7 Ways To Use The Competition To Your Best Advantage When Starting a New Business

Shopping your competition, first and foremost, shows you how they compare - or stack up to - the business you’re in the process of organizing. Do this, and it’s easier to spot similarities you can change, products or services you can discontinue, for example. Checking out the competition can help you in many ways. Even when deciding on location or creating marketing plans.

In fact, once you shop your competition other new, or better, options may present themselves. Allowing you to take your business in a different direction, or to a higher level than you first thought possible.

Here’s 7 important ways shopping your competition can help your business succeed and profit:

1. You’ll begin to see who their target market is. Are they similar to yours? If not, how different are they? Knowing this helps you to reach out to untapped or smaller markets successfully. It can also help you create a slightly different niche by presenting competing merchandise in a different, more effective or appealing way.

2. Knowing what products they sell can help you when buying both regular and additional merchandise. (Additional meaning add-ons to the main item sold.) For example, they carry purple widgets. Do research on whether green will sell. Is there a market for extra items purple widget buyers might want or need. Items your competition doesn’t sell. While it’s important to develop your own unique niche, it won’t hurt - in fact could help - when you carry similar items they don’t usually stock.

3. If they’re selling services, or Internet info products, you can determine if they’ve ignored a customer market you can develop. Or is there a market they’re not properly servicing? Which you can give a twist to and successfully take over. Is there a market too small for them, but perfect for you?

4. Shopping your competition, before starting a new business, will help you make better decisions about pricing and quality. Two of the most important things to consider when deciding on products and/or services to sell.

In fact, according to the U.S. Small Business Administration, inadequate, or uncompetitive, pricing is one of the top reasons small business fail. To know your competition is to know your business. Plus knowing competitors prices can help you better position your biz for the market you choose. For example, affluent, medium priced or very price-conscious market.

5. You’ll discover which vendors they buy from. While calling or visiting those vendors won’t give you private info about a competitors buying policies or prices they paid, you’ll get to know the vendor and their policies. Discover when new products or services will be available. What’s hot and what’s not. Facts about discounts, special pricing, for example. And the vendor may tell you what your competition doesn’t carry, which you can.

All this can help you decide when to place orders, when to have them shipped, for example. Even help you decide on competitive products to sell.

6. When you get to know your competitions advertising and marketing strategies, you can better plan your own. You’ll see which venues work for them, which don’t. How they position themselves. What their Unique Selling Proposition is. Also, you’ll discover whether their advertising plans, or times they run, will affect your biz. And how. How are these strategies similar or different from yours?

7. You’ll also learn about their customer service policies on competitive items. What their return policy is for damaged or changed my mind or this doesn‘t work for me returns. How can this info help you create, or re-create, your own?

Also very important: Shopping your competition allows you to see many of their strengths and weaknesses. And when you know what they are, you’re better able to develop a business which avoids what you can, and makes the most of your businesses strengths.

In the international bestseller "Blue Ocean Strategy", by W. Chan Kim and Renee Mauborgne, they say "Don't compete with rivals -- make them irrelevant". And shopping your competition will help you do just that. nn