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Adapt to changing business conditions

January 02, 2013

As we approach the New Year, it is important to take a look at the industry and environment in which we operate. These days, due to technology, a business can pop up that quickly changes the way an industry operates. We need to keep reviewing the environment and better understand how new business, products, services, and technology can affect our businesses.

As we approach the New Year, it is important to take a look at the industry and environment in which we operate. These days, due to technology, a business can pop up that quickly changes the way an industry operates. We need to keep reviewing the environment and better understand how new business, products, services, and technology can affect our businesses.

For many years I managed large, autonomous retail stores both as a manager and district manager. The stores were in the building material industry and were multi-acre lumberyards with large indoor showrooms. The company that owned these stores was national in scope and started business 84 years ago. Now it no longer exists as a company. What happened?

What happened was the big box, warehouse type building material retailers like Home Depot and Lowes changed the industry for those pursuing do-it-yourself customers. We were unprepared for the change because we did not realize the industry was rapidly evolving around us. If we had carefully scanned our environment, we would have noticed how the customer preferences and methods of doing business were changing and we could have adapted to the change.

Instead, we were unaware of — or maybe we ignored — the changes in methods of doing business and customer preferences. As a result, the company had to liquidate its assets and go out of business.

How do you keep your company from suffering the same fate? The answer is simple but like everything else in business, difficult to execute consistently. The answer is to regularly scan the environment in which you do business, allowing you to understand changes in customer preferences, customer makeup, technology, and product or service innovations.

How do you scan your industry’s environment? First, attend trade shows and other venues that bring firms and customers in your industry together. They are often a hotbed of what’s new and different and can be on the cutting edge of changes in the business. Attending these events will give you a chance to talk to customers and competitors to get a sense of what is really going on.

Also, you can become a member of trade organizations related to your industry. These organizations are in business to provide members with the latest information and statistics on customers, trends, and new products and services. They can also provide information on the general economic, political and legal environment in which you do business. These same trade organizations often have online or hard copy publications that can give you up-to-date knowledge in these areas.

You will also want to scan the local environment in the trade area you conduct business. Seek out information about your local competition through visits if appropriate or through customers and vendors. This will keep you up to date on what they are doing. Take time to understand your local economic conditions and political events. Most importantly, regularly talk to your customers so they can give you accurate and informal feedback into their needs and wants.

In addition, the Angelo State University Small Business Development Center offers free brainstorming sessions for small business owners to help them understand what is happening in their industries. We have conducted dozens of these brainstorming sessions on various topics and most have added great value to the owners.

To notice the gradual or sometimes quick changes in your industry, it is important to regularly scan the environment. Doing so will enable you to stay competitive and continue as a successful business. If my former company had done so, I am certain it would have still been in business today.

“Business Tips” was written by Dave Erickson, Director and Certified Business Advisor IV, of Angelo State University’s Small Business Development Center. For more information on the topic of this article or the services of the ASU SBDC, contact him at David.Erickson@angelo.edu.

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    Dave Erickson, ASU-SBDC Director and CBA IV

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