What You Should Know About Competition In Small Business & How To Win!

INTRODUCTION:

Every business has competition. If I ask an client who else has what they have and I hear "nobody," I know that they aren't really aware that there would be people in the market place somewhere working out a way to get in on their turf. Small business accountants, lawyers, transport, pub, retail, wholesale businesses all have competition and all face the same challenges on how they will win.

In his book, Keys To The Vault, Keith J. Cunningham highlights some key areas when assessing competition. Here is a brief analysis on what you need to consider.

Figure 1: Sometimes it's better to embrace competition for self improvement!

1. Indirect Competition

Do you have other businesses who are competing for your customers' business even they aren't in direct competition with you? Advertisers for example might be looking at newspapers, radio or sponsorship. Foxtel competing with free-to-air would be another example. 

Sit down and list your customers' alternatives to dealing with you directly. Figure out what you need to do to make your product or service more appealing so you can cross them off the list.

Use this information to gain knowledge about what your existing or potential customers are looking for and build these into your sales training for your people. This information can then also be used with your target marketing thereby increasing a return on your dollar spend.

2. Knowing Your Competition

There is an old saying that you should keep your friends close but enemies closer. Sit down and list your competitors and find out everything about them. From you what you find out do a SWOT analysis on them and compare them to your products and services.

Make sure you know:

• who they are;
• where they are;
• what they do;
• value for money;
• speed of delivery;
• after sales service;
• staying in contact with the customer post sale;
• quality of products and lead times;
• guarantees or warranties offered;
• how they educate their customers on the latest and greatest.

You can find a lot of this information via their website, marketing materials or even doing a 'mystery shop'.

Author Sun Zu in his book  The Art Of War has a famous quote "if you know your enemy and know yourself, you need not fear the result of 100 battles. If you know yourself, but not the enemy, for every victory gained you'll also suffer defeat. If you know neither the enemy or yourself, you will succumbing every battle."

Figure 2: How do you stand out from the crowd?

3. Putting Up Higher Barriers To Entry

The harder you make it for competitors to enter your market the better it will be for your business. Could it be:

• a contract that provides exclusivity for you (suppliers, technology, region,etc);
• a patent or copyright;
• a key employee(s) with solid contacts (be careful though!);

4. Competing With Goliath

Competing with big companies can be fraught with danger but can also be a big positive if you look hard at them. Yes they have high revenues, profits and what seems unlimited cash but do they move slowly because they suffer in "death by meetings" before making change or are they arrogant or do they have an approach "if ain't broke, don't fix it"?

Figure 3: You can dance with a gorilla particularly if they play rugby for Narromine! "Go the Gorillas!"

CONCLUSION:

Never undersestimate your competition. If you need further help to sort through some of these issues consult with your small business advisors and don't delay.

Competition might seem bad on the surface but it can bring necessary improvement in the way you approach things and might even just improve your strategic approach to win more market share than you could ever imagined!