How does it feel when a good situation rapidly turns uncertain? You may have had a steady paycheck, contract, or supply chain with a large “reliable” company, institution or government. After watching large gatherings, contracts and jobs vanish on short notice due to coronavirus, you are unlikely to ever take these things for granted again.
The spread of the virus and its effects on the economy and business landscape remain unresolved. If you are alert, there are success opportunities everywhere. Let’s look beyond the obvious demand for protective masks and hand sanitizer, and figure out some other re-positioning opportunities.
To stay ahead of the curve, and your competitors, keep a sharp eye on the following.
Leading economic indicators
Leading economic indicators indicate changes that are about to happen in the economy. They are used by the world’s largest banks and investment firms. Change in any of these will provide clues of the economy’s general direction, and where your opportunities or hazards may be.
- Inventory Changes
- Building Permits
- Stock prices
- Unemployment Claims
There is a vast amount of real-time data available about companies on major financial news sites. For example, inventory changes are affected by manufacturing activity this month. Manufacturing activity this month, which can be seen here, is an accurate predictor of retail activity next month. If there is a manufacturer in your space, track them to see if they are increasing or decreasing output, because that will affect inventory and prices of retailers. It also affects retail profits, expansion, and employment, as well as businesses that serve retailers.
How could manufacturing and inventory changes affect your business?
Building permits are an accurate predictor of construction activity and associated employment and subcontracting. It also predicts subcontracting employment and real estate values. Track building permits here.
How could construction activity affect your business?
Unemployment claims, seen here, provide clues about the direction of consumer spending. The more people on unemployment, the more we can expect consumer spending to be reduced to essentials. When there are fewer people making unemployment claims, it is a good for discretionary spending, such as restaurants, travel, and leisure.
How could the unemployment of others affect your business?
When it comes to stock prices, don’t just look at the Dow Jones Industrial Average or any other index. Use a reliable financial news service such as CNBC or Bloomberg (subscription-based) to track specific companies that are either in your space or have a direct connection to your space. If shares of these companies are traded publicly, as in on a stock exchange, their books are available to the public. Track the share price movement. Read the financials. Is revenue increasing consistently? Is it decreasing consistently? Do they have a high level of inventory? If so, that is a sign that they are having difficulty making sales, which is reason for banks to deny loans. The financials reveal many clues. Get to know certain companies cold!
What could stock prices tell you about the direction of your business?
Also, watch transportation companies such as truckers, freight and cargo companies, as they are usually the first to experience changes in the economy. Additionally, watch the airlines, and all industries that serve them. Track transportation activity here.
What clues could freight and cargo movement provide for your business?
News media, and how people react to it
While less scientific and precise, human emotion is predictable and drives economic activity. Watch when people are greedy, and watch when they are fearful. When they are greedy, as in buying stocks and real estate at inflated prices, trouble is ahead. When they are scared, look for opportunity. Warren Buffet famously advised, when they are fearful, be greedy!
Mass fear means mass problems. And mass problems are an opportunity for great rewards for businesses that solve them.
Sign onto social media and join groups and pages that are in your space, or the space of your customers. It doesn’t take long to discern how people react to the days’ news. Are a lot of people panicking over news or economic developments? Are they bragging? Do they appear confident in their own economic or business survival, or not? Or, does a particular news story posted on social media get very little attention?
What could social media show you about the psychology of your customers?
Twitter has a feature here that yields many clues. Type a hashtag followed by some relevant words. You should see some hashtags autocomplete. These are trending hashtags and therefore a great clue about trending social media posts. That is a great clue about people’s current thinking.
Use Google in a similar way. Put yourself in the shoes of your customers and ask questions they might ask. The search window will tell you if you are right. Start typing a question or phrase and see how Google autocompletes it.
What insights could you gain from hashtags and autocomplete?
Now, you have a few clues you didn’t have before. Let’s re-position your business.
Many large businesses were a little slow to retool operations after coronavirus-related disruptions, but some have answered the call. Louis Vuitton is now using perfume manufacturing assets to make hand sanitizer.
