Last month we discussed coming up with a business idea and finding a target market. If you missed that article you can read it here. But after that is established, you must then analyze the competition. This is not only important in order to see what others are doing, but you need to realize what you are up against and if you could survive. Here’s what you need to analyze when your Starting a New Business: Analyze your Competition.
1. How many companies are in the industry?
Are there thousands of businesses in your market (such as clothing lines) or are there only a select few (such as telephone service providers)? Knowing this information will give you an idea of how competitive the market is. If you have endless amounts of competition, it is going to be a lot harder to gain customers.
2. Research the most successful and popular companies in that industry
Researching successful companies will give you a deeper look into any given industry. Make note of their business strategies and marketing campaigns and see if you could realistically compete with that. Then take a look at smaller companies and see how well their business is going and how you can outdo them. The most basic way to find out information is to check out their website, blog and Google their name. See what other people say about them on review websites like Yelp. To go even further, look for websites that will provide you with evaluations of competitor performance reports. This will give you an overall idea of their success. Make sure to cover all angles and check out everything that you can including newsletters, seminars, podcasts, etc. The more information you have about your competitors, the better you will be able to outperform them. Here are a few websites that may prove to be helpful.
3. Pay Attention to Social Media
Keep track of the competition by reading their tweets and posts on social media pages. This can give you an idea of their marketing tactics, sale schedules, and get insight on how they promote their business. Evaluate how competitors engage their followers and create discussion. This will not only help you understand the way these businesses interact with their customers, but then you can incorporate similar tactics when operating your own business.
4. Call Them Yourself
It may sound too simple, but you can usually ask the company questions directly depending on how you phrase them. Inc.com suggests something like this: “if you want to know how many people work there, you can say: ‘I’m looking for individualized attention, and my fear is that your organization is too large, and I’ll get lost in the shuffle. How many coaches do you have on staff? Oh, wow, that’s quite a few. How much support staff do you need for a team that size?'” These are just examples, but asking questions in this fashion may help you get the answers you are looking for. Write out some questions beforehand and see what information you can gather. It never hurts to try. If they have a physical location near you, go visit them. See first hand how they treat customers, staff, and the overall store ambiance.
There are endless ways to learn about your competition, but you must be sure to gather as much information as possible. Once you have everything collected, you can make an informed decision on how to approach it. This analysis will give you the ability to come up with a more specific business plan for a successful launch. Stay tuned for the next installment on this topic. For more information see these references below.
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