Unless you’ve come up with a truly unique and groundbreaking business idea, it’s likely that you will have competitors when starting your business. When it comes to certain industries, there can be a lot of competition. Examples of highly competitive businesses include hairdressers, coffee bars, plumbing companies, insurance companies and dentists.
Many budding entrepreneurs are put off when they realise how much competition is out there. But really, should it matter? Can a business have too much competition? This post looks into whether competition is really a problem – or a blessing.
Competition usually means there is a demand
If there are lots of established businesses out there already doing what you’re doing, it usually means that there is a demand for that product or service. If there wasn’t a demand, most of those businesses would have collapsed shortly after launching. You should only be worried if new competitors are regularly popping up and disappearing (for example, if you want to start a vinyl store and lots of different vinyl stores in the area keep opening and closing, this could be a bad sign).
Having no competition is usually more worrying as it means that there may not be a demand for your product or service. Market research such as surveys and focus groups can be the best way of determining whether you’ve identified a gap in the market or whether there is no demand.
How you market yourself matters
A lot of companies worry that they won’t be able to stand out from the crowd if there are already lots of other businesses providing the same thing. This is where marketing comes in. By creating a unique brand and finding creative ways to promote your brand, you can stand out without offering anything new.
Many competitive products like craft ales, cosmetics and perfumes rely heavily on a unique brand including a distinctive name, logo and color scheme. It could be worth working with branding agencies to develop your brand. You then need to work out unique ways of getting your message across. You could work out the best methods by looking at what your competitors are doing. Are you competitors failing to use Facebook effectively? Consider making Facebook the focus of your marketing.
Success comes down to how fast you can evolve
In a competitive industry, you have to be constantly looking for new ways to stand out and new ways to outperform the competition. This involves constantly analysing your competitors and making efforts to evolve so that you are better or different.
Success comes from being able to evolve fast. Fail to keep up and you won’t make it. If your dream business involves creating a model and sticking with it for years, starting a business in a competitive industry may not be right for you. If you’re prepared to keep changing and improving your business model, you’re more likely to thrive.
Establishing a reputation can make things easier
You may not have to evolve so fast if you already have a reputation to fall back on. This is why it’s so important to build positive reviews and develop a presence as a new business in a competitive industry. Once people know you and trust you, they’ll choose your business without taking too much time to explore other options. Many older businesses in competitive industries continue to thrive without having to change their business model frequently for this reason – they have a reputation.