Tag Archives: business plan

Choose your competition wisely

Every business has ideas about who the competition is, but how much thought has gone into identifying those competitors? And was it just guess work, or analysis of solid facts?

The truth is that choosing who you see as your competition has a really powerful effect on business strategy.

Obviously every business is unique and so there’s no easy tool for identifying the right competitors, but one of the things I do when I work with businesses is to ask them lots of questions. So I would like to share some of them here:

Currently who are your competitors? What is it that makes them competition?
The power of knowing your competition is understanding what they have that you would like to have. Greater market share? Greater recognition? More profit?


Who do these businesses see as their competition? And how do they see your offering?

Is that from your customers’ perspective or from your own?
What’s important to you, probably on the same list as before – market share/ recognition/ profit – is not necessarily what your customer sees as the main difference. They will value quality and service as well as price and it is important to understand whether they see price differences as a key decision maker.

Being clear about what is important to your target customers lets you see which comparisons are valuable in your decision making and what is purely distraction.

Are competitors a distraction? Can customers replace your product/ service with a substitute instead?
It’s not usually as simple as identifying a business in exactly the same location or market and even where there are competitors in the same market the “competition” from substitutes (customers replacing your product with something completely different) can be just as interesting.

Let’s take McDonalds as an example. They list their UK competition as:

  • Other fast food chains, obviously
  • Coffee shops
  • Traditional fish and chip outlets
  • So they are not just interested in the names that we immediately think of, but also other places that get in the way of potential customers choosing McDonalds. What stops your target customer buying from you?

    “Measure yourself by the people who measure themselves by you”
    Carter Chambers, The Bucket List (2007)

    Is your view based on current facts or marketing fluff?
    We are all guilty of this. The media (traditional and digital) is full of fabulous headlines about business successes in every sector and the huge sums of money raised in share sales. No-one ever released a press release that said “we made mistakes and lost a crucial customer so our plans have gone awry”!

    Recently I read an article in the business press which heaped praise on a growing SME for achieving 11% year on year sales growth. It was only at the end of the article about wonderful ongoing investment and new opportunities the author quietly mentioned the pretty sizeable losses that the business was still making, drawing me to the conclusion that sales growth was requiring big sacrifices from the owners.

    What does the future hold? Who are the rising stars in your market place?
    We can only ever be certain about the past, but what really matters is the future!

    A little more than just 10 years ago the big supermarkets were competing with each other to try to capture market share but then their battles were swept aside by the growth of the likes of Lidl and Aldi.

    How do you see your market changing in the future and how can you adapt? (Chances are you’ll be wrong here, but if you plan for something you will be better placed to react to whatever comes your way.)

    Most importantly: what are you going to do with this information?
    Can you see opportunities that you can exploit? Have you got strengths that the competition haven’t got? Maybe what you need to focus on is doing more of what you do best?

    At the end of the day what matters is how you’re doing now compared with how you did last time (last year, last marketing campaign, last product launch, etc) but by having good information you can make good decisions for the future.

    If I can help you work through some of these questions I am running free consultancy sessions across Devon over the next few months. Click here for more details.

    Fail to plan? Plan to fail.

    The Food For Thought workshop in Barnstaple last month generated active and enthusiastic discussion of the topics covered in the presentations.

    As a follow up I want to share some of the major points that were covered.

    We kicked off the morning looking at business plans. Most of the businesses present didn’t have a business plan, and that wasn’t a huge surprise – business plans usually only come out when you want to borrow money or apply for a grant.

    However when you do have a written down plan you are much more likely to achieve what you want from your business:

    – You have a way to evaluate new opportunities; do they get you closer to your goal?
    – You keep your own interests at heart rather than getting swept along by other people’s ideas.
    – When times get tough you have a reminder of why you started on this journey, and encouragement to see it through.

    A business plan doesn’t need to be formal, and it doesn’t have to be lengthy (the shorter the better!).

    It’s also not supposed to be final – change it as you go, as you get more information and as your circumstances and views change. Both the businesses who said they did have a business plan updated their plans regularly.

    So where do you start? In simple terms a business plan sets out:

    Where you are now

    Often a SWOT analysis is a good place to start. It’s a useful tool to separate out the good and bad things currently on your radar between:

    Strengths and Weaknesses – internal factors; things you do well (better than your competitors?) or not, things that you have some control over.

    Opportunities and Threats – external factors, like the economy and market trends. These are outside your control so any strategies you make need to be designed to take them into account.

    Sometimes it’s easy to lose track of the distinction, but it is important as there is nothing more futile than trying to change something you have no control over.

    Where you want to get to

    It’s not your business who’s writing this, it’s you. Your goals need to come first, so what does success look like to you?

    What makes a successful seasonal business?
    Provide you with an income – well usually, but also:
    Build a (inter-) national reputation?
    Make you rich?
    Follow a dream?
    Make a tax loss?!
    Close down in a controlled way?

    How are you going to get there?

    What does your business need to achieve in order to get you to the point where you can achieve your own goals?
    More profit?
    More sales?
    More staff, to free up your time?

    How long do you think it will realistically take to achieve this? Or, more importantly, how long have you got!

    This is where your strategies come in. If you need more profit how will you get it? More sales? Better sales? New customers? New products!

    How will you get these new sales? How will the customers find out?

    Do you need different resources to deliver this? New tools? More cash? A better IT system?

    Be realistic

    I have worked with a lot of businesses whose plans have failed because the owner thought that they could grow sales without adding extra staff or production resources. Hope, or even will power won’t ever be enough to make the plan succeed!

    You have to stay realistic when it comes to working out what you can do with your existing resources, and similarly when it comes to assessing the sales opportunity that you have. I mentioned the example of milk alternatives – while there is a market for these products there is a large proportion of the population who are happy drinking standard milk and so the market is naturally limited. A huge marketing budget will not necessarily change that, so growth plans have to reflect this.

    Make a plan
    At the end of the workshop the attendees took away a business plan template that they had completed during the morning. If you would like a copy of the template then drop me a line, or leave comment here.