According to the US Bureau of Labor Statistics, around 20% of startups fail in the first two years. There are numerous reasons why so many new businesses fail, but one is not considering the competition. By gaining a competitive advantage over your business rivals, you have a much better chance of succeeding with your venture. Here are the key things you need to know to get the ball rolling.
Find Your Niche
Too many startups make the mistake of trying to create products or services that everyone will want. But if you use that approach, you could end up not appealing to anybody. One of the best ways to gain a competitive advantage is to find a profitable niche. Having a niche product or service means you can build authority within a specific sector and gain more customers. Begin by knowing who your exact audience is, what problem the members of your audience have, and how you will help solve it. By finding a profitable niche, your startup can immediately create a compelling competitive advantage.
Charge More for Your Product or Service
Another advantage of having a niche product or service is you can charge more for it. But even if you are selling more general items, you could still charge more by selling high-end versions. For example, many people buy a watch to tell the time. But people buy Rolexes not for their time-telling abilities but for their prestige. So, if you are planning to sell watches, you could make much more by selling a few Rolexes than you would by selling thousands of cheap watches. Prestige pricing enables you to boost margins and also increase your brand’s awareness.
Find Your Strengths and Build Upon Them
To really gain an advantage over your competitors, you need to offer products or services that are better. Do not waste time trying to imitate what your competitors are doing. Instead, focus on your own strengths and build upon them. By doing things like improving your selling points, you will spend your time and resources more efficiently and create products or services that make your brand a more popular choice.
Know Your Numbers
Every business revolves around numbers, but too many startups forget that the numbers are the most vital part of their businesses. You need to be completely on top of your costs, sales, pricing, and revenue if you want to stand a chance of beating your competitors. You must know how far your customer reach is and how much you need to spend to achieve your goals if you want your startup to become successful.
Value Your Customers
You could have the best product or service at the best price point in the world, but if you do not put customer service at the top of your priorities, you are very unlikely to gain a competitive advantage. Quite simply, without your customers, you do not have a business. So, it is crucial you value them. You need to be able to solve any customer problems or questions quickly and efficiently. You also need to listen to your customers’ suggestions and ideas. Showing your customers that you care and that you seriously listen to them will help you gain more loyal customers.
Keep an Eye on the Competition
As noted earlier, you should not try to imitate what your competitors are doing. But that does not mean you should not keep an eye on them. Knowing what your rivals are doing can help you plot your next course of action. After all, how will you ever be able to get a competitive advantage if you have no idea what your competitors are up to?