When Competition Strikes ... Strike Back!
To explain Casey Anderson's healthy attitude about competition, this teen entrepreneur has developed a healthy analogy. "Having competition in business is like lifting weights," explains the 17-year-old owner of Cornbread's Salsa in Crockett, Texas. "If you only lift a small amount, that's all you'll ever be able to lift, but if you keep lifting more and more, you'll get stronger."
Many businesses, even those run by adults, see competition as the biggest threat to their success, but Anderson relishes it (pardon the pun). He says, "Competition makes you work harder to have a better product."
One of the reasons Anderson's so confident is because, when he first started his company, he conducted his own market research- let potential customers taste his product while it was still in the developmental stages. "[After tasting it,] people would say it needs more of this or less of that, and I finally got it just right," he says.
Market research-previewing your products for potential customers and then asking their opinions-is helpful in any business and can bolster your confidence. So how do you conduct your own market survey?
If you're planning to sell a product, have a sample you can show to a group of people. If you're planning to start a service business, develop a short presentation outlining how your business will work.
Next, create a document containing a list of questions you want survey participants to answer. Remember to leave enough room so participants can adequately answer each question. Some questions you might want to include in your survey are:
- Do you like my business idea? Why or why not?
- Would you be willing to buy my product? Why or why not?
- What price would you pay for my product or service?
- How does my product or service compare to the competition's?
- What can I do to improve my product or service?
Now comes the hard part: Giving your presentation and waiting for the survey results. If you're especially nervous (and who isn't when it comes to public speaking?), practice your presentation before family and friends. If you've researched your business well, chances are, the feedback will be good.
After Casey got great feedback from his research, he was so confident in the superior quality of his salsa that he wasn't afraid to charge a bit more than his competition.
Contrary to popular belief, running a small business can actually help young business owners gain an edge over the competition. How? In Anderson's case, most of his customers are family and friends, who would much rather buy from someone they know and trust than take their chances buying an unknown salsa off the store shelf.
But what if your competition doesn't come from the big name, national brands that can buy in bulk and package their own products? What if your stiffest competition is another small business in a nearby town?
That's the situation Anderson found himself in when he discovered that New Canaan Farms also manufactured salsa in nearby Fredericksburg, Texas. "They're my biggest competitor in the local stores," he says. Never fear, though-Anderson has a plan to combat that competition by increasing the number of stores carrying his product in the 300-mile radius around his home. More name recognition, he says, means more sales.
Teen business owners often encounter many difficulties running their businesses, especially in the face of competition, but if you're smart, you'll adopt an attitude that's as positive as Casey's: "Sometimes you have to sacrifice to get started," he explains, "but you also have to plan to keep growing."
Amy Fennell Christian, a writer living in Augusta, Georgia, is a freelance editor for YoungBiz.com.