Who????????  Joseph Schumpeter was an Austrian political economist born in 1880.  In 1932 he became a professor at Harvard and remained there until his death.  He is credited with the concept of “creative destruction” – the process by which something new brings about the demise of something before it.  Suppose you own a bookstore; or drive a taxi; or hang telephone lines.  We are all familiar with the concept and could devote several pages to examples of it.  So?

Today’s entrepreneurs are operating in an environment that can change on a dime.  The successful business you may have run for years all of a sudden faces someone who can do it faster, cheaper, prettier – whatever.  R.I.P.  Sears.   For the entrepreneur to stay in business and grow he or she has to be constantly aware of the world and business environment around them.  How many retailers watched Amazon growing and figured that it was a clever idea and not much of a threat.  Borders didn’t.  Barnes & Noble didn’t, just to name a couple of the most obvious.  In today’s world social media rules.  But it doesn’t rule everything.  Local and national news is important – wherever and however you receive it.  But you have to look for it and understand if it has any implications for your business, and sometimes you have to act on it. 

One example is the current tariff fights.  A lot of things sold in retail stores come from China.  Do tariffs affect any of the costs of what you’re buying?  Toys are one example of a product where the costs are going to go up.  There are dozens of other examples out there.  Are any of them going to affect your costs, hence your prices, hence your profits?  You may be cruising along making money hand over fist (especially in this economy) but something may be appearing on the scene that could replace your product or service or do it better.  The railroads owned the passenger business.  Then Henry Ford threw a monkey wrench into the wheels, and the rest is history.  Pay attention to the world around you.  You never know where a wrench might come from.

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