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Scoping out the competition is an integral part of the research stage when growing a startup. This due diligence goes a long way towards boosting your chances of hitting it big. It serves as a reality check, which helps you to get to know your competition and how you can differentiate from it. Taking all this into account, this research must not be an afterthought. You do not want to fight an uphill battle with established brands. But, even if there is no other option, it is much better to be in the know and well-prepared for the challenges ahead. So, here is how to navigate this crucial stage and enter the market with a wind in your sails.
A broad view
For better or worse, startup owners cannot rely on their gut feeling. Many entrepreneurs assume they are doing something unique and awesome, only to see this misleading notion coming to haunt them later. So, what you require is a realistic assessment of the business landscape you aspire to grow and thrive in. In a nutshell, the process is aimed at properly identifying the competition and its methods, possible advantages, strategies, and tactics. And typically, competitor research is done separately from overall market research for a business plan.
Ask yourself what separates your organization from others. In case the answer is nothing, you have a problem at hand. Namely, what you do not want to see is a bunch of other companies doing the same things as you. It is rather difficult to break out in a field where the level of competition is high. But, the existence of competition does not have to dissuade you from launching your own business. It should just shape your approach, strategy and thinking. Also, remember that competitive analysis helps you come up with a killer investor pitch and secure funding.
Online research
For starters, take a closer look at your local market as an entry point. Educate yourself on goings-on and trends. In a sense, conducting research has never been easier, considering the amount of information and tools available online. Many of them are free or at least affordable, even for those operating on a shoestring budget. They work particularly well for ecommerce and online-focused companies. One of the simplest ways to pull it off is to type a few relevant terms in Google. See what shows up.
Do you see brands that look like competitors? If so, you might struggle to gain online visibility and capture organic traffic. That is to say that you need to plan your search engine optimization (SEO) strategy in advance and also nail it with content and social media marketing. Note that there are other sources worth checking out. This is especially true for paid surveys that offer a variety of relevant information regarding consumer preferences when it comes to brands, products and services.
Traditional method and analysis
On the other hand, if you are opening a location-based business, such as a restaurant, you might need to approach things differently, in an old-fashioned way. Get into a car and cruise around the neighborhood where you want to start the business. Drop by other venues to gauge their quality and appeal. Take into account their aesthetics, size, menus, staff and other aspects. All these elements should shed some light on your own path towards set goals.
In any event, it is a good idea to put everything in the writing instead of relying on imperfect memory. Once you obtain all the facts and figures, dive into the analysis phase. If you struggle to make sense of it all, hire professionals with industry or location-specific expertise. You can also tap into a business network, local associations, alliances, mentors and other resources. Finally, bear in mind that things are not set in stone. Keep an eye on local news, industry publications, market trends and business events.
Cover all the bases
Big dreams and ideas cannot take you far in a highly competitive arena. Like it or not, you must do your homework and see who you are up against. Therefore, get familiar with the ins and outs of the local market. Gain valuable insights and make informed decisions regarding your brand, market positioning and offerings. Do your best to set yourself apart from the others and offer something they cannot. Make a compelling case for your business and you should be able to secure your delicious market slice.
