Business Planning Considerations: Buyer Tastes and Trends
In addition to defining market growth trends, your business plan also needs to address how you'll deal with changes in the way customers choose, value, and buy products like yours.
If your business serves individual customers, answer each of the following questions three times — once for how customers have typically acted in the recent past, once for how they're acting under current market conditions, and once for how you believe they'll act in the near future.
Do customers make purchase decisions on their own or upon the advice of others?
Do they buy on impulse or after careful study and consideration?
Do they pay cash or use credit or payment plans?
Do they seem to place higher value on the prices or the level of your product or service quality?
How frequently do they buy from you, and what is the typical size of their purchases?
Of the products you offer, which ones are in highest demand and why?
If your business serves business clients, answer each of the following questions three times — once for how clients have typically acted in the recent past, once for how they're acting under current market conditions, and once for how you believe they'll act in the near future.
Are purchase decisions made by owners, or by operations, finance, technical or marketing managers? Are they made through a central office?
Do purchases require several levels of approval, and how long does the approval process take?
Do clients work exclusively with a single vendor, or do they use multiple suppliers to purchase products like the ones you offer?
Do clients put their purchase orders out for competitive bids, and if so, do they base selections on price, quality, speed, or other factors?
Do clients pay upon delivery or upon invoice, and how long is the typical payment cycle?
In your business plan, summarize how your customers' purchase habits have and will continue to change and how those changes affect your products, pricing, marketing, sales, and operations.
If change hasn't rocked your business arena and target audience, just wait. Price comparisons made possible by the Internet have turned retail outlets into showrooms. Environmental disasters have marooned businesses and altered the level of eco-consciousness consumers demand from the businesses they choose to buy from. Social media has allowed even minor business transgressions to go viral and destroy brand images as a result.
When planning your business, include a plan for how you'll adapt to the changes that are underway and how you'll react if and, more likely, when you encounter unexpected change. Cover these points. These five steps each begin with a letter that, together, spell ADAPT. Use them to implement changes that steer your business past threatening market conditions:
Assess whether the disruption is temporary or more likely to permanently impact your business.
Determine if and how you can turn the upheaval into a business opportunity, for example by opening a new market or a temporary location, altering where or how you do operate and serve customers, or revising your product, pricing, or distribution strategy.
Aim to protect and build upon the strongest capabilities of your business so that even as you adapt to an altered marketplace, you maintain your competitive advantage and business strength.
Plan the tactics you'll use to address the market situation by setting goals, tasks, deadlines, and responsibilities to enact the changes required by market conditions.
Take action. If you detect significant changes in your marketplace, waiting isn't an option.
In your business plan, include a statement of actual or anticipated market conditions that could disrupt your business operations or sales, along with actions you've planned to adapt or even capitalize on the situation.