Underestimating or dismissing competition is one common mistake many entrepreneurs make. Numerous business plans I have recently reviewed included only a sentence or two about their competition. The reality in this economy is that more than ever, competition within industries is prominent and should be viewed in depth and on a regular basis.
When starting a business in an industry that you’re passionate about, research your competition. Who else has a business similar to yours both inside and outside of your area? It is vital that anyone investing financially in your company understands the competition and market because this is a contributing factor regarding the success rate of start-up businesses.
Take the time to research your competition thoroughly. What do you do differently that can make you stand out in your industry? What does your competition do? Knowing this information in advance means that you can proactively make changes in your marketing. For example, if you are in the restaurant industry it would be helpful to know that your competition down the street is offering half-priced appetizers between 5 and 6 p.m. Utilize this information to bolster your sales by tweaking your marketing.
If you are asking for financing, make sure to include as much research as you can about your competition in your business plan. Address your marketing strategies and ideas. There isn’t a magic bullet when it comes to starting a business but there is something just as valuable – information.
One Common Mistake Entrepreneurs Make
- Written by Beth Holbrook, Director of the Zions Business Resource Center