Many small business owners start out with what they think is a solid competitive advantage, especially if they are the only business of that kind in town. If you are a one-of-a-kind business in town, then it is true, you do have the competitive advantage and you should enjoy it while it lasts because it’s quite possible that it won’t last for long.
There are many ways that you can lose your competitive advantage. It could be that your product or service does not appeal to enough people, or it could be that your product is so good that someone else is going to do the exact same thing.
It’s not too late if you have concerns about your company’s staying power in a market that is seeing increased competition. It helps to be humble to your clients when your first competitor starts to break ground or launches a social media campaign. Be humble and be strategic.
Being strategic means building a true competitive advantage into your business. That means you need to make sure you incorporate the following three strategies when you initially plan your business, or when you are trying to regain your competitive advantage:
1. Incorporate something into your core business that is hard to duplicate and adds a lot of value for your clients. That may sound deceptively simple therefore you must be brutally honest when you analyze the layers of your competitive edge. Incorporating something into your business that is hard to duplicate may require resources that your competition can’t or won’t want to invest, such as a unique asset, i.e., a terrific corner location that no longer exists in your marketplace. Your investment should entail more than uniforms, a special greeting, or even the people.
APPLICATION: I added a second building to my Kids R Kids Learning Academy and called it the Enrichment Center. This was hard to duplicate because it required land and financial resources. It was valuable to my clients because I didn’t have to say ‘no’ if they requested a special schedule due to a change at work or a new baby at home. The Enrichment Center gave us space to run multiple flexible programs. I could now always say ‘yes!’ And ‘yes’ builds loyalty.
There may be ideas for your business that will not use a lot of financial resources and will still be hard for the competition to duplicate. An honest and realistic analysis will ensure that your business maintains the competitive advantage.
2. Incorporate a competitive advantage into your core business that takes a significant amount of time and ingenuity, and will add value for your clients. Invest the time it takes to design a competitive edge into your business that will be difficult for other businesses to replicate. Even if a competitor is determined and disciplined to also invest the time, you will at least be one step ahead of them and your clients will already know that you are looking out for their best interest.
APPLICATION: When my first competitor emerged, I gained an advantage by investing in my teaching staff. I arranged classes where staff members could earn a special early childhood education certification. The classes were offered on-site, after-hours, in a condensed learning environment. It took staff members a lot of planning and was a sacrifice of their personal time, however, it added value to their credentials and was a benefit that our clients didn’t find elsewhere.
The certifications resulted in classrooms that are managed by extremely competent and well-educated staff, leading to happy children and satisfied parents. In addition, staff members were compensated with an increase in salary upon completion of each step in the certification process. Not only did this demonstrate value to the staff members, it also reduced staff turnover in a high-turnover industry, adding another layer of satisfaction for the clients.
3. Incorporate something into your core business that makes you distinctive in your market which sets you apart from your competitors. The key to this strategy is that it does not have to cost a lot of money, but it must differentiate you and be highly valued by your customers. For example, if you are a distributor it could be that you have industry knowledge that your competitor does not have and that your clients value. It could also be that you have a reputation as a good community partner. Social entrepreneurs, business owners who make giving back part of their core business, are very focused on this component.
APPLICATION: I added a bus transportation route to my core business using a bus that I already had after opened a third academy in an outlying community as my clients were moving in that direction. Because it was further removed from the entertainment district, I added an evening route to transport the children, upon request, to the main facility which was located close to dining and shopping. My clients were thrilled. The bus route set me apart because it was a service that clients highly-valued as it saved them commute time and lowered their stress.
By incorporating these three strategies into your business plan or your existing core business, you will bring staying power to your business. After you have done this successfully, the next step is to evaluate your competition and stay at least one step ahead. Then, rinse and repeat.