The competitive sport of business
In most cases you will know who your competitors are before you form your business, other times competitors will rise out of your business' growth and success. It's a simple fact that all businesses will face competition.
Consider McDonald's fast-food restaurants. Who is their competition? Is it high-end hamburger joints, other fast-food restaurants, or the parent who makes hamburgers at home? Or is it all of them?
Consider Massage Envy, a spa service that delivers affordably-priced massages. Who is their competition? Is it the high-end spas, the thousands of independent masseuses and masseurs, the chair massage services that are popping up in malls and airports across the country, or the spouse that likes to give his/her partner a back rub on Saturday nights?
If you own a car wash, don't overlook the guy who gets a rag and a bucket of soapy water, and washes his car at home each weekend. He's part of your competition. If you are an accountant, don't overlook the do-it-yourselfers who use electronic tax-preparation software at home. They are your competition.
Knowing who your competition is can help you clarify how, where, and when you market and sell your services. There are five key indicators that will help you pinpoint your competition:
- Physical location
- Niche/specialty
- Services offered
- Relevancy
- Availability
It will be easier to know if your business can be competitive when you know the options that are currently available to your target market. Let's examine the first two a bit more closely:
Physical Location
This means the actual physical proximity within which you operate and engage in business with your clients: the city, neighborhood, street and even position on the block or floor in a building. Each can have an effect on your business.
Niche or Specialty
How is your business specialized within your larger industry? What is the actual focus of your services? This is your niche or specialty.
Learning about your competitors sheds light on who your real competitors are, helps you to make informed decisions and reduces your struggle when trying to figure out how and where to find clients.
This week, take some time to uncover your local competitors. Perform some quick research by identifying other local businesses that are similar to yours. Use an internet mapping site to search by ZIP code. For example, by typing "executive coach 10010" into the search field, MapQuest or Google Maps will plot all the responses for you, giving you a visual reference. Broaden your range if you perform most of your services by telephone, email or Internet.
Ed Abel is founder of ABEL Business Institute, and author of Roadmap to Success
Copyright 2012. Author retains ownership. All Rights Reserved.
Copyright 2012. Author retains ownership. All Rights Reserved.
Category: Business Planning, Management Fundamentals
