“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” Darwin’s got a point there. This is similar to our friends over on the other end of the ecosystem. The world of business and entrepreneurship has always been advertised as survival of the fittest. But the key to the longevity of businesses is its versatility and responsiveness to change.
And in a rapidly shifting landscape, businesses are finding it increasingly challenging to keep up with volatile market demands. We see success as a veneer. But at its core are the various phases of tedious market testing, strategic decision-making, roadblocks, and the persistence to innovate. Despite the challenges of limited resources and labor and funding, which, without question impedes progress in operations. It is precisely these opposing forces that pave the way for small firms to become leaders in creativity and modernization.
To end our series on Small Businesses, we will take a deep-dive into how exactly small to medium-sized companies get to that phase. Furthermore, how they can adapt to a business environment that is becoming more frequently vulnerable to changes in consumer demands.
Understanding the Market: The Key Role of Research
When you’ve got a business running and operations are running full speed ahead, it’s easy to lose sight of market conditions. Let’s admit it, it’s tedious work to monitor trends. But research is not just something that you do when you’re starting out, it’s something you maintain.
The world we live in today is constantly being defined by the information that we consume. It is having this information and how we use it that makes it so valuable. This kind of strategic data-gathering is precisely what propels small businesses forward. Unlike large companies that can afford to pay for data firms, small businesses often have access to a finite amount of resources. So for them, having a deep understanding of how the market behaves is not just an option, but a requirement.
Strategize With Information
This means constantly asking questions based on data to determine trends, patterns, and relevant data points. All in an effort to be able to understand the market better. It is the comprehensiveness and consistency of data-gathering through time that can put businesses ahead of everyone else. This happens by not only looking within the market environment, but also outside of it. When you learn what competitors are doing, you strategize around this information. Strategy is in order to produce goods and services that can maintain a competitive advantage.
It is in the understanding of consumer behavior that first-hand knowledge of how products or services are serving the target market. Ultimately this determines output effectiveness. When we ask the question of what the products are, who are consuming them, how old they are, what do they use it for, and when and why these products are being used, we are building an awareness of why there is such a demand. Market research also includes getting opinions and feedback to improve what you currently have, which is critical in product development.
Flexibility and Willingness
Let’s say you just started a new job in a new city. You moved in to a new apartment. You’re miles away from home. You don’t know anyone there. The territory is completely new. Since you’re just starting out, you have a very vague idea of what you’re walking into. Even though you already anticipate what’s to come, you are still managing your expectations with the position, with your new co-workers, with your new boss and with the company itself. Perhaps you might even begin to wonder if taking such a huge risk was even worth it. You have no way of predicting the end result.
Now, compare these experiences with someone who has already been in living in the city for years. This person came from a different town and took the same risk of leaving everything behind to start their career. They are now comfortable with navigating the city. They know how to get around the subway, which bars to hit, and have friends to call. There is also an understanding of the temperament of their boss, and they’ve settled with the company ecosystem. Through these experiences, they have acquired an understanding of their environment and the changes that occur within it, now become more predictable.
Changing With The Landscape
Just like moving to a new city, businesses become comfortable with changes by understanding the market landscape: observing what is happening, when trends occur, why they occur and how.
For businesses of all scales, change also includes the willingness to embrace technology. In December of 2018, Goldman Sachs reported that “Over 95% of small business owners recognize the importance of technology as central to success.” And though we may be quick to jump to the conclusion that larger businesses adapt to technological changes faster, that may not necessarily be the case. Proposals to advance technologically take longer, since it ascends to executives who need to confirm with investors and shareholders.
Small businesses on the other hand, in an effort to remain competitive in the marketplace need resources that are affordable and accessible, and can take advantage of their size to re-strategize faster and take sharper turns to adapt to change. In a survey of 1,164 respondents, Goldman Sachs has found that “In the last two years, 88% of small businesses surveyed launched new products and services, improved existing offerings, conducted R&D, opened a new location, or began exporting products or services outside of the U.S.”
Why Small Businesses Drive the Economy
In the end, small businesses drive the economy not because it has created more jobs. It is because small businesses are the ones that are most adaptable to change. Although size may seem like a disadvantage because larger firms have all the power to monopolize and set the rules of the playing field, this can also be the cause of why they can get left behind. The blankets of bureaucracy and extended times necessary to process new strategies, as well as the comfort of a continuing success can make them complacent and unwilling to take risks.
It is because of this that small businesses have discomfort on its side. All the advantage of mobility to learn from the mistakes of the past and build a new path towards a new American Dream.