And some small businesses have re-positioned as well. Garb2Art of Columbus, IN is a cosmetics business that was recently profiled on CNBC. They were able to quickly pivot to manufacturing hand sanitizer. As a result, are having their best year ever, according to the company.
If you are just now considering making hand sanitizer or medical masks for coronavirus, don’t start. There will be plenty of supply soon, maybe even an oversupply. That wave has passed for now.
But there are more waves coming that you can catch, so get the surfboard ready. Be operationally flexible and plan the next change now. Here is a checklist.
Do you feel you can stay out of court?
In case you have not registered your business as a corporation or LLC, consider doing so. If you are unsure as to which one is better for you, watch this video. Setting up as a separate entity professionalizes the business, separates business and personal assets and liabilities, and provides liability protection. Do it! Whether it is incorporation, LLC, small business contracts, bankruptcy, or intellectual property, the attorneys of OneClickAdvisor are ready to answer your questions. Just contact us here. For more small business law and business planning, much of what you need is can be found here.
Are you well-planned?
Do you have a business plan? Yes, you will need one if you are looking for money from investors. But most importantly, it is for you. Business plans enable you to game out scenarios and make your mistakes on paper instead of with real money. Good cloud-based software makes it easy, and fun. Just let the program walk you through, answer the questions, and save or print your work. OneClickAdvisor devotes a great deal of space to helping with business planning. Learn more here.
Bring in the customers!
Small business marketing is a vast subject, but as a foundation, get the “Four P’s” as right as possible. They are price, product, promotion and place.
Novice business owners price too high or too low. In this free video, OneClickAdvisor turns a convenience store into your classroom. It will answer your questions on how to set prices so that you meet your expenses and make a sufficient profit.
What product should you sell? We can’t answer that for you. But there are problems that you enjoy solving for other people. What are they? If you still need hints, see the graphic below or try dropshipping. InventorySource or Spocket are two leading dropshipping sites that could provide an online “business in a box”.
Promotion mystifies people. It can be done through a variety of low-cost ways. E-mail marketing is a good tactic IF you have an online business. Public relations, if you have the skills, builds credibility that advertising cannot.
The place has to be right. Whether online or not, you have to be convenient and available to your market. To be near your market online, you have to publish good content as often as possible. Answer your customers’ questions. As far as where to locate a physical business, there is an art and science to it. Your state’s department of transportation may actually publish daily traffic counts online, easily found via search engine. That is good, free business intelligence.
Keep the customers!
This is all of the systems necessary to run your business smoothly, pleasing your customers and generating steady revenue for the business. Detailed guidance is available to help you create great systems.
Don’t forget to compensate yourself. You will need payroll services, health insurance, benefits, and even help staying compliant with employment law. Gusto is a popular platform that helps you run human resources and compensation like a much bigger company.
Do you need a toll-free number, or international phone service, all forwarded to your cell phone? There are options for that as well. You also need point of sale systems that generate reports of your sales, because that data will tell you if you are or are not on track. This helps you to refine your marketing.
You don’t need an MBA to understand it. But you do need to know what your business will cost every month. This includes all of the compensation necessary to support your team, and yourself.
While planning for marketing, operations and finance is not in any particular order of importance, we mention it last. Why? Because when it comes to planning a business, the golden rule is to never chase money before first solving a problem.
There are many ways to obtain financing for your business. Most of them do involve a personal credit check of any owner of 20 percent or more of the business. However, before proceeding, you can shop for business financing without a credit pull right here.
Keep good books. The best managers have the information they need at their fingertips. It is a valuable part of your plan. The flows of money in and out of your business give you the insights you need to manage and grow the business effectively.
How did you do today? This week? This month? Finance is the scoreboard of your business.
Ah…we almost forgot. Money may be tight, but that doesn’t have to stop you from starting a new business, or a new direction. Here are some relatively easy ways to build your next empire.
OneClickAdvisor is available to answer your questions.
For more information, contact us anytime.