It’s not just your own product or service which determines the success of your small business – what your competitors offer is just as important if you are trying to establish a profitable company.
So, it is important that you know as much as possible about your business opposition.
If, on top of running your own business, gathering information about what your competition is doing seems a bit daunting, rest assured that the process can be divided into a number of relatively straightforward stages.
There are generally two types of competition in the small to medium-sized enterprise world (SME), according to small business expert Isabel Isidro.
Isidro says that opposition is either direct or indirect.
“Direct competition is a business offering the same product or service to the same market; while indirect competition is a company with the same product or service but a different market.”
Having established this, Isidro says you need to go about identifying who exactly your competition is.
This usually involves a variety of strategies.
“You can use the Internet and telephone directory to help you find competing businesses. Determine the services offered by your competitors, and find out [about] those that you don't offer,” Isidro says.
“Are you and your employees as well qualified to serve as specialists or customer problem-solvers as your competitor? Visit their websites and study their business models and how they operate.”
If you hope to apply the successful aspects of your opposition’s company to your own, it is also crucial to look for as much detail as possible.
“Make a list of every single aspect you can discover about your competition,” Isidro says.
“How does your competitor treat their customers? Is their service prompt and efficient? Do your competitors accept credit cards or charge cards for their services that you do not accept?
“How does your company image compare to your competitors? Can you answer questions about your competitor's products and services knowledgeably and objectively?”
If this seems like an endless string of questions about your opposition, it is also worthwhile to take some time and analyse your own operation if you hope to stay one step ahead.
Isidro says that, using information you glean from other businesses, you can devise ways to improve your own firm.
For example, good research will enable you to discover what other SMEs are doing better than you, and to compare your pricing structure with theirs.
Communication with clients can also help you to gauge what you’re doing well – and what your competition is doing better.
What you're listening for are the criteria in your customers' minds that they use to choose you over others. Those are what you want to duplicate as you expand, and those are what you want to use to identify competitors.
This is especially important for a specialised business, Robbins says.
If the soul of your business is about specialised services, then consider where people might go to get those same services. The emphasis is on the value of market research.
Finally, says Isidro, consider the impact of marketing.
Knowing how your competition markets itself can often explain why they may be attracting clients instead of you.
A comparison of your business’ publicity budget with that of industry leaders can be useful here, as can assessing the number of times your company’s name appears in relevant publications.
“How many times has your competitor had his [or her] name in the newspapers in the past three months?” asks Isidro.
“Count only the times for free publicity such as announcements, promotions, seminars, sponsorships, donations and speeches. How many times has your name been published for these reasons?”
And at all times, be consistent in the way you monitor your competition.
“Always keep your competition in your peripheral vision. Don't forget they are there,” Isidro advises.
“Continue to monitor their business methods. It's your best defence.”