Know Thy Competitors
Entrepreneurs who are starting a new business have a big challenge ahead. It’s not enough to have a great business idea and a perceived market, but a keen entrepreneur will spend a great deal of time evaluating and sizing up the competition. Having a clear picture of your competition’s business process and product marketing not only will help you develop your own, but also will help in setting your business apart if you are looking for venture capital financing.
Knowing your competition isn’t about squashing them. The days of industrial revolution monopolies, where killing or buying out the competition in order to be the last business standing, are a thing of the past. Today, knowing your competition is learning about their message, their product, and their business process so that you can develop a product that sets you apart. Your business should be able to penetrate the market and work harmoniously along with the competition.
Becoming familiar with competition not only helps you design your business process, but it also allows you to find ways to form potential partnerships with your competition. Collaborating on joint ventures is a great way to expand customer base and revenues for both businesses.
Starting with Your Research
Your competition research should begin with the prominent business in your region or even on a national level that sells a product or service almost identical to yours. Acquire their marketing materials like brochures, catalogs, and website content. You could even make a purchase from the competition as a “mystery shopper” to gain intelligence on how their customer service functions and the quality of sales service.
Find the Message
Once you’ve gathered as much data possible, take a look at how your competition delivers their message. Do they use fancy graphics? Flowery words? What is it about the marketing material that attracts a customer to make a call or visit their store?
If you have data from a number of different businesses, look at how many may have similar messages. Some businesses try to compete simply by imitating their competition rather than trying to stand out. Look at the messages from each and determine what works best and what is ineffective.
Spin Your Own Message
Evaluate how your message can be delivered more efficiently and effectively. Can you provide better customer service? Does your product or service have features above and beyond what the competition sells? Find ways to set yourself apart. You don’t have to create material that is identical. Rather, find ways to incorporate what works into your own message that will attract the same type of customer.
Chances are that your business idea is not completely unique. You will have competition in some form. If you are an entrepreneur who is looking to expand business with venture capital, you should perform a complete evaluation of your competition so that you know where you stand within your niche – which will allow you to demonstrate to venture capitalists how you will stand apart.