A competitive advantage can help set your business apart from others, and can often be what customers love about you. It happens when customers believe you offer superior products and services compared to your competitors.
Why should you create a competitive advantage for your business?
Successful small business owners craft a competitive strategy, which considers how their business will compete against others — either by being different, or by serving a niche market where there are no other competitors.
Some entrepreneurs try to copy what’s succeeding already. On one hand it makes sense to do what’s already been proven to be successful. But on the other hand, why would customers buy from you if you’re exactly the same as your competitors?
Think about a competitive advantage from your customer’s point of view. At least they have some history with your competition, so they’re lower risk. With you, they may have no history. The best way to lower that risk is to clearly communicate to your customer why you’re different.
Where competitive advantage comes from
Competitive advantages in small business are often based on price/value. Sure, larger businesses may be able to offer lower prices, but small businesses can offer greater value, like superior customer service. Small businesses can adapt to changing conditions quicker than larger ones, and are more responsive to what customers want. Small businesses can also serve niche markets, or small markets with unsatisfied needs.
So – what’s your small business’ competitive advantage? How do you clearly communicate that to the market?