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For many new and experienced entrepreneurs, it can be difficult not to run with a new business idea as soon as it pops into our heads. One of the biggest reasons for this is because we want to be sure that we are the first to market. But, rather than revving up the engine too quickly, it can be extremely beneficial for you to take a step back, and research whether or not there are other companies that may already be producing something similar to your intended product or service.
What you may find is that there is already at least some competition out there. But even so, should that stop you, or should you still proceed in light of these other competitors?
The answer is, that depends.
When moving forward with a new business idea, the reality is that having some competition already in the market place can actually be a positive thing. One key reason for this is that it shows that there is at least some amount of interest for that product or service in the industry. (Alternatively, if there is absolutely not competition out there at all, it could mean that others have already tried the idea, but it didn’t work out).
There are actually several ways in which competition can help your business to succeed. For example, having other companies offering the product or service means that there is already at least some amount interest in the market place. It can also force you to differentiate and carve out a specific niche for your business. In addition, depending on just exactly what the competition is offering, you may even find that you can partner with a competitor in order to expand your reach – and ultimately create a win-win for all.
What industry is your new business in? Prior to getting started, did you find that you had a little – or a lot – of competition, and if so, what was your strategy for moving forward?
I’m in the buying and selling business.
Well I know that there is a lot of competition out there. My strategy is
to go to where I know I will make money. And I am determined to secceed.
When starting a business the first thing you need to consider is the necessity of your product or service. If there isn’t a need for your product, how will you attract consumers?
You need to find a way of filling the gaps, identifying any issues in the market and then offering a solution. What is your unique selling point (USP)? Ask yourself, does the problem you want to fix actually exist?People get so hung up on inventing something unique, an idea, product or service nobody else is already offering. But there is very little in business that is truly unique. Focus on being better than the competition instead of looking for something new.
Every business should be customer and market-led. Your prior research should illustrate this. Research is not just useful to know, it’s critical and you should spend a substantial amount of time doing it. It is only by fully researching your market and customers that you understand their needs and how to differentiate your offering. Analysing your audience, identifying your USP and understanding your market are essential.
When I started my recruitment business Alexander Mann, I decided to only charge customers if we were successful in making a placement. I hired the best sales people and focused the business on financial services recruiting. By targeting one sector, I was able to quickly become an expert and set myself apart from the competition. Being a niche market player makes you a leader.
A USP can be applied to lots of different components of a business including customer satisfaction. Don’t forget the value of customer service. If a customer knows they will receive next-level service compared to your competitor then they are more likely to come to you.
Emma Watkinson founded SilkFred with her Start Up Loan. The business is an online fashion retail platform, however the difference with this site is that it specifically sells independent and emerging designers. The team handpick designers featured on the website, checking the quality of the items they produce to ensure they meet the same standards.
By focusing on independent and up and coming designers Emma has ensured her website offers something different to the other fashion retailers in the marketplace. Customers know that when they purchase items from SilkFred they are accessing products they wouldn’t necessarily be able to buy on the high street or from other websites.In crowded markets it can be harder to find your USP but with so much competition it is a key component of success. Don’t try to be everything for everyone. Remember to focus on your customer and their needs: by trying to please everyone you often end up pleasing no-one.
Know your audience, how to target them and put yourself in your customer’s shoes. Once you have defined your USP it is a lot easier to promote your business, stand out from the crowd and disrupt the market.
Even with an innovative product or service idea, you’ll always have competition in the market. It’s always important to do competitive analysis and have a better overview of your business and the ones who are already are in the market. If you’re entering a well-established market, include a list of a few companies whom you consider direct competitors and how you plan to differentiate your products or service and business from theirs.
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