The ability to identify trends before they even become trends is the hallmark of a small business.
Small businesses have one distinct advantage over large businesses: their ability to spot trends quickly. This micro response to trends is a great benefit for the small business owner, as it can help nip problems in the bud quickly if need be, as well as determine if a particular goal is on track. In fact, Entrepreneur says early trend spotting can set up small, young companies for long-term success. So how can you achieve this? It’s not as hard as it sounds.
If you are effectively tracking, monitoring and controlling as many systems (production, sales, finance, etc.) as you possibly can, you can determine what’s in balance. These numbers are measurable and quantifiable. For instance, if you notice your accounts receivable went from 35 days on average, up to 37 days, then to 38, you can stop and take a moment to analyze what is happening here. It’s a mere point or two, but it may indicate a developing trend and if you can determine the reason you can repair before the trend becomes well developed and losses are increased.
Digging Deeper, Asking Questions
When you start asking questions, you may find that it involves just one big account that’s skewing the results. Perhaps a client has not been paying an usually large invoice. You’ve asked the question and you’ve received the answer. Now you can solve the problem. This may go unnoticed in a large company. But because you have been paying attention daily, you can quickly spot a developing trend and fix it before the issue worsens.
Recognizing a trend and taking steps to remedy it or keep it going involves first identifying and then responding to what’s working and what’s not working.
A trend is something that happens three straight months in a row.
For instance, this can involve:
- An upward trend in your sales numbers
- A downward trend
- Or a neutral trend
Let’s say you are noticing an upward trend. You know you’ve established a new benchmark. Now, it’s time to ask: What’s my next goal? Riding the crest of your upwards trend and then responding with a bigger plan to take you to the next level.
If there’s a consistent uptick, downtick or neutralization, it’s telling you something. That’s one big benefit to small businesses, as they can analyze and evaluate their trends quickly, measuring all levels of productivity daily and even hourly. At the end of the week, you know — up or down — where you’re headed.
The ability to identify trends before they even become trends: this is the hallmark of a small business.
If you have been spotting a trend that is putting your business in more and more debt as the months go by, get help with debt settlement and restructuring with Second Wind Consultants.