How to read your marketplace
Understanding the movements and changes in your sector could be useful when the time comes to seek sale or investment. Here are some tips on monitoring your market:
Most business owners have a very strong handle on their day-to-day company operations: sales pipeline, customer relationships, technical issues, staffing, procedures, new business development. You know your business intimately, and understand your customers’ requirements – but do you know your place in their wider market, and how changes elsewhere in the sector might affect you?
Surprisingly, the answer to this is often no. Take competition: many business owners know their closest competitors – perhaps you even regularly pitch against them for new business, or you share customers. But many are often less aware of specialist competing organisations in different territories, or with larger organisations who may offer specialist services as part of a larger “service package”.
Movements in the market – for example consolidation strategies, new legislation, or macroeconomic developments – could change your immediate trading landscape. Information is power here, and understanding or ‘reading’ these changes is important. It can impact on many areas of your business: from how you develop business plans, to your staff, your customer service, to new product development. No business, no matter how innovative, niche or cutting-edge, can operate in a vacuum.
Regardless of the sector you operate in, there are some simple steps to take. Checking your sector’s traditional trade media sounds all too obvious – but being disciplined about how you do that is key. You probably already subscribe to the voice of your industry, but do you actively take time to read it, or does it sit on your desk, still in its cellophane? And when you do read it, how often do you ask yourself: “How could this affect me?” With printed magazines, start with the news pages, and get a sense of who is winning new business, and which new major projects are on the horizon. Check the employment pages – who’s on a recruitment drive, and why? Ditto exhibitions or trade shows, which will be advertised widely in trade media – what are the hot topics, who are the keynote speakers, and what’s the ‘small talk’ being discussed? With each big story, keep asking yourself the same question: “Is this going to impact on my business?”
The mainstream business media online – Reuters, say, or national B2B organisation Business Insider – is full of fascinating gems of information. Don’t fall into the trap of thinking “this doesn’t apply to me”. Even if the corporates who get the headlines are higher in your sector’s food chain, you should take note. Market rumours could reveal a key acquisition trend: from the obvious (energy businesses investing in sustainable technology) to the intriguing (Private Equity investing in seed funds to mitigate risk). Big news in your region such as inward investment, job creation, and new infrastructure could bring you new customers – or new competitors.
Much of this information is freely available; you just need to find the time to consume it. There are useful short cuts, just a Google search away. Subscribe to the many free daily business bulletins relating to your region and your sector. Follow key outlets and major sector players on LinkedIn, Twitter or other social media, where you can get ‘push notifications’ of news almost as it happens. Independent blogging sites can be a valuable resource for rumours and news – search online for ‘best blogs’ with your sector as a keyword, and get a list of the thought-leaders out there, and possibly even easy-to-use digests of who posts what, how often – and who else is following them. Many bloggers or media organisations offer on-demand webinars, vlogs or YouTube videos, and don’t forget the humble podcast too – they’re great for the car, and make time stuck in a jam on the M25 more productive. iTunes alone has 250,000 to choose from, and Spotify has been investing heavily in this space recently. There will almost certainly be something out there of significant interest.
You have to be ruthless though – you do, after all, have a business to run. There’s a lot of information out there, and filtering it can be a job in itself. One tip is to set up a tailored Google media alert on your competitors and major customers. That way, any new online mentions can be sent straight to your personal inbox to be read at your convenience.
On its own, a piece of news might appear irrelevant. But as part of a bigger picture, it could become evidence of a new trend. You might be dismissive about a competitor winning an award, or a key supplier winning a new contract, or a deal somewhere else in your sector, but these might have a butterfly effect later. Take one big M&A news story from 2017: Amazon’s decision to purchase US organic retailer WholeFoods for $14bn apparently “baffled” some observers, because of WholeFoods’ low margins and slowing growth. But Amazon’s CFO even went on record to explain the rationale: “We're experimenting with a number of different formats: physical pick up points and Amazon Go to online ordering and delivery to your door. We'll see how customers respond.” This was a deal with an eye on the long-term – and the repercussions for food retail could be felt for years to come.
Is the next big movement in your industry already being covered somewhere? If so, you probably want to read all about it.
Read your market: checklist
- Make time to catch up with your industry news: via trade mags, and on social media
- Subscribe to a few relevant daily e-bulletins or blogs
- Make a note of gossip and rumours from contacts, suppliers etc
- List new entrants and leavers in your market – and analyse why this is happening
- Are there interesting business sales in your sector – if so, is now a good time to explore a sale yourself?