Your business idea is brilliant. Nobody else is doing it. You’ve got no competition. It’s sure to be a gold mine, right?
One mistake many new businesses make is thinking that just because nobody else is doing exactly what they’re doing, their business is a sure thing.
Is there a good reason why no one else is doing it?
The smart thing to do is ask yourself, “Why isn’t anyone else doing it?”
It’s possible that nobody’s selling cod-liver frozen yogurt in your area because there’s simply no market for it. Ask around, talk to people, do your market research. If you determine that you’ve got customers out there, you’re in good shape.
But that still doesn’t mean there’s no competition.
How are customers getting their needs met?
There may not be another cod-liver frozen yogurt shop within 500 miles. But maybe an online distributor sells cod-liver oil to do-it-yourselfers who make their own fro-yo at home. Or maybe your potential customers are eating frozen salmon pops right now.
It doesn’t have to be an exact match to be a competitor
Don’t think of competition as only other businesses who do exactly what you do. Think about what currently exists on the market that your product would displace.
It’s the difference between direct competition and indirect competition. When Henry Ford started successfully mass-producing automobiles in the U.S., he didn’t have other automakers to compete with. His competition was horse-and-buggy makers, bicycles, and railroads.
Competition can be a good thing
Having competition can actually be a good thing for your business.
For starters, it’s an easy validator—it’s more likely that there are people who might be convinced to pay for your product or service if there are already people buying from your competitor.
Writing the competition section of your business plan
If you’re thinking about competition because you’re writing a business plan, use this guide to help. One of the best things you can do is use a competitive matrix as a tool to make it easy to see how your product or service compares to your competition.
Sometimes you have to think outside of the box when planning your business. Chances are, if you’ve got a product or service that appears to have no competition, you’ve already got a talent for thinking differently. Be sure to put that talent to use.
By Noah Parsons