Whether you're a seasoned business owner or just starting up your business, it's essential to know what your competition is up to. Without a thorough understanding of what products and prices are, general customer and employee policies, and what type of advertising and marketing they do - your chances of successfully competing, and profitably holding your own, are slim and none.

Without so much as a hello, my district manager walked in and said, "Get your purse and get organized. We're going out to shop the competition". I turned and rolled my eyes but did as he said. Why in the world would we be "shopping the competition? Why would we even care about them at all, I thought?

While that day happened many years ago, it taught me something still very important today: Though your competition may not be camped out on your doorstep, when they're selling some, or many of the same products and services you are, you can never know enough about them.

Understanding your competitors means:

- Knowing exactly what products or services they sell, quality and pricing

policies. And how they relate to what you are selling or plan to sell.

- The vendors they use, whether for product purchasing or development.

Marketing and advertising strategies; what venues they successfully utilize; how they position themselves. And how they relate to your plans for the same.

- Their target market. Is it the same as yours? If so, how can you create your own niche and make yours different.

- What are their hours and days open? The wise business owner knows it's "a must" to be open at the same times and days as their competition.

- What are their customer service policies? And what can you learn from them that will be help you run a more successful business?

- Their hiring plicies: If you'll be hiring employees, regardless if it's one or one dozen, it's important to discover what the hiring policies, employee work skills required, salary and benefits paid by your competition. In order to find and hire the best employees it's essential to have similar or the same policies, job salary ranges and benefits. Don't and you'll wind up with nothing but "bottom of the barrel" applicants or the castoffs of your competition. Not a good place to be.

- Their strengths and weaknesses. Once you discover their strengths and weaknesses you can develop a successful business which plays off both. As a smaller business, you can develop strengths in areas of their weaknesses; develop similar or different strengths to offset theirs.

- How they compare with your business? Before starting up your business, you must do some research and discover how the competition stacks up against the business you are about to open. If you discover you're both the same, perhaps it would be best to locate elsewhere, or thinking about new directions you can

take, different products or services you can sell. It's never sensible to go head to head with your competition. Especially just starting out. Sit down and reconsider your options and you may discover several other directions in which to take your business.

When you know your competition's target market:

You may discover it's similar in many ways. However, it won't be exactly the same if you've developed your own niche, or are in the process of developing one. And if you've done your research, and visited your competition before starting up your business, you'll know exactly what products and services they sell, and at what prices.

Visiting them you'll not only see what customer's are buying, you're better able to decide what products you don't want, or what products are so popular you'll want a similar version. While it's important to develop a niche, to be competitive, there's nothing wrong with carrying a handful of similar products or services. This helps you stay competitive, but doesn't pit you head to head, fighting for the same market. Which is sure financial suicide.

If you think about, you'll remember many popular department stores often reside in the same shopping malls. Often selling many similar types of products and services. But each knows just what the other sells, because they frequently shop the competition's stores. As my boss and I did those many years ago; and which I still do today. Because all smart businesses "shop" each other, they're each able to buy what's popular and what's selling; simply different versions. In short, each has their own niche. And these similar items help rather than hinder business.

In the international bestseller "Blue Ocean Strategy", by W. Chan Kim and Renee Mauborgne, they say "Don't compete with rivals -- make them irrelevant".

Knowing your competition, helps you better price your products:

Here's something I bet you didn't know: Inadequate, or uncompetitive, pricing is one of the top reasons small business fail. Sound crazy? Well it's true according to the U.S. Small Business Administration.

You won't have a chance if you consistently try competing with big box stores, or other larger established businesses, using price alone. Big box stores are buying huge quantities at very low wholesale prices. And in may cases, because of the extreme quantities they buy of each item, a big-box retailer or large established one can actually tell the wholesaler what price they'll pay.

Generally, wholesale prices depend upon quantity - how much you buy. When you're just starting out, until you establish customer buying patterns, you'll be buying smaller quantities. And while you'll also be capable of buying at wholesale prices, generally your price won't be low enough to make you competitive for those products. While every now and then you'll buy what's called a "loss leader", something you'll actually lose money on, but which brings in customers who'll buy much more, it's best not to purchase more than a handful of those products, unless you're having an open house or special sale or other specific reason.

A word of caution: Don't get caught up in a war of prices with businesses you can ill-afford to compete with. In order to create a successful and profitable niche, and increase the flow of new and repeat customers, you must clearly be different. In some cases, if your customer base will support it, you're better off purchasing more expensive products, providing more exclusive services with much higher price tags. Moving your business to another level, up and beyond, your competition. Remember, if you are competing solely on price, you aren't building a base of loyal customers. Instead, you're on a slippery downhill slope to failure. Customers, who purchase with price only in mind, will move on quicker than you can snap your fingers, to another company who meets their price needs.

Comparing Service Oriented Businesses:

When comparing your business to a competitor, consider the following:

- Do clients come to their place of business, or do they visit the client?

- If visiting the client, how often? Is the price higher?

- How long does it take to perform the service?

- What exactly does the service include?

- Is the customer required to pay for any products used on each visit? What are they? What's the customer cost? How good are the products?

- If you were able to chat with any of their clients, how do they rate the service?

- What additional services and/or products are they offering clients?

- What equipment, if any, is used? In what condition is it? Is it new, well-used, or state-of-the- art, for example?

Once you have answers to these questions, you can easily decide which products and services you'll want to provide. Or to provide the same services but specialize on only very specific ones. With this info, you'll also decide whether you'll need to purchase new, used, or more state-of-the-art equipment.

Plus, if you're familiar with their location, you'll have a better idea where to locate yours. And how to organize and/or decorate, or set equipment, in your location to best serve clients.

When shopping the competition be sure to check out:

Hours -- When do they open and close? Every hour a competitor is open is another hour they have to lure your customers awry. It's in your best interest to open and close at the same time.

Where do they advertise - Knowing where the competition advertises can tell you a lot about their business - what their target market is, items and prices they regularly promote; how often they host a sale or function. Even how they position themselves in the marketplace.

Are they advertising higher price points to people visiting their website, or lower prices to the general public via newspapers? Are they so successful they're capable of spending thousands on large mailings, for instance?

How often they're doing advertising will also affect you. If they're consistently advertising specific products or services like yours, if you do none, or little, advertising they'll eventually corner the market on those specific items. This could force you to discontinue them. Or even close your doors.

Gathering this information will also help you decide where to run your own advertising. If the competition consistently runs ads in the same places, a good guess is those venues are successful, bringing them customers regularly. Also, if you know when they running those ads, and advertise too, you're likely to wind up with some of their customers. On the other hand, while you'll occasionally want to host a sale when they do, you'll be more successful hosting your functions on different dates.

Last word...

Knowing your competition's strengths and weaknesses will help you plan, strategize and successfully compete. Plus you're better able to make your own determination about how you want your business to be positioned in the marketplace, rather than risk being forced into a less successful position by the competition. So make it part of your regular goals to "shop the competition". And to shop them often.

Jean L. Serio, Copyright 2007. Are you one of the 1.2 million women tired of working the 9-5 grind, sick of worrying about making ends meet? As you know starting your own business still remains one of the best strategies for providing you financial freedom. Discover how to start up your own business today with your own step-by-step Action Plan. Plus to ensure you receive all the details FREE, and learn how you can ahrness the power and resources you need to start, first, sign up for your free Newsletter "Start Up a Business Today" and your Bonus Report "5 Mistakes Women Make Starting Up a Biz". Go to www.womensmarketingandbusinessnetwork.com "We help you make it happen!"

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