How should I deal with business competition

How we should deal with competition

How we deal with the competition determines the long-term success of our company and how much we shape our company according to our own ideas and wishes.

Do you know that? You have a great idea in the shower, going for a walk with your dog, or like me while running. You don't think about anything else, are totally euphoric and are already imagining your success, if you are sitting at your computer and can finally search for your idea on Google: and then ** Fu ..? $ &! ** - it hits you like a lightning bolt. You will find a lot of the same or similar ideas that have already been implemented by others.

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My negative experience with competition

I too have had painful experiences with competition. And for many more entrepreneurs, competition is frightening and daunting. They then do not even start their previously selected idea or find their existing product to be worse and give up.
Competition can endanger and even destroy your own company. I experienced that myself with one of my own startups, with whom we started in the average flower subscription market. As a small bootstrapping startup, we competed against well-financed startups and unfortunately had to give up in the end because our financial reserves were exhausted and we were no longer able to convince an investor due to the competition.

And yet it makes a lot of sense not to see competition as an enemy but to perceive it positively.

For many sidepreneurs, the question arises: how should I deal with competition? Do I see competition as my enemy? Should I befriend them or even cooperate with them?

Mistakes that sidepreneurs make again and again

  • Too much time and energy are invested in observing the competition

The more time we invest in observing the competition and looking at the actions of competitors, the less time we have to work on our own businesses.

  • You just react instead of acting

If you concentrate too much on the competition instead of on your own customers, you are always one step behind and only react to what the competitor is doing instead of acting proactively and breaking new ground with your own customers.

  • You enter into a price war with the competition

The worst argument for your own product to differentiate it from the competition is the price. If you get into a price war with the competition, there will always be a company that is even cheaper and that will undercut us in price. Either because it has better financial reserves or because it may not have to earn any money with this product but only use it as “customer bait”. Price wars can be life threatening for your company.

Why you should still view the competition positively

Competition in a market is a first sign that that market has some entrepreneurial potential.
If there are already other companies in the selected market that you would like to enter, don't let that deter you, but rather let it encourage you. The competition clearly shows you that other companies can already earn money with similar solutions in this market.
Due to globalization and digitization, the markets are now large enough for a large number of providers. Your success factor in a German market will be differentiation.
You can learn from past mistakes of the competition for your own company
Nowadays you have every opportunity to understand the development of companies and so you can learn from the mistakes your competition has experienced in the past without having to cause them yourself.
Competition can be used for cooperation
Cooperation with a competitor is particularly useful if the target group of both partners is similar or the same, but you cannot cover a specific aspect of customer needs yourself. In this case, you can present your customer with a solution to their problem and further increase their trust in you, but without having your own product as a solution. You may then be able to earn financially from it through agency commissions.
In addition, collaborations are useful and helpful if you want to develop a market that does not yet exist. In this case, additional market participants help to promote general awareness of the solution and the new market to be created and to draw the attention of as many people as possible.

How you can see the competition positively

The most important prerequisite for being able to see competition positively has to happen in your head: you have to internalize the positive characteristics of competition and focus on differentiating and differentiating your company from other market participants. So watch out for them Unique selling points or USP (Unique Selling Proposition) called to set you apart and stand out. As we have just seen with the common mistakes, price shouldn't be the main differentiator.
In the article “Create your business plan in under 1h” you can download a free template for a business plan in which the USPs also play an important role.
Go to: www.sidepreneur.de/F possibly5

4 tips how you can implement sustainable differentiation and distinction

  • Build a business around a passion

If you love what you do, then you will have fun doing it and be authentic to your customers. Customers appreciate this very much and will prefer your company to others. You will also come up with creative solutions for upcoming challenges if it is one of your passions that you like to deal with on a daily basis. It will be easier for you to show staying power and perseverance.

  • Create a brand, not just a product

Think bigger and longer-term by creating a brand that stands for certain principles and content. Then create your products under this roof that correspond to the brand philosophy and guarantee you a more special position in the market. You retain customers by convincing them of these principles and allowing them to experience brand recognition in your products. The goal is to build brand loyalty that sets you apart from the competition.

  • Bring your personality into this brand

Fill your brand with life and let your personality flow into it. It is the most unique thing you have to offer and what can represent a non-reproducible USP. The more your personality is built into a brand, the more authentic it appears and the more difficult it becomes for the competition to copy you or to force you out of the market.

  • Do things differently than the competition does

Don't become reactive by stubbornly following the stream downstream. Better act! Get active, concentrate on your target group and your potential customers - and then swim against the current. Be different and act differently than the competition does. In this way you build characteristics that customers will always associate with your brand and you increase the attention. Brands that are different are more permanently imprinted on the thoughts of potential customers.

If you avoid the mistakes mentioned above and above all your great focus on the differentiation and development of Unique Selling Points then you will enjoy a competitive market, as this market has potential and the other competitors are also constantly drawing new people's attention to the market. Competition can destroy companies - but only if we blindly follow our competitors and just copy them instead of being innovative and different. If we manage to stand out from the rest, we will be able to inspire our target group with our company in the long term.

To download the free template for your business plan, which also deals with unique selling propositions, simply click on this link.

 

Michael Jackdaws

I love to create digital products that people enjoy and, in the best case, solve one of their problems. That's why I work full-time as a product manager and as a sidepreneur on my own projects such as the sidepreneur platform here, on a tool in visual branding for brands and companies, and as a "virtual product manager" for small and medium-sized companies. I also love to experiment online and present you new projects soon! You can find more information here: About Sidepreneur

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3 comments
  1. Cool article, Michael! Even if your competition sometimes disputes you with orders, you shouldn't be afraid of them. On the contrary. You just have to change your perspective to see that a world without competition would be even more to be feared: http://www.startworks.de/fuerchte-keine-konbewerb/
    Best regards,
    Matthias

  2. 2. One only reacts instead of acting

    >> You often stay here “unnecessarily” ... it is better to rely on your own innovative strength and create products that inspire people.

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