Many entrepreneurs fail to notice the subtle signs that their products or services are becoming obsolete. When they finally take note, their once thriving enterprises are in jeopardy. Ensure that your small business flourishes for years to come by taking notice of the following telltale signs that your company may become irrelevant.
1. Shift in Trends
With technology changing at the speed of light, shifts in trends are inevitable. Although many dramatic instances of such shifts are easy to foresee, such as the demise of video stores due to the popularity of internet video services, other shifts are much more subtle.
Keeping abreast of the changes in your industry, however slight, will alert you to when it’s time for a change of course. Stay informed about new laws and policies that could potentially affect your business, even tangentially, and take trends seriously, no matter how silly or unlikely they might seem.
When you do note changes that might affect your business, ask yourself “what if” questions. For instance, if you’re a pool builder and a new mandate limiting residential water usage is being considered, think about what you could do to shrink the size of your pools, or if you should start concentrating on the hot tub end of your business.
2. Drop in Sales of Key Products
A big drop in sales is an obvious sign that something is very wrong, but this rarely happens. Generally, the drop is slow and steady and may go undetected for some time. Keep an eagle-eye on your sales figures. Analyze even the slightest declines in sales and ask key questions about the reason for the dip. If you can’t come up with a valid reason—such as a problem with a specific shipment or a temporary lack of supplies for processing products—then suspect that there’s something more serious going on and determine what it is.
3. Customer Requests
When your customers begin asking for products and services that you don’t carry or provide, this may be a sign that it’s time for redirection. Keep track of all comments made by clients verbally and through written communication and check on review sites to see what is being said about your business. Look for trends and common threads and use these to determine next steps. Consider sending out regular surveys to customers in order to get feedback. Those surveys are likely to yield gold nuggets for ways to expand and improve your business.
4. Lack of Direction
Take a hard look at your company and be brutally honest with your self-assessment. Is passion and purpose still driving you like in the early days? Does your business continue to move forward despite impediments and setbacks? Do you do whatever it takes to reach your goals? Or have you become somewhat aimless and unsure of your purpose?
A good test to determine whether your company possesses a clear direction is to ask employees. Quiz them on what they feel is the purpose and mission of the company. If they can’t come up with an answer or they all have very different responses to this question, you have a direction problem that needs to be addressed as soon as possible.
Becoming comfortable and assuming that a product or service will always will be popular is pure fantasy. Many companies with a “sure thing” have fallen into obscurity. Avoid this happening to your business by maintaining humility even in the face of soaring success. Remind yourself that there are always competitors, and some may be close to catching up with you. You certainly deserve to be happy about your success, but always strive to do even better.
Running a small business today is no easy feat. If you’re willing to open yourself up to inevitable change and reinvent your company when necessary, you’re bound to remain relevant and experience abundant success.
I have to concur with Mike Shanok about collecting problems from attorneys. We also have the same issue with many national contracting companies that hire us for local work. They typically don’t pay for 60-90 days or worse. We lower our rates to get their business and then they float their payments to us for as long as they can. It’s almost not worth being in business anymore.
Collection practices don’t work because they either ignore it or just make payments in time to get additional services from us. We can’t really afford to drop their accounts. Any recommendations greatly appreciated.
Thanks for reading, Kim!
I found this article to be quite helpful. I own a Home Care Business and I have seen such drastic changes over the past few years. Thanks for sharing!
Thank you for reading Lynette!
I do not follow trends because my products don’t fall within trends. My products are timeless and my customers, though few and far between, are out there and I just need to expand my advertisrments, but that is very expensive. I’ve done print ads in magazines related to outdoor furniture and usually get zero response. I’ll be trying radio ads next and see how that flies even though that is also expensive. We’ll see.
Awesome wake up call for business owners!!! Thank you!!!
Thanks for reading, Rhonda!
I have a one man shop making metal sculpture. Marketing has always been a tough one for me. Love the switch from chemicals to digital in photography. That is to the plus side. I have a hard time keeping up with social media. How to find out about it, how to use it and profit from it. There is also the fact that I have moved from my base of over 30 years and now need to rebuild in a new place. Ever onward. I need to connect with a social media Guru. Working on it.
Hey Mike, I’ve linked one of our articles below around social media. I hope you find these helpful!
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AI is changing how all large and small businesses operate. I run a small supply chain operation for airport conveyor companies and with the new technology in baggage handling, we must stay up to date or fall to the wayside. Complacency will leave you looking for a job.
Great example Glenn, thank you for sharing.
For Mike Shanok,
I have made cabinets and other millwork for decades. I am semi-retired now.
Here in Austin if you want to subcontract with the city, you have to jump through some hoops that are frustrating , confusing, and time consuming. The city overpays for EVERYTHING so generally a contract with them is good profit. However you’d tear your hair out waiting for payment. So I had decided to never again do anything for them. But I have learned that if you play in the pigpen you’ll get muddy.
If you deal with attorneys, you usually have to play by the letter of the law, which they know way better than you, and they know it. Its just not worth it. I am NOT saying all lawyers act like this, but some certainly do, and do with gusto. This is, unfortunately, many business people’s MO; take Trump and Atlantic City for an example. But I am going to bet you can tell right off the bat some warning signs that a particular client will be a pain.
You are not alone. When I get a “problem child” I either decline their business or else charge them 150% to cover my hoop jumping. Since it is 100% their perogative to accept my price or not, I do not feel this as immoral in the least. After all, it takes much more gas to climb the ten miles up to Pike’s Peak, than to cruise ten miles down the interstate.
Thanks for your help, Alan!
Thanks for your feedback, Moishe. We are glad you found this helpful.
I run a mobile Lab company. The field is getting crowded, 10 years ago there were few companies.
Great article !
Thanks for reading, Diana!
Careful with the advent of AI. It has been written that as many as 40% of the workforce will be replaced.
I run a small, service business that technology changes have ravaged but I have managed to maintain, although revenue has dropped a third.
I need to hang on for a few more years but all of your questions sure hit home!
Sorry I missed it.
Excellent short read
My business provides services to insurance carriers and attorneys. Most carriers, including The Hartford, are responsible payers. However, most attorneys are one step away from being deadbeats, with accounts payable often going beyond 90 days. Attorneys, being cognizant of all the ways to drag out payment on an account, are impervious to the usual means of collection.
I would like to reprint your article in the monthly American Subcontractors Association of the Carolinas monthly newsletter with your permission. We will give appropriate credits to you with the article.