There’s good news and bad news about running your own business. The good news is you’re not alone. You can find friends, family members, local professionals and other groups of people to help and support you.
The bad news is you’re not alone. There are other businesses offering the same kind of product or service that you offer.
But competition isn’t always a bad thing. Crushing your competition is usually not a realistic goal. Your goal is to create a unique business that makes it easier for possible customers to notice you and your services.
Your competition can help you learn how to run a business, reach out to potential customers, among other things. So, let’s look at some things to keep in mind while considering your competition.
Who are Your Competitors?
Let’s start with what kinds of competitors you might have. There are two types of competitors.
- Direct Competitors
Direct competitors are businesses that have the same type of product or service that you offer. For example, if you mow lawns or do any other type of landscaping work, your direct competitors are other landscapers.
Knowing about your direct competitors can help you discover ways to stand out, and hopefully do certain things better than them.
- Indirect Competitors
Indirect competitors are businesses that don’t have the same service or product as you, but they meet the same need or want, or solve the same problem that you try do for your customers. They just do it in a different way (and you have to make sure your customers understand why you are different).
Let’s go back to the landscaping example. Here, your indirect competitors would be businesses that encourage do-it-yourself lawn care, like local home improvement stores. So you may want to emphasize the convenience of using your business.
Knowing what kinds of competitors you have and why they are competitors can help you know what types of promotion will work best for your business.
How Do Your Competitors Position Themselves?
The same product or service can be offered in different ways. The way (or ways) a business presents its services or products is called positioning.
Finding out how your competitors position themselves is another great way to make your business unique.
Here are some questions you can ask about your competitors’ positioning.
- Do they appeal to certain groups of people, such as by age group, gender, interests, location, etc.?
- Are certain competitors luxury brands for customers who have a lot of money to spend and want the only the best?
- Or do they market to people who are mostly looking for a good deal?
You should try to position your business differently from your chief competitor(s). But it’s perfectly fine to have similar positioning as your competitors — there may be enough business for all of you. And there’s always something you do better than the competition. Over time, you will learn what works and what doesn’t when it comes to marketing, getting new customers, and keeping customers happy.
Competition is good.
Knowing who your competitors are and how they position themselves can help you create a better business. Keep these tips in mind, whenever you see similar businesses.
Also, stay tuned for an upcoming blog post about three specific questions to ask about your competitors.