I always thought that anyone that was born in the 1890s and managed to live into their 90s had the most remarkable life possible. They started life out on the prairie, riding around in covered wagons, and ended being able to fly non-stop on a 747 from Dallas to Honolulu. So many incredible changes occurred in the world during their lifetime. It must have been fascinating to have lived in two very different eras.
I was born in the early ‘60s, although my official bio says late ‘70s so let’s keep this our little secret…wink, wink. I felt that anyone born during this era had the second best look at the progress of the world. Televisions went from black and white to color. Phones went from cordless, to mobile, to smart phones. Computers were invented, the internet was introduced, GPS became a real thing, and men walked on the moon. All of this happened during my lifetime.
As our world quickly changes, you also have to change and adapt to the new realities you are confronted with almost daily. In order to plan for the future, entrepreneurs and managers were always looking at past sales to set next year’s budgets and goals. If you made $1,000 last February, you should expect to make $1,050 this February - based on conventional trend analysis. Many people think that studying the trends of the past can help them predict the future. I disagree. In fact, I’ve never really adhered to that strategy. Here’s my thinking.
Imagine being the person who had to make the next year’s budget for a major hotel company in 2008. You can look at all of the old sales figures you want, but you didn’t see Airbnb coming at you that year. The hospitality business has never been the same.
What if your job was making the next year’s budget for a large taxi company in 2009? How quickly does your budget fall apart once you hear about this little start up called Uber? It’s ironic how the largest hospitality company doesn’t own a single property, and the largest car service doesn’t own a single car. Yet somehow, all of us small business owners are supposed to somehow figure out how to plan for the futures of our companies. It makes my head hurt sometimes.
Prior to 1999, I would sell around 15-18 large diamonds a year. For a small, independent jewelry store, that’s not too bad. It means that at any given time I had 2-3 substantial sales in play, and was closing one every 3 weeks on average. Back then I was competing against other retailers (that I usually knew) that had way more overhead than me. That allowed me to be competitive. Then Blue Nile hit the market and I’ve never hit those numbers again. Now I’m competing against someone sitting in a tiny office somewhere just flipping diamonds that they’ll never own for a 5% markup. Looking back on the good ole days just doesn’t seem like something that’s going to be of much use to me.
During the Great American Recession, looking back on the previous year’s numbers only depressed me. As a trade shop owner, I went into the recession servicing around 22 accounts. Only 3 or 4 made it to the other side. Looking back only made me sad because I was friends with all of my accounts. I enjoyed our interactions, conversations, and all the money we made together. They are all dearly missed, except one. You know there’s always one!
Don’t get me wrong, I’m not saying any of this to be a Debbie Downer. It’s quite the opposite in fact. What I’ve come to realize is that in our ever-changing retail landscape, looking backwards doesn’t do me any good. Whatever I was doing last year, I’m probably phasing out this year or next year. Whatever I did 2 or 3 years ago is now ancient history. I mean think about it, it wasn’t that long ago that we all paid to have our businesses listed in the Yellow Pages. I can’t remember the last time I even saw a Yellow Pages. I’ve come to realize that looking back doesn’t work for me. Looking forward is way more important!
There is a new technology called 5G that is coming in this new decade. 5G is going to render everything we’ve all been doing over the last decade obsolete. The new 5G networks are not going to be like the migration from dial-up internet to broadband to fiber. It’s going to be more like going from traveling in that covered wagon we talked about above, to traveling using the teleporter on the Starship Enterprise.
5G is going to enable artificial intelligence. I don’t know a lot about AI, but I know that it’s going to transform the world that we live in. The internet has affected how all of us do business. 5G is going to affect how we all live our lives. And this in turn will affect how we run our businesses.
Looking back, for me, is for nostalgic purposes only. Looking back for business forecasting purposes, just doesn’t work for me anymore. I can vividly remember the heydays of the triple key Christmas seasons that lasted 6-8 weeks long. But I promise you that I didn’t plan my last Christmas season on that. I like to remember the good old days, but I like to plan for the current, not the past.
It’s a brand new decade filled with brand new opportunities. By the time you’re reading this, I should be right in the middle of my move into my new location. If you’re sending me a package, be sure and call first to see which address you need to use.
Good luck in the 2020s!