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Restructuring

How Market Trends Safeguard Tradie Businesses?

Safeguard Your Business from Insolvency

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In the world of trade business, we are watching companies drop off the market faster than paint dries.

As a trade business owner, proactively safeguarding your business from insolvency is always a wise decision.

One way to achieve this is by ensuring you are always up to date on emerging market trends in the industry.

Several factors can influence market trends, including economic changes, seasons and technological advances.

Why Are Trends Important in Business?

Staying ahead of emerging market trends may be the secret to success and longevity in many industries.

For tradie businesses, staying on top of emerging market trends provides several advantages, including:

Maintaining a Competitive Advantage:

Identifying and adopting emerging trends ahead of competitors can give your business a competitive edge.

Imagine discovering a way to use drones to survey a property. You could fly the drone for a few minutes and apply software to get the same information, which usually takes a day of manual labour. If the software is more accurate than human analysis, many clients will seek this service to increase their output quality.

Whether incorporating new technologies or offering innovative services, being at the forefront of trends can attract more customers and boost your market share.

Customer Satisfaction:

Meeting the changing demands of customers is vital for maintaining their satisfaction.

As times change, so do consumers’ tastes. Information is more freely accessible now, too. Therefore, by the time the client reaches you, they may already have researched what they are looking for.

For example, the trend in 2023 has been to go with lighter laminate floors. Therefore, if you know it is likely for your client to request it, having access to a supplier or having the product available goes a long way to meeting the client’s expectations.

Imagine needing to catch up on the trend. Accessing a product already in high demand may take longer, delaying the project.

Business Growth:

Following emerging trends open up new opportunities for growth. Businesses that adapt quickly to changing needs are more likely to expand into new markets and attract a broader customer base.

As consumer tastes change, new opportunities may open up. If you know these changes, you can position your business to take advantage of them. This can help you expand your customer base and grow your business.

As we have seen, environmental awareness has significantly impacted consumer choices. Identifying how this trend impacts your business and utilising ‘green policies’ will make you a more likely option for clients who share this value.

How to Identify Emerging Trends?

Effectively identifying emerging trends in the trade sector requires a systematic approach. Whether you are looking at trend data within your practices or benchmark data to compare your performance to your competitors. You need a set of numerical data to compare.

You can compare data of the same product or service from last year to now or compare different products and services to each other simultaneously.

However, there must be a consistent measure of data to compare and accurately analyse trends.

Here are some strategies to help you stay abreast of the latest developments:

Market Research:

Conduct regular market research to understand consumer behaviour, demands, and preferences.

For example, ask your customers for feedback or read industry reports to identify patterns and potential trends. Such as the lighter laminate flooring example mentioned previously. What services are often being requested? What is a new product launched by an influential company?

Industry Publications and Conferences:

Stay connected with trade industry publications, forums, and conferences. These platforms offer insights into upcoming technologies, best practices, and market shifts.

Are there newsletters you could subscribe to for information and insights into the industry? Annual conferences act as a source of networking, too.

Social Media and Online Forums:

Social media and online forums are valuable real-time information sources about emerging trends. Join trade-related groups and follow industry influencers to stay informed about the latest developments.

Following relevant hashtags may expand your feed to international trends before they impact your local area.

Competitor Analysis:

Monitor your competitors’ activities and strategies. Identify any changes or innovations they are implementing that indicate emerging trends.

They were returning to the impact environmental factors have on business. Having an idea and putting it into practice are vastly different. Therefore, how do your competitors make themselves more environmentally friendly? How do they communicate that to their customers?

There may be something your business does without understanding how impactful it could be if communicated differently. Using all electric devices, rechargeable batteries, and recycling leftover materials may be things you do without thinking, but your competition advertises them as reducing their carbon footprint.

Seek Expert Advice:

Collaborate with industry experts, consultants, or external CFO services to gain valuable insights into market trends and potential growth areas.

Upskilling employees and partnering with other businesses may present an alternate perspective, such as how the actions are communicated to the public. Sometimes, a neutral party may see opportunities you don’t, like how to streamline a process or improve a technique of doing something.

External CFOs also compile management reports on different aspects of the business so that trade business owners can make informed decisions. They can identify what service makes the most money and where staff spend the most time and know the seasonal impacts for forecasting and cash flow management.

The Consequences of Not Tracking Trends in Business

Failing to keep up with emerging market trends can have severe consequences for your tradie business, including but not limited to:

Loss of Relevance: Outdated practices and offerings can make your business less appealing to customers, leading to declining sales and market share.

Missed Opportunities: Not identifying emerging trends means missing out on potential opportunities for growth and expansion.

Increased Costs: Ignoring trends can lead to inefficiencies and higher costs as your business may continue using outdated technologies and methods.

Competitive Disadvantage: Your competitors who stay updated on emerging trends might outperform you, taking away your customers and contracts.

Financial Strain: The inability to adapt to market changes may lead to financial difficulties and put your business at risk of insolvency.

How can External CFO Services Assist in identifying trends?

Clout Advisory’s external CFO services can be instrumental in helping tradie business owners identify emerging trends and make informed decisions.

CFO professionals bring expertise and objectivity to your financial planning and strategy. Here’s how they can assist you:

👉 Data Analysis: External CFOs can analyse financial and market data to identify patterns and potential trends that might impact your business.

👉 Strategic Planning: They can help align your business goals with the identified trends, enabling you to create a focused and effective growth strategy.

👉 Risk Assessment: External CFOs can evaluate the risks associated with adopting specific trends, allowing you to make informed choices that minimise potential downsides.

👉 Financial Forecasting: By assessing the financial implications of emerging trends, they can provide accurate forecasts to guide your budgeting and resource allocation.

👉 Performance Tracking: These professionals can continuously monitor the success of your trend adoption, ensuring that your business remains on the right track.

Negative Trends and Restructuring

While embracing positive trends is crucial, not all will benefit your business. In the event of negative trends affecting your tradie business, restructuring can pave the way for a profitable future.

Assessing Viability:

An external CFO service can help assess the viability of your business and identify areas of inefficiency or underperformance.

Implementing Change:

Restructuring involves making necessary changes to business operations, such as streamlining processes, diversifying services, or cutting unprofitable areas.

Cost Optimisation:

An external CFO can analyse your financials and identify opportunities to optimise costs without compromising quality.

Debt Management:

If your business is burdened with debt, a restructuring plan can help you negotiate with creditors and devise a manageable repayment strategy.

Long-term Sustainability:

Through restructuring, your tradie business can adapt to the changing landscape, ensuring its long-term viability and safeguarding it from insolvency.

Use Market Trends to Safeguard Your Business

Identifying emerging market trends is essential for the success of tradie businesses in Australia.

By keeping a close eye on industry developments and seeking the assistance of external CFO services, you can stay ahead of the competition.

Ensure customer satisfaction and secure the financial future of your business by adapting to the changing industry.

Embracing trends and undertaking strategic restructuring when necessary will empower your business to thrive and overcome any challenges that may come your way.

If you want to know more about how market trends can safeguard your business, contact us at (02) 6650 5888 or at coffs@cloutadvisory.com.au.

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