What is your company’s competitive advantage?
In my work I have often been approached with these questions; “Do you think this is a good idea” and “should I go into business?” I usually asked them to further describe their business idea for me. They begin by speaking calmly and at an average pace, then, as they begin to get excited, their voice tone starts to rise, the pace of their speech increases and they often become animated. This is a great sign since it shows they have a true passion for what they are describing. Passion for what you’re doing is one of the critical ingredients for success as a small business owner.
Next, I ask them to describe their competitive advantage. If they respond with, “What’s that?” I tell them not to quit their day job; end of discussion. Having and identifying a competitive advantage is so important that if a business owner cannot describe their competitive advantage then I believe they are destined for failure.
As the owner of your business, you must identify or develop your company’s competitive advantage. Once you’ve done that, you have to teach your key management and employees how you plan to use your competitive advantage to outsell the competition and increase your company’s market share. In order to identify your competitive advantage, you should compare the advantages and disadvantages of your business against two or more competitors. Pay particular attention in the major areas of; price, location, image, products/services, customer service, and quality.
Here is an example of a competitive advantage; each morning I stop at a local drive-thru coffee shop where the coffee tastes good, is affordable, and the access into and out of the drive-thru is easy to maneuver. I do this often enough that I would consider this MY coffee shop and an important part of my morning routine. Now, let’s say you open a drive-thru coffee shop directly across the street from MY coffee shop. How are you going to get me to stop buying coffee at MY drive-thru and instead spend my coffee allowance at YOUR drive-thru? If you are successful, whatever the reason, that reason is your competitive advantage. Identify it and communicate it to all who will listen.