34. Peter Drucker in his own words interpreted for small business 6
“We will not be limited by the information, but we will be limited by our ability to process that information” The information overload age is with us with a vengeance but Drucker predicted it over a generation ago. How can you cope? The basic research you have done and continue to do on your market and the factors affecting it is the basis for understanding what the key influencers on your business are. The work you do on what drives the numbers within your business is just as critical. And it is only by understanding both of these aspects that you will be able to ride out the inevitable storms of competition and market conditions.
With an economy looking like it is heading into a recession, it is critical to get some understanding of how your business will be affected. The construction industry has been one of the first to be hit, with projects being mothballed all over and over 40,000 redundancies so far in the sector according to some reports. If your business is dependent on this sector, whether it supplies the sector directly or gets lots of its business from the money people spend when they move into a new home, then the impact may be dramatic.
Is there a niche which is more resilient which you serve or can serve? Are the fewer customers in the market looking for something different now that can help you get the business that is available? Will the problems of other, more vulnerable businesses open new opportunities for you? How badly is the downturn likely to affect you, and can you adjust your business to cope with it? Can you reduce your costs, reduce staff numbers, reduce your personal outgoings? In tough times you have to look at business and personal survival budgets to know how to get through to the other side of the downturn in a condition to take advantage when growth returns. And there are undoubtedly a lot more relevant questions that may need to be explored.
That’s a lot of information to look out, but good understanding should identify what is most likely to be useful information, and that you get by understanding the drivers of your business – not just what makes the volume, but what really drives the profit – and the drivers of your customers’ buying behaviour. What are the key factors for your business?