Business Tips

Know the Competition

Before you open your small business, first consider the competitive environment. Competitors are everywhere. They can be in the form of other small businesses like yours, big box stores, drug or grocery store chains, catalogs, or the Internet. A vital part of researching your business is to identify who is competing for your revenue dollars, where they are located, and what products or services they provide.

But, don’t stop there. You need to drill down a little further to identify their strengths and weaknesses as compared to your business. Find out information on how long they have been in business, how frequently they advertise, and information on their quality level, pricing structure, product lines, and reputation. How do you accomplish this? All you have to do is play customer.

First, give your competitors a call on the phone. Do they seem interested in answering your questions or are they too busy. How polished are their phone skills? Next, drive down to their store. Check out their location, accessibility, parking, signage, visibility, how well the landscaping is maintained, and the general appearance of the building and lot. Watch for awhile to see the level of customer activity going in and out of the store.

Now go inside. Check out their lobby and restroom for cleanliness. Pick up a price list or walk the store to view their inventory. Do they carry lines of merchandise that your customers might want? Are the displays attractive and well maintained? Compare some prices on key merchandise items. Ask for customer assistance and evaluate the quality of the service you receive. Strike up a conversation with a few customers and ask what they like and dislike about the store.
Armed with this new information about your competitors, your job is to see how you fit in the local market. Be honest. Consider your level of quality as compared to your pricing structure. Is your assortment of merchandise broad enough, current, and properly signed and displayed? Are your employees pleasant, helpful, knowledgeable, and energetic? Is your store’s appearance neat, attractive, and well maintained? How does your return policy, warranty, and delivery area stack up? So now you know who your competitors are, where they are, and what they do. Learn from it. Make necessary changes to better position your business in the local market. Evaluate the ways your business is unique or better than your competition and use these in your future marketing activities. Oh, and
by the way, repeat this exercise at least once a year.