One of the most exciting aspects of studying your competition is that you can prove your concept before spending money or time investing in starting the business. This one thing alone makes all the competitor research worthwhile. After all, you have limited time, limited resources, and you’re just one person – you might as well prove the idea is doable before taking the plunge.
To get started, you’ll want to:
- Identify Your Top 3 Competitors – Figure out the top three people or businesses you’ll be competing with as you start and run your business. An excellent way to start is by looking for the product or service you want to sell generically. For example, if you're going to create a website that helps with meal planning for autoimmune patients, you’ll look for autoimmune meal plans to locate who is doing it already.
- Identify Your Target Audience – Through finding the competition, you can then use their platforms to get to know your target audience. This can be very helpful for you to create a client avatar that really describes your ideal customer.
- Figure Out Your Differences – As you look at the top three competitors, how are they different from each other, and how will you be different from all three of them? What will make your offers stand out against theirs? In what way will the results your ideal customer gets from the product or service be different?
- Gather Important Information About Both – Once you locate your competition and your ideal customer, collect the information in an organized way. Use a spreadsheet and collect the same information from each of the three top competitors, including offers, price point, audience, processes, systems, and so forth.
- Conduct a SWOT Analysis of Your Competition – For each competitor, perform a SWOT analysis. This will also help you also do the same for your own business periodically to ensure that you’re staying ahead of the curve.
- Determine Your Start-Up Costs – You can identify the technology you need and more to help you set a budget for your start-up costs. Remember, you don’t have to use the same software they use, and that you’re mostly concerned with what the software does so you can find options that you can afford but that work for your needs.
- Determine the Earning Potential – The cool thing about studying your competition is that you can generally find the information needed to figure out your earning potential. When you figure out how many customers are available and what you will charge, and how you’ll attract them, you’ll figure out if your earning potential matches up with your needs.
As you can see, doing a full study of your competition is going to help you prove your business idea is feasible and profitable, as well as help you get started marketing to and adding value to your audience on a level that just can’t be done without research.
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