A few years ago, a friend sought my advice regarding her new tailoring business. After she explained how she planned to operate, I asked why she believed she was going to be successful. But her answer was unconvincing. She said she would make it because “tailoring was a hot business.” This based on her research.
I pointed the flaws in her answer. And I advised her to come up with a strategy on how she was going to stand out. (There were other tailoring businesses in her vicinity.)
Lots of other entrepreneurs fall into the same trap – they spend time dreaming of riches on account that their idea is “hot.”
They neglect to think of how to stand out.
When reality hits, they find themselves cutting prices to survive. Their competitors do the same resulting in price wars that eat profits.
Try to sell a product on Amazon, and you will find lots of other sellers selling the same product. Start a blog on minimalism (or any other topic), and you will find other bloggers who have already gained traction.
This realization breeds despair. And you may think that you have no chance of making it.
There are, thankfully, other ways to compete. You just have to convince your customers or readers that you are the real deal.
1. Maximize Value
Imagine you want to buy a new smartphone. Both Store A and Store B are selling it for $99. Will you buy from A or B?
By just looking at the price, it’s hard to make a choice. So you will likely focus on value additions.
Store A offers free shipping, has a 90-day warranty, and includes a pair of headphones with every purchase. Store B, on the other hand, only offers a 90-day warranty: no free shipping and no free pair of headphones.
If you are like many, you will surely go for Store A for its amazing value.
Whatever business you are into, you can apply the same concept to stand out—add as much value as you can. If you have an online store, provide outstanding customer service. If you are a blogger, give people information they would expect to pay for.
Sarah Brooks, owner of The Frugal Millionaire, shares how long it took her to start making money from her business (blogging). She made her first $100 in the first five months of blogging. But it took a few more months before her earnings become consistent. She had to first work dedicatedly to establish herself as an authority. It was after she broke through the noise that her business became profitable.
However, value maximization comes at a cost. So carefully do your calculations and ensure that you do not reduce your profits significantly.
Here are a few examples on how value addition can be done:
- Full refund if customers are not happy with a product (most businesses already have this policy but are afraid to communicate it).
- Gifts (if you sell birthday cakes, you can include candles).
- Free installation.
- Free repair.
- Free ebooks to your readers (if you have a blog).
- Over the moon customer service (e.g calling customers to find out how they are enjoying your product).
2. Be Unique
Value maximization is a good strategy, only that it can be easily copied by your competitors. This is where being unique comes into play. And this is about focusing on features others can’t easily copy.
For instance, Benz is known for its comfortable, luxury cars. That is a unique feature, and the company makes billions off it.
You too must think of something unique in your business.
For most entrepreneurs, this exercise is not easy. First, make a list of all your resources, skills, and knowledge. Now, mark what you believe your competitors don’t have. For instance, if you have a restaurant, your 30 years of experience as a chef for a top hotel would be a great unique feature. If you are a writer, the 5 years you spent at a top publication will set you apart.
You must, however, remember one important thing: the unique feature needs to be something your customers will care about. Or else, it will not make your business stand out in any way.
The more customers you have, the more money you make. That’s what most entrepreneurs believe. Unfortunately, that is not true in all situations.
The problem is that peoples’ needs differ. And this makes it extremely difficult to provide a product or service that pleases everyone.
If you are a writer, writing about green energy for clients with solar businesses is better than writing everything for everyone.
When you are this focused, you gain expertise as you channel all your resources onto one thing. While you will lose some customers, you will grow as an expert in a certain field. And you will become a leader in it.
Of course, focus is not for everyone. But if you believe your business can accommodate it, then go for it.
I believe you enjoyed this post. And I encourage you to share it with your friends.
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