Do you......

• Spend time up at night worrying about your competition? 
• Have multiple pages devoted to them in your business plan? 
• Track their every pricing move and new product offering?

Some unease over the competition is healthy and warranted. However, it is best to keep your concern in perspective. 

Is Your Market Crowded?

For many businesses the potential customer base is big and fragmented with numerous providers (like you) offering their services. Many of us fall into this category.

Take for instance an accounting firm. There are countless individuals and businesses that could use your services, and there are countless competitors (from single-shingle to the Big 4) serving this market. The same is true for other markets, such as coffee shops, attorneys, lawn service and health care providers. 

Should you be worried about your competition? 

Not so much. Your energy is probably best spent building relationships with your customers, delivering top quality product, providing great service, and establishing an impeccable reputation. Add competitive pricing, and you will have more than enough business. Don't worry about the competition, let them worry about you!

Are You One of Only a Few Competitors?

Let's say you live in a world with very few competitors, such as Apple and Microsoft or Airbus and Boeing. Or, more realistically, you happen to be one of only a very few businesses providing a particular product to a niche market.  

For example, let's say you are one of three firms providing software to optimize product flow at distribution centers, or you have a special line of furniture specifically targeted for homes with minimum square footage. In these cases, there are only a few competitors serving a defined market. Potential customers are well informed of what you - and your competition - can offer. 

Should you be worried about your competition? 

You bet! In markets with just a few legitimate competitors, you need to stay abreast of their every move. Follow their product line-up, pricing, sales efforts, delivery mechanism, service levels and cost structure. Know what they promise and what they deliver. Get your customers' perspective on the competition. Armed with this information, you will be able to implement changes which will set your firm apart.  

And Everyone In-Between

Then there is everyone else. These companies serve a broad market with many (but not countless) competitors. And unlike the first example, there are few, if any, single shingle businesses in this category. 

Take for example, the clothing designer, furniture manufacturer or consumer products wholesaler. The competition is many and varied - anywhere from specialty niche players to large corporations.  For the furniture manufacturer, is their competition Ikea, Pottery Barn, Thomasville or imports from China? Maybe all of the above. It can be a challenge to identify your most significant competition and obtain the desired competitive intelligence. 

Should you be worried about your competition? 

Yes, to a degree. But first - focus on your customer. Identify your target market, internalize their buying criteria and deliver exquisitely. Understand and be prepared to react to consumer trends as well as global developments. Identify those competitors which most closely mirror your business and glean what you can from them. How do you stack up in key areas? Keep an eye on the competition and the industry, but don't obsess. Rather, focus on executing your business model flawlessly. 

It's great to know what your competition is doing. Just make sure that, given your market, it is worth the effort. 

Point Your Business Where it Needs to Go!

Best Wishes,

 
Kelly
©2013, Turning Point Financial, LLC