“I don’t have any direct competitors.” Far too often, as a new entrepreneur, it can be easy to convince yourself that this is true — getting caught up in the nuances of your offering as being truly “unique.”
However, a slightly different approach or take on a product, service, retail store or restaurant doesn’t exempt any small business from competition. Being honest with yourself about your true competition is critical to empowering you to define, capture and grow your niche and share of customers.
Here are 4 all-too-often overlooked, but very real, sources of competition. It’s likely your business has at least one competitor in each and every one of these buckets.
- Actual Competition: On more than one occasion, I’ve heard an entrepreneur try to convince him or herself that a very real competitor just isn’t the same. There was the moisture-wicking sleepwear company that tried to explain why 88,600+ Google hits for this term were totally different because they didn’t use the same material. I heard this same argument from a start-up textile company based on thread count and from a video storytelling one based on production style. Bottom line — if another company solves the same customer problem with a near-similar product or service, they’re a competitor.
- Substitutes/Others in Your Category: Competition comes in the form of not only others who offer the same thing you do (even if in a different way), but also in any substitute offering. For example, when a new indoor trampoline facility for kids opens, it enters the market competing against every other recreational offering available for after-school activities, birthday parties and rainy day entertainment. So while there may be only one trampoline hot spot in the area, the bowling alley, indoor glow-in-the-dark mini golf course and bounce house emporium are all competition for mom and dad’s wallets and little Johnny’s attention. The same holds true for the Greek restaurant competing against the sushi one.
- Google and YouTube: Whether you’re a service provider selling advice and ideas or a company that offers products that make any aspect of life easier, the massive quantity of information available for free online provides would-be customers with a means to tackle just about any challenge — from drafting a will to building a fence. While the DIYer is likely a budget-conscious consumer and less likely to be your customer, Google is a competitor to far more than the likes of Yahoo! and other search engines.
- Other Priorities: This one is tough to quantify or qualify, but if you sell a non-essential product or service, you’re competing against every other discretionary purchase and necessities, too. Other than a teeny tiny segment of the population, all customers have limited dollars to spend. So while a customer might be super keen to hire you to organize their garage one day, if they’re hit with an unexpected medical expense, the tools and sporting equipment piled in corners might have to wait.
Be honest with yourself as you look at your competition. Ignoring it can leave you ignorantly blindsided, while being realistic can help frame your business’s pricing model, target customer, promotional strategy and more. While the confidence to pursue dreams is one of a successful entrepreneur’s greatest assets, living in a dreamland brushing off competition is a complete liability.