10/18/2017

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Know Your Competition

Competition is a good thing in a healthy business environment because it opens the door to economic growth by giving consumers a wider choice of products and services that they would not get otherwise. Competition helps the economy stay vibrant with change and provides an avenue for the sharing of wealth.

Meaningful competition gives rise to the development of new and better products, new ideas, and it increases technological and biological advancements and growth, thereby helping to keep the prices of goods and services, for the most part, relatively low and affordable.

In business, completion can take on many forms, so you have to know what to expect and to know your limitations. If you are an effective leader in a small company, you can't expect to compete right away with retail giants such as Wal Mart, Sears, Target, JC Penney, or other large companies. To effectively compete, you have to find a niche that attracts customers by providing better service and products, by providing a small town atmosphere, and other conveniences and novelties that the big companies don't offer.

If you start a restaurant, it will be hard to provide the choices that nationally known brand named restaurants such as Benihana, McCormick and Schmicks, Red Lobster, Shoney's, or Denny's offer. But many people like small and personal hometown restaurants where they get to know the owners and mingle with other regular customers. You can offer your own delicious foods and styles of cooking.

No matter what type of business you propose to open, whether it is a cleaners, bridal shop, bicycle shop, barber shop or beauty saloon, neighborhood postal center, liquor store, tattoo parlor, real estate office, or any other business, the competition is already there and you have to develop a plan to compete with them.

If you intend to start a business that require making bids on jobs, you should make sure that you have the knowledge to put together a coherent contract so you won't underbid or overbid, and you should have a general feel as to how the competition will bid.

An effective business plan includes making a serious study of all areas of competition in the field that you are intent on competing in. Although competition is healthy for all businesses, there is such a thing as getting bogged down, and if you don't recognize your competition for what it is, you may end up struggling to find a niche in the marketplace. You have to be able to exploit the weaknesses within the competitions own game plan.

Don't be shy about asking questions because most people will talk to you and give you a heads up on what it takes to succeed. Find out what works best for them and see if their business model might help you compete in the marketplace, but don't become a carbon copy of the competition.

There are questions that you should ask yourself about your competition.

  • Who is the competition and how long have they been in business?
  • Do they have a lock on a particular clientele, and if so, can you break their hold?
  • Do you think you can compete by offering better service or better quality products?
  • Are you going to find a certain niche that you can develop or are you going to compete in earnest with whoever the competition is?
  • Once you study the competition and determine that you can compete, you should still proceed with caution. In business, you should never underestimate the competition and never overestimate your own potential.

If you already own a business, or if you are about to start one from scratch, you should have an idea of who your competitors are and how they are doing. Do the research, study the competition, formulate a plan for success, and you have all the ingredients to become a successful entrepreneur.

 

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