Conduct A Competitive Analysis

Posted byLeah Ward-LeePosted inBusiness Planning, Why Start a Business for less than $1,000
Competitive Analysis

Why Every Start-Up Should Conduct a Competitive Analysis

When you’re launching a low-cost business start-up it’s tough not to be overwhelmed by the number of steps required just to get your product to market. Taking the time to conduct a competitive analysis can seem like a waste of time.  

However, you have the advantage of seeing what is working for your competition. Very often you can leverage what they’ve already learned to actually save yourself time. In some cases, studying your competition can help you figure out how to increase the market demand for the product or service.

How To Conduct a Competitive Analysis

Start by identifying the top competitors in your marketspace. Do a simple online search using Google, yellowpages.com, or yelp.com.  Pick five who are successful and review their:

  • Products and Services
  • Physical Location
  • Marketing Approach
  • Prices
  • Customer Experience

For each of your competitors, develop a strategy for how you’ll co-exist in the marketplace. For example your competition has:

  • Both a bricks and mortar location and a huge online presence and you have a small EMAIL list of friends and family. Your mitigation advantage is you don’t have that overhead so you can produce your product less expensively.
  • A mature product set and you have one or two products or services. Focus on marketing those products to a niche market they’re not targeting or improving your services using the feedback of your initial customer base.
  • Can afford to advertise. Offer your initial customers a discount on their next purchase.

Keep YOUR Competitive Advantage

You’re the “New Kid in Town”. It’s important to remember you’re launching a new business and need a successful launch.  Limiting your launch to a manageable set of customers or clients ensures you can successfully deliver your product and have experience with your complete business cycle. It may feel like an extra step, but it mitigates the risk of not being able to deliver your product successfully.

Leah Ward-Lee is a management consultant and business writer based on Amelia Island, Florida and the author $1,000 Start-Ups.

Published by Leah Ward-Lee

Leah Ward-Lee, the author of "$1,000 Start-Ups", is a serial micro-entrepreneur. She opened her first business at ten after lobbying for and receiving a shoe shine kit for Christmas. She pulled her wagon through the neighborhood, going door-to-door, offering to shine her neighbor’s shoes for twenty-five cents a pair. Once her wagon was full, she took the shoes home and polished them. Unfortunately that business was short-lived. She hadn’t tagged the shoes and couldn’t remember whose shoes were whose, so her dad went with her to retrace the route until every pair was returned. Since then she’s had businesses developing and teaching college courses, instructing aerobic classes, owning half a plane that was rented to a flight and maintenance school, and renting homes. She’s also owned a consignment store, a gift shop, a gift basket business, a consulting firm, hosted The Executive Toolbox (a weekly radio show), and a publishing company. She also spent twenty years in the US Army, served as the Chief Information and Technical Officer for two major insurance companies, and has a second career as a management consultant. Leah resides in Dallas, TX and on Amelia Island with Sammy and Goliath, her two rescue dogs.

Comment

%d bloggers like this: