Small Business Strategies: You vs. Competition

I’m as competitive as the next guy (or girl). Truth be told, probably more so. But when I switched my focus from corporate branding to small business, one thing I learned quickly is that your small business will succeed or fail based on YOUR business, not the business of your competition.

Yet I hear a lot of small business owners talking (and yes, sometimes whining) about what the competition is doing. Rather than focusing on their own business, they let the competition’s decisions weigh too heavily on their own business decisions. For example, my competitor is having a sale…so I better have a sale. Or my competitor offers this with purchase, so I better offer that as well. They are advertising in there so I better advertise there, too. The problem with this thinking is that it’s unlikely you know the financial situation or strategy of your competitors. When you base your business decisions on what the competition is doing, you’re making a decision based on incomplete information. And you’re being reactive instead of proactive.

The next time you start to question why you aren’t succeeding at the rate you had hoped, ask yourself these questions and think about your small business strategies.

• Do I sell something that is different from what everyone else offers? When you offer the same products and services as everyone else, you’re inviting people to price shop. If there is nothing else to differentiate you from the competition, expect price wars and the inability to stay in business for too long.
• Are those differences in my products and services easy to communicate? Can you illustrate the differences it in a picture or movie? Explain it easily in 30 seconds to a minute? If not get to work. People don’t want to think hard when making purchase decisions. Tighten up your communication about what makes your products and services different and the benefits to the buyer. Try to explain those differences creatively because you need to grab their attention and keep it!
• Does my target audience care about those differences? If you’ve developed a great product or service that is truly different from the competition, that’s great because it’s hard! But do you have a good grasp on whether that difference is important to the people you want to sell it to? Work on refining how you communicate those differences so they resonate with your target audience. After all, if you don’t have customers you can’t stay in business for very long.
• Do you have a target audience that is reachable? What I mean by this is they aren’t transient, they have electricity, they are involved in the community, etc. This may sound like a no brainer, but really put yourself in their shoes and think about what marketing messages they come into contact with each day (that you can afford)! Make sure you understand what their life looks like and how you can reach them because it’s unlikely they will find you without a little help from marketing.
• Is there a market for what you sell? Back to your target audience caring about the differences in what you sell versus the competition, it’s a lot easier to enter a market where there is an obvious need for what your products and services provide. For example, as a restaurateur, you may recognize a gap in the market for high-end, upscale sushi. Yet your community may not embrace a high-end restaurant serving raw fish. Determine first whether there is a market for what you want to sell. It’s possible to create a new market, but time, investment and a lot of education are sure to await you.
• Is the product or service consistent with your brand? Just because the competition is selling it doesn’t mean that this particular product or service is consistent with your brand promise and your brand values. Think about this before jumping on the bandwagon.

When you stumble, take a hard look at your target audience, your product differentiators, your communications about those differentiators and the market you are selling in. The answers to competing are there, not in copying your competitors.