Competition Research For Your Small Business - Finding Your Unique Angle

Part of developing a strong business plan, whether for an existing business or a start-up, involves extensive competition research for your small business. By knowing what the competition is doing right and what they are doing wrong, you can better determine your own unique selling proposition. Your USP positions your business in the market and offers customers a reason to choose you over your competitors. Areas to research include product or service offerings, marketing activities, and target market. Perhaps the competition is missing opportunities for new products or services, or does not serve a particular market. Knowing this can help you fill the gap for customers.

Effective competition research for your small business should include SWOT principles. SWOT is an acronym for strengths, weaknesses, opportunities, and threats. By using these principles both in evaluating your own business, as well as your competition's operations, issues and opportunities come to light that you may have otherwise missed. The concept can be applied using the most simple or the most complex system. A simple notepad listing traits for each competitor may suffice for initial research. For more complex research or industries, a more in-depth system using computer database software might be needed.

Whatever system you use to track research it should work with your normal work style and record keeping. If you are more comfortable tracking your research on the computer, then devise a system accordingly. If you are more comfortable with more simple methods such as paper lists and gathering marketing collateral or other printed material on your competitors, then devise a file or folder system that works for hard copy tracking. Regardless of the method, be prepared to amass a great deal of information when performing competition research for your small business.

Keep in mind, your research should involve both first and second party information. In other words, find information about your competitors that comes directly from them. This could be flyers, their website, or brochures. The competitor generates first party information directly. Second party information will come from sources other than your competition. The majority of competition research for your small business will be in the form of second party information. This might include information from the local Chamber of Commerce, feedback from customers of your competitors, vendors, word of mouth, or reviews in local papers and trade publications. It is advisable that you consider the source before relying heavily on the information from secondary sources.

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