Every single business out there ought to have some sort of "unfair" advantage. What makes your business thrive? What makes your customers smile and recommend you? How exactly are you edging out the competition? However, too often, owners lose focus on what makes their business special or new owners never really develop one in the first place. Here are my tips for Establishing or Getting Back your Business's Unfair Advantage. As always, if you have a question or think you might want to work together, please get in touch through my Home Page. Also, never miss a blog by following me on LinkedIn or Facebook.
So....What's an Unfair Business Advantage?
To put it plainly and technically, an unfair business advantage is something that is unique to you, something that is done especially well by you, or something that cannot be copied easily. While it's easy to associate unfair advantages with big corporations or trendy tech companies, every business, small, new, or established should have some sort of unfair business advantage. Sure your business can operate without one, but who really strives for a mediocre business?
Example: In my city, there's a store that sells baby gear and accessories. Their unfair advantage is that the owner only stocks his store with products he truly believes in. He then makes sure all his staff are super knowledgeable to help you make a great choice in a short amount of time. You can get all the same things at big box stores or amazon, probably even at a better price, but customers still flock here for the unfair advantage.
How to Establish your Business's Unfair Advantage
As a fractional CFO I'm often part of strategic planning and operational sessions. As part of my initial conversations with new clients I often notice that businesses either don't really have an unfair advantage or they have lost their way in exploiting it.
Tips for Establishing your Business's Unfair Advantage
Maybe you've got it easy, you've got a unique business or service or very few competitors. For you, customers are actively seeking you out and your business advantage is simply the product or service you provide. Unfortunately most businesses operate in competitive landscapes where your product or service might not differentiate all that much from your competitors. In these cases, try these tips to give yourself the edge:
1) Narrow your business and do it well. Don't ever think you can be everything to everyone. Often when business owners are struggling they consider bringing on new products or services to grow sales. Instead, focus on your core products and services to deliver exceptional quality and grow your sales that way. A niche type focus also helps your customers recommend you to their contacts in very specific scenarios.
2) Ask customers for feedback - Your customers are going to have a crazy amount of insights but you have to ask. Make sure you are asking personally and not through things like generic surveys you send to everyone. Personal connection is the best way to get meaningful answers. Make sure your questions are worded in such a way to help determine why they chose you over a competitor. For example, "what made you shop here today?"
3) Scope out your top competitors - No, don't just copy them, but you can certainly glean some critical insights for your own business. Check them out from all angles but I certainly wouldn't only consider what they are doing well. Instead, also try to focus on what they may be doing that could use improvement. You stand a better chance at gaining on them by improving on their weaknesses rather than competing against their strengths.
4) Never make your unfair advantage your price. Simply said, you are never going to win and you are going to trade way too much of your time for too little return. Besides, who wants to be referred because they are the cheapest person in town? Base your prices on the value you are providing rather than what your competitors are charging. Keep competitor prices in mind but that shouldn't necessarily dictate the price. Right now, there's SO much choice and noise out there, people value solid recommendations and advice just as much as the lowest price.
5) Look internally. Often people start businesses because they have a passion for whatever that business might entail. This isn't always true but if you are truly passionate about your business, make sure it shines through to your business somehow. If you are seen as someone who is extremely knowledgeable and that you LOVE what you are doing, people are going to notice that.
Getting your Unfair Business Advantage Back
I get it, business owners are BUSY. Sometimes in the hustle and bustle of operating your business you can lose track of what made your business special. What your business was "known" for might not really be true anymore. I'm not saying simply go back to what worked 5 or 10 years ago, things change and you've got to adapt, however, just plugging away without an unfair advantage isn't the way to go. Fortunately if your business is established, you've got experience on your side, however, in my opinion, many of the things I recommended above for new business owners are also key to getting your advantage back. Start there but also check out these tips:
1) Leverage your experience. Experience is earned and can't be purchased. Your unfair advantage might lie in your experience, relationships, contacts, etc. Make sure you are making the most of your position in the market. Try to get better prices from your suppliers, advertise your experience and know how, talk about how to work better with your best customers, ask your customers to recommend / review you, etc. You'd be amazed at how much more you can get because you've been around for a while. Unfortunately, many business owners don't leverage their experience.
2) Innovate your business. As an experienced business owner within a certain industry, there's no one better equipped to innovate your business than you. Innovative businesses often gain an unfair advantage naturally since they are doing business in new or different ways. However, innovating is a bit of work and you need to commit. Doing business the same way is comfortable and safe but if you clearly don't have a unfair advantage you should try new things. In addition, many times lack of time or energy gets in the way of actioning things you know that could be done better. I urge you to make the time because your customers are certainly noticing.