Starting a new business from scratch is one of the most independent, exciting pursuits you can undertake. Due to the sea of information and helpful tools available now, it is much easier to set up and run one, and much more fun.
While you may have your idea up and ready, one question may still be bugging you from taking that leap. The competitive business environment may be forcing you to ask yourself:
“Should I do it?”
This is a good question to ask, as all entrepreneurs (especially if you’re doing it for the first time) do come across thoughts like, “All good ideas have been executed already.”
Contrary to intuition, having a certain amount of competition can be helpful – and a competitive business strategy is best for the growth of small businesses. Inside this existential question for your business, you should analyze these different areas:
The Competitive Market
It may be tempting to get to the exciting stuff of setting up a business – but it is always good to conduct your research first.
You may feel that your product is perfect for the market. Nothing like it exists.
Or you may be overthinking competition exists already.
In both these cases, market research is a tool that comes in very handy. It can help you:
(a) Identify your market segment
Your market segment is the ‘segment’ of people from the ‘market’ who will be the ideal customers for your product. Identifying and understanding this group of people will help you optimize your product.
As you understand the problems they face, and how they like to solve them, you can identify where in the process you can make it easier for them.
(b) Understand Market Trends and the Market Picture
By conducting appropriate research, you can identify if there’s a market for your idea. It can help you determine your unique niche and how you can solve problems for that niche.
You can see if the industry you’re in is declining or thriving. It is best to go ahead into further stages of business development if the industry is stable and thriving/ new and on the road to a thriving future.
These two steps will bring you to the essential part of the analysis:
(c) Identify and Study Your Competitors
Your competitors, even if they’re not entirely similar, are your ideas put into a business. Healthy competition can look scary – but it is what makes the market colorful.
If many companies are doing well in your niche, it also means that people ARE looking for what you’re offering.
You can analyze your competitors to identify the trends in your niche, see what works and what doesn’t, and get a clearer picture of how running your business would be.
You can analyze their best practice strategies and content to apply them to your own business. Further, you can also see where they failed/ tests they conduct to save time and save yourself from making those same mistakes.
You can also look into how they nurture their leads, how their sales funnel works and how these could be improved to apply to your business model.
There are various tools available which you can use to analyze your competitors. These can help you track changes in your competitor’s websites, emails, social media campaigns, website tests – and their overall digital marketing strategy.
The deeper you look into your competitor, the more insight you can gain on how to improve your business.
This also has another helpful effect. As you understand what your competition is offering – you can even get what they’re missing – which can help you strengthen your proposition. This will again, make your product unique, and add value.
The user is the heart and driving force of any business. Great businesses are built on great ideas, no doubt, but those are ideas that add value for their users.
The users who are in your target segment can provide you a gold mine of information. Here are ways in which they can help various aspects of your business plan.
(a) They’ll help you identify if your product is needed
Sure, you feel like your product could help out a lot of people – but you need to ask your prospective customers if they would be using something like it.
For example, if you build software that sorts company files with a subscription price of 300$ a month – would a business buy it? They could just decide to outsource it pay a human to do it.
This exercise will help you in finding out if the users need your product. It can also help you in setting up a pricing range.
(b) They’ll help you see If your USP works
Your unique selling point (USP) is what sets you apart from other competitors. For determining the USP, it is best to learn about the problems the users face in real life, and the services they use to solve those.
While giving you an idea about your competitors, this will also tell you about the pain points of the user straight from the inside. Further, you can ask the problems they face with the current tools and services they use. It will help you identify where your competitors are missing the mark – and where you can make one.
If people are looking for alternatives to the current services, it is a tremendous opportunity to jump to. You can identify similar problems seen as a pattern among various users and build on that.
This will help you improve you USP further and evolve it into adding more value to the user.
For example – You’re developing customer support software, and many users tell you about not being able to sync their invoices to their email. This is a problem they face on a day to day basis and has not been solved yet.
You add this in your USP – and these users will be glad to shift over to your service.
The best ways of connecting with customers/prospects are usually by conducting interviews/ surveys.
These require significant efforts from you as well the consumer – another useful tool for analyzing the customer is through social media.
Social media is a significant communication channel for companies and their customers – and by tracking your competitor’s social media, you can get an insight here. This is another feature which competitor monitoring tools offer. This can also help you find and use channels where your competitors are not yet connected to their users on, and exploit it to catch up.
Many young companies face the problem of meeting the large “sharks” – the bigger companies which may be dominating their niche, and competitor analysis is how they can get ahead.
So, if you were questioning yourself about whether or not you should go ahead with your business idea – the best way to answer that is to do some research.
Once you find your value proposition, the only thing that stands between you and massive growth is how you promote yourself better than your competitors.
All the best – to more growth and great business ideas!