Now that you’ve got your business idea and you have an idea of what you want to sell or what service you’re going to provide, you next have to consider you competition.
A common mistake made in business plans, especially for small work from home business start-ups is the failure to acknowledge your competition. Unless you’ve come up with an idea never to have been attempted, you can be sure that there is already an established business already doing what you want to. Saying you have no competition is just a lie and you need to be realistic about how you will approach this. It is an aspect just as important as your color scheme or logo. This is a crucial step in developing your business plan and is something that should be done when evaluating your business idea.
Who Are You Competitors?
While this may seem like a fairly easy question to answer, don’t be lulled into a false sense of security when searching. Remember than competitors are often, if not always, competing companies providing a service, but can also be other more abstract things.
Think about things like whether there a free government service for what you propose. This is something that could potentially be an issue as they have near unlimited resources and can swamp the market.
When you consider ‘who’ your competitors are, you also need to consider how saturated the market is in the area you propose to operate. The market itself could be a competitor if it solicits sales away from you. When thinking about the above question, consider all avenues of thought.
What Are the Strengths and Weaknesses of Your Competition?
A question like this is a logical next step in your consideration of competition for your business. Whilst the strengths of big companies is their resources and established client base, you need consider what you, as a small local business, can do to undermine them and provide a service that they cannot.
It’s important to consider that with more income comes more expenditure. What advantage is this for you and what weakness is it for your competition? Also think about how an established mid-range company might be stagnated or complacent.
What Can You Learn From You Competitors?
If you’ve yet to launch your business then you are in a slightly better position that your established competitors. You have the invaluable skill of doing up-to-date market research and can adapt your company fast without the consequence of alienating a non-existent client base.
It would be fool-hardy to ignore your greatest source of information about the business you want to nurture – your competitor! Remember that they’ve already been in the position you are now and they’ve made it to where they are. Try looking into how they did it or past mistakes and mishaps. What can you learn from their past performance?
Also think about how you can improve on the service they offer. As I mentioned, they might be happy in the position they currently hold and are blind to the idea that a new business could steal away their customer base. This leads to the last question you need to ask:
How Can You Beat Them?
What makes your new company better than theirs? Try to think how you can freshen up the industry and offer something that they’ve not thought of; research into their dissatisfied customers (their bound to have some) and see what you can learn so that when you launch your new business you’re instantly better.
Always consider your unique selling point and try to make it both dynamic and organic as well as putting the ‘unique’ in unique selling point to really distance yourself from your competition.