You can’t help but turn on the TV these days and hear about some new technology or development. Entire businesses are born and die on the basis of a single trend.
Most small business have missed the crucial lesson of watching trends.
Remember the following Acronym: PEST
1. Political. Never underestimate the power of politics to mess up your business. Statistics show that the stock market undergoes a reversal following a major Presidential election. There’s an entire investment strategy called “Presidential Cycle Dollar Cost Averaging” based on following politics.
Think that’s it? Think again. War effects the price of hundreds of commodities. Trade agreements effect the buying power of our money. Changes in laws effect everything from business creation to new product development, marketing and everything in between.
2. Economic. If you had started buying dot.com stock short back at the start of the fall a few years ago, you could’ve retired early. Of course you can never predict these kind of dream situations, but you can predict certain trends.
A close friend of mine lost his job as a programmer when it was shipped overseas. Today he works as an “outsource re-integration engineer” helping companies integrate and overcome the problems of outsourced software. Shipping jobs overseas has become an economic reality for many people. But a few smart people have learned to take advantage of this situation to make money and start a new business. The power of distributed work projects can be seen on any freelance site you find.
3. Social. When people get used to an idea, it becomes a powerful business model. It takes nothing more than a quick glance in the newspaper to see how some movies spawn an entire cottage industry. Even years from now there will be a tremendous market for fan-based creations based on hits like The Matrix and The Lord of the Rings. How many times, in the last month, have you heard about “low carb” diets? Think anyone is making money there? Oh yea.
4. Technology. Ignore technology at your own peril. Whether it’s legal or not technology will make you obsolete if you ignore it. Take one look at the recording industry. They’re holding on for dear life… and it’s getting worse and worse for them as wireless broadband and smaller computers make sharing files easier and easier. If you did a poll of teenagers today, how many of them do you think would tell you that it was wrong for them to share files? Percentage wise… not very many, right? These are the same people that will be making the laws for the next generation. Once a business model is obsolete, it’s dead. Horse and Buggy makers don’t bring in a lot of money, but automobiles are a multi-billion dollar industry.
Make it a point, from this day forward, the actively stay on top of business developments. Read magazines, check out news sites, and read articles like this. Always keeping in mind the PEST method. By watching new trends you’ll not only keep your business from being blindsided by something new, you’ll also be able to stay on the profitable side of the cutting edge without bleeding to death in the process.
Aaron Colman, helping business make money online.
Web design, custom PHP scripts, MySQL databases and more.
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