Foresight is needed in business. Anticipating the twists and turns the market might take can save you a lot of money.
Fortunately, market behavior is not always as unpredictable as to how it had been in the recent past. Most trends have followed patterns that have been the same for the past years. And the major part of business operations can be planned.
Contingencies can be anticipated well before problems blow up enough to disrupt your business. For example, when you got electrical contractors to check your entire building, you noticed rodent infestation. The two are separate problems, but you know that the pest might have damaged your wires. Knowing that one can lead to the next is the kind of simple foresight that can save your business.
Here are some things that you should consider when you plan for a year’s worth of operation.
Anticipate bargain prices and promotional stints
When setting prices, it’s not just a matter of accounting for all of your expenses. You need to look at an entire fiscal year or at least a season’s business cycle. You know there will be big sales, and you need promotional strategies in-between to lure customers.
Start with a high price so that people will think of that as the value of your product. Then come up with bargain opportunities such as sales, packages, etc., to lower the price to something more customers can afford. Everyone loves a bargain.
If everyone loves a bargain, then how much more will they love freebies? You can factor in the costs of these ‘free’ goods you give away. When you set the promotional prices, buyers will think they are only paying for the item they want, but in truth, the price will already cover your expenses for the freebie.
But how can you increase your prices when the rest of your competitors are marking them low? For the product and the same brand, it’s true. It won’t be easy to mark up your price significantly higher than the others. However, if you’re not doing retail, you can create your edge by branding. The message you should put out is that sure, you’re paying more for my product, but it’s a lot better than the cheaper ones.
This will also help when you hold a sale. People will remember the initial value you had placed on your goods and think that they are getting that value for a much lower price. The price you give your product will affect the perception of customers. To simply put it, if you start with a low price, they can equate it with poor quality.
When you look at trends, you don’t just look at your industry. You should also study fields that affect or complement your products. For example, you’re selling cooking wares. You know that in autumn, apple picking is popular. You can use this to promote your wares for baking.
You should also understand the possible impact of changes in different industries seemingly totally different from your business. What will the recent developments in medical technology mean for someone who’s selling outdoor sporting equipment? Some effects take a long process to materialize, but you can detect if something else is affecting the game field if you monitor well. Maybe you can research if people will be more willing to go on extreme adventures if they feel safe, knowing they can rely on the state of medical technology in emergencies.
Other than what’s happening in the local market, you should also look at the different parts of the world that will likely affect your supply chain. Let’s say you’re getting your avocado supply from Mexico. Then for some reason, Peru has shut its trade borders. Peru, which comes third among the countries that exported the greatest value of avocados in 2019. Their buyers will now look to other countries.
Similarly, changes in other countries affect your product distribution. For example, Colombia is already known for coffee. If they discover a new technology that can preserve a coffee bean’s freshness longer than what is commercially available now, their coffee exports can rise. If you own a small café, this might increase the popularity of Colombian beans or a drop in their prices because of the higher supply.
Without major disruptions in our lives like what the pandemic had done, predicting how buyers will behave throughout the year is more or less already guided by years of market research. But it will still do you good if you find more innovative contingency measures, learning from the recent events we have been plunged into. You have to level up the flexibility of your operations and widen your scope of market observation.