When you’re starting any business it’s always a daydream to imagine you’ll have a clear run. No competition, nobody trying to copy, undercut or crush you. Just lots of happy customers who have no choice other than to give you their money. But in reality is that a dream or a nightmare?
Two thoughts and things
One: Why is nobody else in this space? There is bound to be a reason. And it won’t be because nobody has thought of it. Look carefully to see if there is a gap and, if so, why there is a gap.
Two: What happens if you have no competition? You have no reason to try hard, let alone harder. You’ll back off, slack, not bother refining or updating, you’ll be too busy taking the money and taking a holiday. Right up until someone comes in and wipes you out.
No competition means one of two things:
1. The idea has no legs. It’s either too expensive to run in the long term and your idea will run out of money, or it requires too much skill/labour or there is not enough of the target audience to fill the demand for this business.
2. Your idea is well and truly unique, no one has come up with the idea and you are the next Alexander Graham Bell. (Option 2 is highly unlikely; they say not to reinvent the wheel, but that is exactly what people with ‘unique’ ideas aim to achieve.)
What is a Competitor?
Competitor sounds a bit like predator, right? And, just like a nervous gazelle in the rolling African plains, you need to be on the lookout. Because sometimes they’re huge and coming right at you and other times they’re hidden from view, ready to spring out and rip the heart from your business.
The key of course is to be either too big, too fast, too small or too poisonous for any predator/competitor to attack you. But let’s first focus on those competitors.
Because a competitor is not just someone in the same business, or a company offering similar products or services to you.
Before you even think of giving up at this point, don’t imagine that you can’t go up against anyone. Be realistic but passionate about your idea and you will succeed.
You need to keep both eyes open all the time. Because you need to see the competition you need 360-degree vision. Because who is the competition?
Let’s take an example. You want to open a vegan eatery. You reckon that since you operate in London, a simple pop-up would be the best start. So who do you need to look to as competition?
Naturally, other vegan pop-ups, take-aways and restaurants (core competitors)
Vegetarian versions of those
Businesses that deliver vegan meals, either fresh or frozen (peripheral competitors)
Online outfits that will deliver vegan/vegetarian meals in kit form (peripheral competitors)
And remember, while a vegan won’t eat in a steak house, some customers of the steak house might quite like vegan food sometimes. (Something to bear in mind when marketing, thus avoiding any aggressive vegan pitches.)
Competitors are Teachers
While competitors can be a threat, they can also be your best teachers. They’ve often found solutions to questions you may be asking, so look at their operations.
• How are they doing it?
• What do they charge?
• What can you see of their business model?
• Where are they getting staff from?
• Do they have a clever and well-funded advertising/social media programme?
• Do they have a Unique Selling Point?
• What sort of packaging are they using?
• Why are they located where they are?
• How robust are they to future problems like pandemics?
• Where are the gaps?
Answer these questions and you’re now considerably better informed not just about the competition but about your own place in the food chain. And next week we’ll continue our dive into the competition, and we’ll dive deeper.
See next week for Part 2!