Get a big piece of paper. Get some coloured pens. Switch the
phone off for an hour.
Doing this simple exercise will help you to understand what’s
going around you. Getting a clear view of the environment
will mean that you can make the right choices for your business. And making
the right decisions will lead to big savings in both time
and money. Taking an hour out to do this could mean the difference
between your business being a great success or failing.
We need to look at the PEST’s
On your big piece of paper draw four columns. Label each one:
POLITICAL
ECONOMIC
SOCIOLOGICAL
TECHNOLOGICAL
We’re going to think about all the outside factors that
affect your business.
POLITICAL factors
If you run a nursery, changes to government on care of the under
5s will go under POLITICAL. If you are a printing company, think
about new rules for health and safety.
ECONOMIC factors
Think about what’s happening in your market. If you
export to the US, what’s happening with the exchange rate?
If you run a village shop, what’s happening to house prices
that might change who’s moving into the village.
SOCIOLOGICAL
What are the population trends in your area? What are the patterns
within your target market? When I first moved to Brighton, I
thought I’d be working with big companies, only to find
that I kept getting asked for help by entrepreneurs from small but growing companies.
When I finally got around to doing the research (yes, I know I should have known better) I found that
there are lots of small businesses in Brighton (19271, to be
precise.)
What changes are happening in how people buy things?
What are the
in your industry and the sectors
that you sell to? Find out as much as you can.
TECHNOLOGICAL
What's happening to change your sector? How does the internet affect you? If you're a car dealer, what will happen to the fashion for 4WD vehicles as oil prices increase?
See how the different factors don't fit exactly and discreetly into the categories; they're quite often interlinked the more that you think about them.
Can you use text messages to keep your customers happy if you're a courier service? Might this mean that you can charge more, or does it mean that you'll get repeat business because people know when their parcels will arrive?
If you don't have access to all this information, put in questions and areas where you need to find out more, put the big piece of paper on the wall to remind you, and go and find out.
Sources of information
You might want to think about using
Citystats.org for information about Brighton and Hove
FT.com or buy the paper regularly to find out what's happening in the
world and how this might affect your business.
The
City Business Library in London
Marketresearch.com
Research services from The Joy of Business
If you have a specific question abut your business environment,
but don't have time to find out, you can commission The Joy
of Business to find out for you. Contact
us for a quote.
What does this mean for your business
Now go and make a cup of tea, come back and consider what all
this means for your business. Are you in the right market? What
might happen to your business over the next few years? How will
you take advantage of the opportunities and deal with the potential
threats? What changes do you need to put in place now to start
preparing for this?
The importance of strategic thinking
Try making a space in your diary each week to do some strategic
thinking like this exercise. Maybe Friday afternoons are a quiet
time, or you can use an hour on Monday mornings to reflect and
help you set priorities. It could make all the difference to
whether you survive as a business or really start to make things
happen.
Julia Chanteray
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