It’ll come as no surprise to any entrepreneur that their new idea has a harder chance of growth and survival if they’re entering a market full of established competitors.
Beyond the challenge of establishing traction with customers that have multiple options, this situation also creates a “dog-eat’-dog” environment.
And with businesses contending with each other in this aggressive, first past the post manner, it can be easy to fall into a reactive and hasty approach to competing.
Understand the level of competition
Rather than jumping in head first, you need to develop a go-to-market strategy. As part of this, you will naturally come to understand what competition you’ll be facing and their relative strengths and weaknesses.
Define your USP
Defining your unique selling point is the first crucial step of any new business and will allow you to clearly communicate how your product or service adds value in a tangible and unique way. Believe me, if there is nothing you can point to then you are destined to fail.
Focus early growth plans on immediate sales
Once you have the right product or service, enter the market with a strategic approach. Early growth plans need to be focused on immediate sales. Dream big but with your feet firmly on the ground. Only sales and cash will pay those monthly invoices.
Do what you do - and do it better than the rest
Your original business idea, whether a conscious or unconscious decision, would have had one end goal in mind, such as:
- Overcoming a specific challenge facing an industry or market
- Improving the way a product or service is currently delivered
After you take the business to market, it can be tempting to look around you at what others are doing and try to compete on the basis of their ideas or marketing approach. Sure, learn from them but develop your own unique way of doing things. Trying to replicate what others have already done will only distract you from your own goals.
If you feel you have a product or service that can compete with existing solutions, focus on that and get it right. Then reassess and reinvent that one specific idea as and when required.
Don’t overreact to competition
Even when you have an established brand, it can be hard not to retaliate every time a competitor announces a launch or new initiative.
My advice would be: don’t overreact.
Rather than trying to compete in their space, manage the risk competitors pose.
There are a number of ways you can do this, including:
- Protect your own idea - sign exclusivity contracts with customers, NDAs with suppliers and, where possible, secure legal protection for your idea, such as a patent.
- Partner with established players - if there’s something your clients are consistently asking for but you know you’re not yet ready to deliver it, partner with someone that is. If you’re a tech-based business, integrate with platforms that specialise in the areas you do not.
- Don’t put all your eggs in one basket - Don’t invest every last cent in one business idea, have a fallback plan. And have alternatives in mind for every stakeholder in the business - people, suppliers, distributors and even customers.
Work hard and stay humble
As a founder, it’s important to not don’t drink too much of your own kool-aid and get caught up in the notion that what you are doing is different and better than anything else. Continue to work hard to ensure you can point to tangible advantages a customer will pay for.
The early days of a new business are exciting and daunting - taking time after establishing the business to really understand the market, your early growth plans for at least the first five years and your strategic, hands-on approach for the first six months, will put you in the strongest position to launch and grow with confidence and integrity.