Competition from business to business is the soul of capitalism??”it??™s what makes money and creates a market. One of the most important approaches to business, both in terms of writing a startup business plan and continuing to follow up on your plan for years after the grand opening will be to address your competitors. The amateur, or the old standby that dies with his antiquated business model, may not aggressively campaign against their competitors.
The reason for this lack of aggression could be due to a number of factors. Management may lack imagination, may lack a competitive streak or may even have a general dislike for the business they are in. However, the most successful businesses (especially the ones that grow from a small startup company into a franchise) are always the companies that thrive on competition.
The greatest challenge, of course, will not be in creating a mudslinging advertisement or in badmouthing your competitors to your customers. (And actually, those practices are primitive forms of competitive marketing) Rather, it will be learning your opponents; learning the market they have captured, learning what they do to sustain customer interest and coming up with a new strategy that will top their efforts.
How can you do this? You may take the direct approach by simply walking over to your competitor??™s property and analyzing the layout and direction of their store. (Or for online competitors, visit their website) Take the mindset of a customer and decide what it is about their company you like or dislike. Now work those ideas into your marketing and advertising.
Banks will expect you to analyze anywhere from 3-6 nearby competitors in your business plan before they have confidence in your marketing abilities. Even after you get started and gain a measurable market share, you will still have to keep a lookout for new and existing competitors if you hope to stay in business for the long term.
Just consider the scenario that you and your competitors have been cast away to an abandoned island, and must each market your services to the local natives. Taking this ???from scratch??? attitude may help you approach your competitors from a more analytical point of view.