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List
who your competitors are and where they are situated in relation to your business.
Assess
what their strengths and weaknesses are. Outline
your unique selling point in terms of the advantage your
business has over theirs (i.e. quality, service, price, etc.)
Try to evaluate how they might react to you starting in competition
with them.
Many people who are considering starting their own business are
often unaware of many of the competitors that already exist. This
may be due to lack of research, being new to the area, poor marketing
by the competitors, or possibly a fear of looking too closely at
something that may be discouraging.
However, it is essential to find out who the competition is and
whether there is enough business for a newcomer.
The most important area of research is to work out how you are
going to take customers away from them. To do this you have
to find out what advantage you have over them.
Remember your potential customers are managing without you, and
unless you have a completely unique product, you are going to have
to persuade them to use you. Knowing what advantages you
have over your competitors will assist in achieving this.
How do you find out?
- send for information from them
- visit their premises
- talk to customers who use them
- send a friend in as a customer
- ask a similar business in another area
What you need to know about your competitors:
- who they are
- where they are located
- what they are selling
- how many they are selling
- how much they are charging
- are they large or small?
- What are their delivery dates?
- What is the quality of their staff?
- What are there credit terms?
- How quick is their follow-up?
- How long have they been in business?
- What are their strengths?
- What are their weaknesses?
Use the above information to work out:
- how their product compares with yours
- what advantage you have over them
- if there are gaps in what they sell
- if the market is big enough for you
It is also important to ascertain how your competitors will react
to you starting your business.
Will
they ignore you?
Will
they enter into a price war?
Will
they try some dirty tricks?
Your business plan will include:
- a list of your main competitors
- a brief description of the advantages you have over them and
how these will enable you to acquire their customers
your thoughts on what effect you think they will have on your business
Further Business Advice
The Enterprise Agency offers free and confidential
advice to businesses in North East Lincolnshire. If you have a
business idea and would like to give it the best possible chance
to succeed, then contact the Enterprise Agency on 01472 312121
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