For a small business in today’s economy, one of the most crucial keys to success is knowing what your competition is up to at all times. If you don’t think your competitors are out to eat your lunch, you’re not going to be around very long. And in today’s global market, competition can come from new and unexpected places and can pop up at any moment. How do you stay on top of it all?
Start by compiling a list of your competitors. Assess all the markets where you sell (local, regional, national, global and online) and which competitors exist in each of them. You need to know what your competitors are doing and be able to answer these questions about them:
· Where are they? Local, nationwide, global? Brick-and-mortar only or ecommerce?
· How big are they? Are your competitors small businesses, regional chains or huge multinationals?
· How do they sell? Do they sell direct, to wholesalers, through reps?
· Business model:What do they make their money from?
· How do they price? How much do they charge and do they offer different pricing structures, such as bundling options? Do they discount?
· How profitable are they?How do their profit margins compare to the industry average?
· What’s their branding and marketing strategy? Can you define their brand in a single sentence? What avenues do they use to market?
· How are they staffed?Do your competitors have full-time or part-time employees? Or are they virtual or outsourcers?
· What’s their overhead?Do they have high or low overhead costs?
It’s easier than it used to be to gain this kind of information, but it still requires some time and effort. Here’s where you can find the facts:
· Your industry or trade association won’t tell you details about specific companies, but they’re a good place to gather benchmarks and averages for your industry.
· Regularly read trade magazines, blogs and websites relevant to your industry and your competition to keep up with news about their plans.
· Go online and search your competitors; set up a Google Alert on their businesses or product names to get the scoop whenever they make a move.
· Get social by signing up for their email newsletters and watching their Facebook or Twitter accounts. These days, many companies announce new products or services, or survey customers about planned initiatives, using social media, so this can be a good insight into future plans.
· Contacting their customers can work well for a B-to-B company. They’ll often be quite honest with you about what they like and dislike about the company, and may give you insights into how to compete.
· If you know the competitors’ suppliers or have a relationship with them yourself, suppliers can also be a great source of information.
Once you’ve got the information, don’t just sit there—do something with it. Assess where your competition is weak and how you can turn their weaknesses into opportunity for your company.
Rieva Lesonsky is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Follow Rieva at Twitter.com/Rievaand visit her blog at SmallBizDaily.com. Visit her website SmallBizTrendCastto get the scoop on business trends and sign up for Rieva’s free Trendcast reports.