When you first start a new business, you may understandably be focused internally. There is much to keep you occupied within—how many people to hire, how much to pay employees, how much product to produce, where to find the best suppliers, how to generate additional revenue. The needs of your business may be endless. However, it is also important to keep an eye on your competition.
Why should you keep an eye on the competition?
Avoid Producing Duplicate Products
Of course, you want to stay current with trends in your market, but you also want to avoid producing the same product as the competition or having the competition provide a better product than you. You want to watch what other companies are doing, not to copy them, but to watch trends and know your market. There are a variety of ways to do this, including using sites that give you company information such as financial records and stock information.
Learn from Your Competitor’s Mistakes
In addition, keeping an eye on the competition is also important because you can see what is working for that company. Many businesses try different products and ideas, and many of those are failures. If a competitor’s company is more established than yours, chances are they have already suffered through several failures. You can learn from them, and hopefully have fewer failures and more successes yourself.
Form a Beneficial Relationship with Your Competitor
However, learning about competing companies can serve another purpose. You may want to become friendly with the competition. While this sounds contrary to what you may believe, becoming friendly with the competition can offer ways for you to both grow and flourish. For instance, in one mid-size town, there are two hospitals. One hospital, Hospital A, excels in heart care. Rather than the second hospital, Hospital B, trying to compete with the first one by offering heart care, they instead chose to focus on neonatal care. Now, if someone with a heart condition comes to Hospital B, they are often referred to Hospital A and vice versa with neonatal care. They have an understanding, which helps each of them grow.
If you can recognize what your competitor’s strengths are through their financial records, you can avoid directly competing with them and can instead offer a different layer of service or a different product. Then, by reaching out to the other company, you can complement one another’s products rather than compete, which will ultimately help both of your businesses grow.
While you may feel devoting your time to internal concerns is important to your business, that shouldn’t be your only focus. You will also want to learn about the competition to learn what products they successfully produce, to perhaps enter a “friendship” with them, and to learn from their mistakes.
Post by Melissa