Using the crystal ball to help guide your business model is more than just guessing at the future or daydreaming. Using the crystal ball is a process by which you paint a vivid picture of what the business environment will be three to five years from now. Ask yourself:
What will be the general economic climate?
What will interest rates be versus today?
What will be the general state of your industry?
What new competitors will have entered your market? Who will have exited?
What new technology will be commonplace both in the general population and in your market? What competitors will have adopted this technology?
What new laws or regulations will affect your industry?
What product features will you have added and why?
What new products have competitors introduced? How successful are they?
What is the economic health of your clients and their industries?
What marketing methods will be the most effective?
The purpose of this exercise isn’t the same as a five-year plan. A business plan is only about your business and doesn’t put much emphasis on what changes happen to the world around you.
The crystal ball exercise focuses entirely on the environment your business will be forced to operate in and then allows you to make the necessary adjustments. Your first-hand knowledge of your industry lets you see into the crystal ball and predict what the future will bring.
Many contend that Bill Gates’s success at Microsoft was partly due to his ability to read the crystal ball. Gates prognosticated that every home and desk would have a computer on it. At the time Gates said this, most businesses had no computer, and very few homes had one.
However, Gates behaved like his prediction would come true. He worked to dominate the critical applications for this army of future computers. Bill Gates was successful for many reasons, but one of them was his ability to predict the future through the crystal ball.