Starting a small business can be nothing short of terrifying, particularly if you start comparing yourself to all the other businesses competing in the same field. In fact, in order for your business to thrive you need to know almost as much about the competition as you do your own company and customers. The trick is to not let competition intimidate you, but use it to drive you forward.
Itâ€™s a great idea to carry out an in-depth competitor analysis of anyone else trading in your niche that you consider to be competition. Analyzing the competition will allow you to identify their strengths and weaknesses, spotting any gaps in the market, understanding what products or services you should offer and how you could market them effectively.
One of the biggest questions any new business owner asks is usually â€˜where on earth do I start?â€™ And the answer to this is that the best place to start is with a plan and strategy; getting distracted from your business because of competitors is a big mistake and spending too much time dwelling on their successes and your shortcomings is counter-productive. Instead, spend your time carrying out an in-depth analysis, which should be repeated every month.
Identify your competitors
All businesses face competition, even if youâ€™re the only bar in town, you will still be competing with the local cinema, restaurants and other leisure facilities where people spend their money and free time. Use local directories and listings to get a good idea of whatâ€™s already available in your area.
Establishing your digital competition is as easy as entering a search into Google and making a note of the top ten search results. This process can be repeated as many times as you wish, using as many of your key search terms as possible. There will be some very big names within these search returns, but donâ€™t let them intimidate you – simply speaking, the internet offers a level playing field. Â
Analyze the strengths and weaknesses of your competition
The main goal of a competitor analysis should always be to strengthen your own marketing strategy and plans, not just so you can feel good (or bad) about yourself! Be prepared to put into action anything you uncover as a result of the analysis.
A SWOT is the analysis of a companyâ€™s operations, assets and performance and will give you a unique insight into your competitors. It will demonstrate what you need to do to stay ahead of the game.
Review your current position
Comparing your business alongside your competitors is essential to developing the most effective presence for your business, whether thatâ€™s in a bricks and mortar store or on the web. Â
A full review of the current position of your business, in terms of marketing activity, in the following areas is recommended:
- Product – What you are selling
- Place – Where youâ€™re selling your product
- Price – Your pricing policy?
- Promotion – Any promotional activity you are carrying out
- People – Training, recruitment, quality
- Process – Procedures in place to ensure consistency