Competition can be a funny thing. Any business would love to be the top competitor in the game, but that means there are likely one or more competitors gunning for your spot. Whether you choose to enter the market to compete on friendly terms or if you're out there to leave the other players in the dust, here are 5 ways to stay ahead of your competition.
1. Know your competitors
How can you compete if you don't know what you're up against? Once you've established exactly who you're battling for customers, it's time for further investigation. Check out how long they've been around, what they're offering, and what they do well. Check out their website, and if they have a physical location, pop in the store to feel out their customer service. Whatever you do, don't delve into a business venture without a clear understanding of what you're up against!
2. Don't compete on price
This might seem counterintuitive, but it's very important. You have likely already run the numbers and researched quite a bit to determine exactly what your businesses costs will realistically be, and therefore what you can afford to charge for your product or service. If you find the competition's prices higher, it's okay to use this to your advantage and advertise this fact. But matching the lower price of your competitors can hurt you. You still have your own costs to cover. Better to compete with stellar customer service, special offers, and a better product. A customer being treated well won't mind paying a little extra to work with you.
3. Learn from them
There's always something to learn in the entrepreneurial game. There have been millions of businesses opened before yours, and each likely has a lesson to offer. Take a good hard look at the companies you have identified as your strongest competitors, and try to understand what makes them so great. Why do customers walk through their doors, click on their website, or pick up their phone to call them? Likewise, where are they lacking? Do they have poor customer service, unappealing aesthetics?
If you have the opportunity and really want to do your research, try and find businesses like yours that have gone out of business, and identify why this happened. Often, there is just as much to learn from the failure stories as there is from those that have succeeded.
4. Play nice
Have you ever heard the saying, "keep your friends close and your enemies closer?" This essentially would be the context of this key for driving your competition crazy. To be fair, your competition really isn't an "enemy" per se; it is better to think of them as business owners as well, working hard to sustain their company just like you. It never hurts to remain friendly with the competition, especially if there's the opportunity to share mutually beneficial information. There is little benefit to pitting one business against another like the old rivalry of the Hatfields and the McCoys.
5. Keep your guard up
Not to discount Key #4, but it's vital to keep an eye out for predators in your industry. Unfortunately, there are less than scrupulous business owners out there, and you just may find yourself up against such a company. Though you may be playing nice in friendly competition, you should always be on the lookout for others who may not.
Your business doesn't exist in a vacuum. This could be considered either a good or a bad thing. In any case, understanding your competitors is a vital component to running any small business.
Matthew Toren is an Award Winning Author, Serial Entrepreneur, and Investor. He Co-Founded YoungEntrepreneur.com along with his brother Adam. Matthew is co-author of the newly released book: Small Business, Big Vision: “Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right” and also co-author of Kidpreneurs.