Do Your Homework

January 21st, 2010 by admin

Think for a moment about your business idea— product, services, market, scope. Now create a list of all the competitors that occupy the same space. Did you write any names down? If so, you are further along than many first-time entrepreneurs. Lots of novice entrepreneurs don’t recognize the value of this type of list. They don’t understand the power that comes from knowing about who’s out there for them to go head-to-head with.

Make a concerted effort to create your list. Search online. Go to the mall. Attend conferences or seminars dealing with your market space. Pay attention to advertising you see throughout the day—commercials, newspaper and magazine ads, billboards, anything.

List in hand, it’s time to get to know the guys across the street. What are they doing right? What are they doing wrong? Who are they selling to? Who is their biggest customer? What is their best-selling product? This may require a little espionage. Go stand in line at one of their stores. Eat their food! Call the companies and engage their administrative assistant in an informational conversation. Tell them that you’re doing research and ask about the company’s goals, mottos, and customers. You will be amazed at what you can find out by asking the right questions to the right people.

Open up a line of communication with the owners of the company. Take them out to lunch and have an honest conversation. Make sure you approach this from the right angle, though. For instance, you could say, “I admire you company’s history. I’m interested in a similar industry, and as someone just starting, I wanted to know if I could ask you a few questions.” This comes across much better than, “Tell me what you guys do, because I plan to leave you in the dust in six months’ time.” Be polite and ask honest questions. You’ll get answers.

Just because you know this information about your competitors, you do not necessarily need to model their businesses’ look, feel, and function. If you see weaknesses, for example, you certainly don’t want to let them slide into your company. Don’t just look for holes, though; there may be a thing or two you find valuable and decide to borrow. We’ll go back to Schoolhouse Rock! and affirm that, indeed, “knowledge is power!” Specifically, it is the power to emulate the good, improve the bad, and sail past your competitor on the dance floor.

Porter’s Points – Do Your Homework

  • In the planning stage, list all aspects of your business that might run up against competition. Starting with Internet searches and moving into actual legwork (malls, phone books, industry directories, etc.), make a list of all your competitors.
  • Draft a series of questions and talking points to use when approaching your competitors’ administrative assistant, managers, and owners. Don’t put them in the awkward position of disclosing proprietary information, but focus instead on their product ideas, customer relationships, advertising techniques, and other useful information.
  • Always be courteous when courting your competitors. Don’t push if they refuse some answers. If it really is important, you can find out some other way.

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