Every company has its fair share of competitors, from the little guy next door to massive corporations. The hallmark of a quality small business is how it handles these obstacles, and that starts with research and proper planning.
Competition can often dictate the future of a firm, and their moves turn into fantastic strategies for new growth. However, small business owners should be careful not to spend too much time trying to predict what's coming next – it is a fine line between chasing other companies all over the place and keeping a finger on the pulse of the market.
Therefore, small business owners may want to pay attention to a few business and financial tips in order to analyze the competition effectively and reach more customers.
Find ways to dig deeper
There are competitors for every company, whether or not the small business owner wants to believe it. Worse yet, they're often after the same target audience, which means they'll quickly turn into another obstacle and headache on top of the long list of other tasks. However, it doesn't have to be this way, and understanding who else is out there can help bolster a financial plan.
According to Darren Dahl, contributing editor for Inc. magazine, there's more to research than just a Google search. While this should be the first step on the way to fully understanding the competition, it can't end there. Instead, small business owners should look at the keyword usage of the opposition, because that can dictate what audience they're going after. In addition to that strategy, their Internet activity should also be monitored, as well as whenever someone says something about them online.
Moreover, social networks can be a fantastic way to keep tabs on the competition, Dahl explained. Odds are, they're using sites like Facebook and Twitter to advertise, so that can say a lot about their strategies behind the scenes. Even more, customer feedback on social media can also be quite illuminating, and it could even present new opportunities for a small business to grow.
Be careful predicting the future
A small business owner is regularly faced with a number of challenges, from balancing business banking to guessing what the competition will do next. Therefore, it is tempting to incorporate a fair deal of predictions into the company, but that can be as dangerous as it is helpful.
Leonard Fuld, president and founder of global consultancy Fuld & Company, wrote for the Harvard Business Review that too many firms waste time guessing what is coming next. In order to avoid becoming one of those companies, he advised small business owners to stop worrying about market leaders. This is because they probably don't want to target the same group of customers. On the contrary, they have their own segment and they're perfectly happy being there. There are usually much more relevant customers and information to be tracking, instead of spending time fretting about massive corporations.
In addition, some small business owners focus too much on the product instead of the service that goes with it, Fuld noted. To be fair, the product is the flashy element, and it garners a lot of attention. Even so, the other things are what gets people really excited, like fantastic customer support, a quality warranty or other added conveniences. This is where one company can set itself apart from the competition. In many cases, products overlap, but the other market solutions can make a big difference. In that case, owners shouldn't worry too much about the future and focus on things they can actually control.