When you are starting a business or have an idea for a product or service - you need to do your homework. It is important to look at the competitive landscape before you invest your money, and a lot of your time in a new venture. Who (or what company) is doing what you would like to do - or something similar. Simply put - if you want to open a watch repair shop- make sure there aren’t 10 more in your neighborhood - or close by. Unless you have a totally unique product or service (which is really rare) you need to understand how the competition will stack up against you.
One way to do this is to use a tool called a SWOT analysis. Strengths, Weaknesses, Opportunities, and Threats. Strengths - look at what your competitor does well - service, price, quality etc. Weaknesses - where are they vulnerable - could be quality, price, service, or other aspects of the business - location or customer dissatisfaction. Opportunities - where are they missing something. What could they be doing that you can do better. Threats - what can derail the business - outside factors, pricing, the economy, too many competitors in the same niche. It’s important to think this through very carefully and weigh it against what it will take for you to not only beat them at their own game but succeed and prosper. It should be said that SWOT should be applied to your own ideas or existing business to make sure you aren’t overlooking something essential to success.
It is easy to open a business if you spend all your money and time on it. It is hard to stay in business if you don’t know who your customers are and how to attract them, who your competition is and why your business difference is more likely to succeed.
If you would like help with your competitive analysis, click here