Do you ever feel like there’s a competitor around every corner? Budding entrepreneurs often hesitate to follow their business dreams because they believe their target market is already so saturated that there simply is no more room to absorb any new entrants.
However, savvy small business owners can make it in a crowded field, even one filled with a couple of big players. The key to your business' success doesn’t hinge on finding a completely empty field, but how you define your company and its place in the market.
Here are four easy ways to set yourself apart and beat the competition in your industry.
1. Identify a void in your industry–and fill it
Many first-time entrepreneurs make the mistake of thinking they need to blaze a new trail to be successful. Of course, the market always needs innovators, but a business doesn’t necessarily have to be revolutionary in order to succeed.
Rather than struggling to come up with a brand new idea, take a look at your target industry and see where there’s a void to be filled. Then, figure out the best possible way to service that need and run with it. Starbucks wasn’t the first company to sell coffee, but they did REINVENT the coffee shop by selling an experience along with a caffeine fix.
These days there may be more than 17,000 Starbucks all over the world, but other coffeehouses around the country are finding a niche. From Smokey Row in Des Moines, Iowa, to Rock City Café in Rockland, Maine, local coffee shops are succeeding by promising more than a cup of coffee and a place to sit. They’re tapping into some of the most primal elements–community, connectedness, security and comfort.
Your product and service may be similar in many aspects to that of the competition except for a few defining factors. Those are the key to everything. You should be great at all the basics, and then put your energy and focus on being exceptional at what makes you different.
2. Create a customer-centric culture
When trainer Chris Stevenson wanted to open a fitness center in Southern California, many questioned the decision. Here he was, in the heart of the recession, starting a business in an area that was already saturated with multiple boutique gyms and two chain fitness centers competing for the same customers from the same nearby neighborhoods.
Yet despite competing with huge chains with deep pockets and big advertising budgets, Stevenson Fitness is hugely successful today. Why? Chris focused on creating a one-of-a-kind culture at his company that expands upon people’s expectations of what a fitness center can be. There’s no intimidation or pretentiousness at Stevenson Fitness. Yes, it offers top-caliber facilities and a great range of classes, but what sets Stevenson Fitness apart is the friendly, approachable personality of the entire staff. The tagline "Your community, your gym" says it all. His company continues to grow because customers love what Chris’s company gives them.
No matter how big your business gets and how much staff you bring on, I always advise business owners and top management to stay as close to their customers as possible. Talking to customers one-on-one is the best way to truly take the pulse of the market and to understand customer needs and how your company is doing.
3. Don’t compete on price
Eager to attract customers, many small businesses feel the only way they can compete in their industry is to undercut the competition on price. I have to admit that my husband and I fell into this same trap with our company–we dropped our prices to unsustainable levels. Our business grew, customers were happy, more customers came in, yet we were nearly losing money with every new order.
This happens to many small businesses in crowded markets. They find themselves running as fast as they can, yet they are still barely bringing in enough money to keep their operations afloat. Faced with this situation, what did we do? We repositioned from competing on price to competing on service.
In a saturated market, someone will always be able (or willing) to absorb a lower cost than you. You’ll need to find a new way to stand out; for us, this was by offering personal service. We began providing free business consultations to everyone who wanted one. We increased our customer service. We also increased our prices to support the higher service levels, and we saw sales and repeat business rise. The key was defining who we were and what made us different, and then focusing on being as exceptional as possible in those differentiating areas.
4. Remember that saturation can mean strength
A competitive and crowded industry indicates that customer demand exists, and that the market is viable. If you carve your own niche, there will be room for your business.
If you’re considering starting a business, don’t be disheartened if a lot of other companies are already offering a similar kind of product or service. You should still look before you leap and do your research on how you can stand out, but don’t let the idea of a saturated market stand in your way. You can beat the competition.
Do you have any tips for making it in a crowded market? Let us know in the comments.