to changes like this.
Market shifts may mean that you need to think about offering new products and services. You may be forced to adapt your business in such a way that it looks totally different next year then it looked last year. Someone in the horse and buggy business would have had to adapt to the advent of the proliferation of the automobile, or they would have been put out of business in a very short time.
Sometimes, people are afraid to change. They hold onto old successes and old habits. When the forces that are external to your business change, your survival and success may very well be tied to your ability to adapt.
For centuries, human beings have adapted to changes in climate, science, technology, and medicine. Be accountable for your proactive thoughts, actions and results. Keep your business growing and prospering by adapting when necessary, and you will be on the road to Building a Better Biz!