Most entrepreneurs become concerned about competition early on and never quite shake their fears. In fact, besides tax issues and the matter of health care coverage for their employees, a recent survey reveals competition is the biggest concern of small business owners. And most of them are far more worried about the guy down the street than they are about being stomped by some Fortune 500 corporation.
Do Some Sleuthing
If you’re truly concerned about the competition licking at your heels, check their businesses out thoroughly yourself. You need to experience what customers are experiencing there. See how their pricing or product mix or the overall encounter compares with your own. Certain other ways of spying on your competition can be helpful as well, as long as they’re all ethical and above-board. Greg Hamilton, for example, operates a Curves International franchise in Bakersfield, California. One of his best ways of getting qualified leads for his women’s workout facility is to leave “lead bags” at other businesses around town where women can drop a slip with their contact information if they want to find out more about Curves. Well, a competitive club in town has started to do the same thing – so Hamilton isn’t above sneaking a look at how many slips are in his rival’s lead bags versus his own.
Form a “Club”
Even if your business competition is primarily local, every now and then it’s a good idea to see how other companies in your industry, around the region or across the country, are doing things as well. You might even want to create an affiliation of geographically dispersed companies in your industry (therefore ensuring that they are non-competitive with one another) who could help one another immensely because they’re all in the same business and faced with basically the same challenges.
Take Some Pre-emptive Steps
If it’s not too late, ward off competition from the start by raising the barriers to entry in your niche. You might try to develop exclusive relationships with distributors of the hottest merchandise in your field, for example, which prevents competition from overlapping your product mix. Or issue a price guarantee that ensures your place is the last one a customer will visit before making a purchase decision.
Re-energize your Customer Base
It’s always going to be true that your best customers are the ones you have. Figure out every way possible to make them even better customers. That probably starts with having a database of information about them – whether you deal with B2B purchasing agents or ordinary consumers – and using it to the hilt. Contact them about new products or with reminders that they’re on your mind (and, implicitly, not on your competitors’). Continually look for opportunities to cross-sell or up-sell.
Get Back to your Entrepreneurial Roots
If you’re going through a period of self-doubt, sluggish sales, or some kind of paradigm-wrenching change in your startup business, scrape everything else away and get back to the bedrock of your business. Recall the spirit and creativity and enthusiasm that led you to startup in the first place, and then do whatever you can do to rekindle those attributes. Maybe it’s simply getting away from the business for a few days to escape your routine, recharge your batteries and get the entrepreneurial juices flowing again. Or maybe it will take a brainstorming session with a handful of your key employees, the way you used to do. Whatever it takes, clear away the fog of war so you can re-engage the insights that made you successful in the first place.
Our Bottom Line
Stop feeling beleaguered or sorry for yourself when competition pops up or starts getting feistier than it has been. Use it as the opportunity you’ve been waiting for to re-examine and revitalize your own startup business.