When I lived in western Massachusetts, my town was just across the Connecticut River from Holyoke, which is known as “Paper City” because it was once one of the world’s largest centers for paper manufacturing. A half hour away was Westfield, a town that carries the nickname “Whip City.” During the 19th century, Westfield was a center for the manufacturing of buggy whips.
A whip manufacturer, Westfield Whip, still operates in Westfield. On their website they say they are the only survivor of the 42 whip manufacturers that operated there in the 19th century. They serve people who are involved in dressage and similar activities.
I’m not certain any paper is being manufactured in Holyoke today; if it is, it’s certain to be of a specialty nature. Fortunately, after years of decline the city is making a comeback as a high tech center.
When did the owners of the companies that earned Holyoke its nickname begin to realize that two factors – rising labor costs and a rapidly dwindling stock of timber upstream that could be floated to their mills on the Connecticut River – would come together to move their industry to places with more abundant timber and labor cheaper?
Similarly, did the whip makers in Westfield realize when the first automobile drove into town that their companies were doomed? Or did they cling to the hope that most people would not want one of those noisy, newfangled contraptions?
Why bring up these bits of business history? Because I often wonder how much time, if any, the average small business owner devotes to scanning the environment for emerging factors that may affect the future of his/her business. Are you so caught up in the day-to-day activities of running your business that you would not notice a development that might be the equivalent of that first auto arriving in Westfield? Or, to use the Holyoke example, have you fully considered what trends – such as a rise in the cost of labor and raw materials – might converge to erase your profit margin?
Over my career, I’ve worked at several companies that had to reinvent themselves to avoid being crushed by market shifts far beyond their control. One of these companies no longer exists; it was swallowed up by a larger, nimbler competitor that was better at judging the emerging needs of the marketplace. Another company’s business looks dramatically different than it did when I was there, as they’ve sold off some business lines and acquired new ones.
In one case, a small public relations firm, the harbingers of doom were clear long before the owner took action to save the organization. The firm had as much as 80% of its client base in one industry, and a risky one at that – real estate. When the region’s housing and commercial markets crashed in spectacular style in the late 1980s, it was a miracle the company survived. Yet, the signs that a crash was inevitable began to show up as least two years earlier. The handwriting was on the wall; the firm owner just chose to ignore it. A severe downsizing and some deep financial hurt for the owner followed before the ship was righted with a much more diverse client roster.
Is there handwriting on your wall that you’re ignoring? Not that the handwriting always needs to have negative consequences. Sometimes it may involve new opportunities for taking your small business in new directions that will help insure an even bigger, better future.
Make sure you routinely take time to scan the horizon for developments that might affect your business’ future, either negatively or positively. It is all too easy to just stay down in the trenches working day after day on short-term issues without ever standing up and taking a good look around for what might be coming next. Don’t let that happen to you.