If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle. Sun Tzu
It doesn’t matter what industry your business trades in, you’ll always have competitors. Some will be better than you, others won’t. The important thing to remember is knowing how to engage with them for your mutual benefit.
Understand your competitors strengths and weaknesses
Once you’ve established who your main competitors are (on a like for like basis) it’s important to understand their strengths and weaknesses. This is key for several reasons:
Firstly, when competing for work, you are likely to be asked by your client who your competitors are and why they should choose ‘you’ above ‘them’. If you don’t know your competitors you’ll fall at the first hurdle and demonstrate that you don’t understand your own market. Make sure you don’t find yourself in this position by being able to respond more positively, such as “Well, Joe Bloggs have a strong presence in the market but you’ll find us more closely matched to this particular project …”
Another key advantage of engaging positively is to understand each other’s strengths and weaknesses. Let’s take a law firm, for example. At first sight they might both appear to compete with each another (perhaps even in the same building), chances are they’ll both specialise in something entirely different. So if Firm A operates as a PI claims company and Firm B operates as conveyancer then there’s certainly ground to work together – even to the extent of referring work and thus meeting specific client requirements.
Sharing information is key
The same concept can also be applied with regards sharing information. Let’s take the law firm again. If, for example, new legislation is on the horizon it might be advisable (whether directly competing or not) for each Firm to discuss any impact it might have and how best to roll it into day-to-day operations. Firm A might have a great idea whereas Firm B might be at a loss. There’s certainly something to be said for transparency and engaging fair competition.
Above all else, remember that your business is unique to you so don’t try and make it something it’s not. There will always be competitors better than you, but rest assured there will always be others much worse.
More articles like this:
The Guardian has a good article for Startups on knowing the competition. Click here to read.
The Entrepreneur: Know your Competition. Click here to read.