One of the most challenging things a small business owner will encounter is keeping current with their market. We have a tendency to get tunnel vision and think we have all the bases covered. Think about it—you build a brand, and a business. You think you have a firm grasp on your target market; who they are, what they need, how you help them succeed. The danger here is that your market might change, the economy might shift, technology might impact your industry. If you aren’t maintaining a ‘one-step removed’ view of your business, you could miss the signals and therefore the opportunities.
Look at what happened to Blockbuster. They were king of the hill for the longest time. Hollywood Video came in as standard competition. This was something Blockbuster knew how to deal with; it was familiar. And then Netflix entered the scene. Nothing remained the same. The video rental business seemed to shift on a dime.
In an article for CNET.com, Greg Sandoval shares that, “In 2000, Antioco [CEO of Blockbuster] had dismissed Netflix. Hastings [of Netflix] had flown to Dallas and met with Blockbuster management to propose Netflix run their brand online. Antioco's people laughed at them. But by 2004, Antioco and Blockbuster knew they were in for a fight. In 2005, Blockbuster Online engaged in a price war with Netflix, as well as with Wal-Mart's competing service.”
So, what really happened? Blockbuster didn’t pay any attention to the rise of the Internet and its advantages. They didn’t expand their thinking outside of the world they knew so well. They never took a ‘one-step removed’ view of their industry to see what was coming down the road. By the time they paid attention, it was too late. They tried to adapt their product to meet the new reality but they “didn’t come on strong enough or soon enough,” according to an article by Megan O’Neill of the Social Times.
This is a prime example of a company not paying attention to its market or industry–and this was a major corporation. When this happens in small business it is equally as crushing. The tail spin is close to, if not impossible, to come out of.
So, what can you do avoid this kind of situation? You pay constant attention to your current clients, prospects, target markets and industry. You watch for global changes to technology, markets and processes. Your job is to always be ahead of the changes—watching for emerging target markets. Don’t become complacent with where you are. Consider the opportunities that might exist outside of your norm.
A great example of this is the Scott’s company in Marysville, Ohio. Being in business since 1868, they’ve experienced some interesting times. When the economy goes south and clients start to dwindle, it’s easy to get stuck. You ponder how you can penetrate an ever-shrinking prospect pool. If you have one or two major clients that scale back in their purchases it can be devastating to your bottom line. You can blame the economy all you want, but at the end of the day, you need to expand your thinking and find new clients and new markets to penetrate. That’s exactly what ScottsMiracle-Gro did when they decided to pursue the medical marijuana industry.
Norm Van Ness of Toledo’s WNWO tells us that Chief Executive Hagedorn sees it as one of many new avenues to help boost sales in the future. And while Medical Marijuana might not bring in the big bucks like grandma's award winning tomatoes, niche markets that would have been ignored before are now in play.
"We can't operate our business like that anymore," Hagedorn said of the move, and has urged his regional sales presidents to look for smaller pockets of growth.
“Look for smaller pockets of growth” is a great mantra that all small businesses should adopt. The opportunities are out there. It’s your job to find them. First you have to be open to the idea that they exist. So, take a step back and look at your company from a different, broader stance. Keep an eye on possible target markets as well as changes in technology, the economy and markets that might impact your business. And be prepared to make a change—before you are forced to play catch up.
Entrepreneurs are natural possibilities thinkers. This is one of those areas where it is critical that you maintain an eye toward possibilities. Keep your finger on the pulse of your industry and the buying habits of your clients. Get educated about the changes that occur—when they occur. Monitor their possible impact on your business. And adjust, adapt and expand your thinking and practices to maintain a healthy organization.