Trend Ubiquity
Trends are ubiquitous. Those running a business or a not-for-profit organization need to be aware of trends that affect how they will operate keeps the organization viable and sustainable. For individuals that care about their personal finances, understanding trends can help you better achieve your goals and become more secure financially.
The language of business and personal finance is spoken with numbers. Numbers themselves are not always important, but the trends they represent are always important. It is essential for business owners and managers and those having the responsibility to provide for their family’s financial security to be aware of and sensitive to changes indicating trends. Usually the trends are not huge waves but slight drifts away from an original plan or course toward a new paradigm.
The knowledge of trends can assist working people, entrepreneurs, investors, government leaders, educators, managers and board members of not-for-profit organizations and others. An involved person that focuses on the numbers looking for trends can usually detect slight variations from the norm over a reasonable period of time. Ignoring or passing over what is recorded can set the stage for a later decline in business or personal finances or the failure to take advantage of an inchoate upward momentum.
Reviewing financial statements or data for multiple periods is essential for trend awareness. Single period information are absolute amounts per se so cannot reveal any incipient trend. Data or financial statements for two periods can start the process with the more information the better. If you want to analyze business or not-for-profit financial performance ask for five years’ statements. If you want to review your personal income and tax payments, lay out five years’ of your tax returns side by side on a big table or better yet, record the five year summaries on a spreadsheet, and look at the changes and trends in the components of your income, deduction and tax payments. If reviewing a household budget, review five year summaries from bill paying software or credit card statements.
Unless nothing different occurred in the business or your life, there are emerging or developing trends. Look at the trends indicated from your data and determine their meaning and figure out how you can react to them. In a business environment spotting and then reacting to trends can alter the future course of the business. With regard to personal finances, trends can be used to adjust goals and plans that have been established to attain those goals.
Information, properly used, can be effective as a catalyst for change. Trends are an easy tool to use to accomplish this. Try it!
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