On the Lookout

This story appears in the October 2005 issue of Entrepreneur. Subscribe »

Instead of scouring textile trade magazines, Dhurat Rosinski, 42, co-owner with Kristine Clever, 43, of Skeins on Main Yarn Co. in Rochester, Michigan, pores over celebrity and fashion magazines. That's how she knew about the poncho trend long before Martha Stewart walked out of jail--Jessica Simpson's crocheted poncho had actually jump-started demand months earlier. And her shop's most recent hot item was born when Rosinski saw a model wearing a silk scarf tied to her purse.

"We created a knit version of the purse scarf, and it's been selling really well," says Rosinski.

Monitoring current events and celebrity styles can be a great way to anticipate demand, says John F. Bagwell, president of Bagwell Marketing in Dallas. In addition to spotting must-stock items, you can also predict marketing opportunities. In the weeks before the Gulf War started in 1990, Bagwell purchased blocks of advertising on CNN through his local cable company, believing viewership would skyrocket if the country went to war. His bet paid off, and his clients were featured on the sold-out airtime.

"Look locally and nationally, and always ask, "How does this relate to my business?'" Bagwell advises. "The key is to pay attention. There are opportunities all around."