ESYB2 045 - Your Business Competition
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[00:00:00] Now let's talk about how to write the Competition section of your business plan. And the biggest mistake is to say we have no competition. We are great. We are unique. Well, if you don't cite competitors, it's a sign that you don't know your market because in almost every situation there are competitors.

So it's not a good sign because either you don't know your market or. If there's truly no competition, is this maybe like a really bad business to get into and nobody else wants to be in this business or everyone else who gets into this business dies? Why not? I mean, there's so many people in the world, surely other people have thought of and started such a business.

So, that's a mistake. Mistake two is talking negatively about competition. They are cheaters, they are liars, they are spammers, they are this, they are that. No, you have to respect them. Even if you think negatively about them. It actually will reflect poorly on you if you let yourself [00:01:00] truly disparage them that much.

And another mistake is, people often say, my company is better than such and such competitor because of whatever reason. But the phrasing should be, we are different. Because the reality is that probably they are better, because if you're just starting your business and they've been in business, they're just ahead of you.

Maybe you'll be better, but right now you're different and You have to show how you're different so that whoever you're explaining this can see the light at the end of the tunnel and make up their own mind and think like, Oh yeah, this is a better approach. But in your case, you want to say we are different and explain your differentiation.

And of course you want to respect your competitors, learn from them and cooperate with them when possible because who knows what you're going through better than your competitors. In a way, you guys share a lot of your, the same experiences and you can learn from each other and there's this thing co op petition where let's say you have 10 competitors.

Well, if you pick [00:02:00] like another competitor and you befriend them and work closely with them and share ideas, share tips, well then the two of you can beat the other eight by helping each other. So sometimes co op petition really helps. Now, some ways to differentiate your business. First of all, quality of some aspect of your business or product is a way to differentiate.

Sometimes it's by the design of your business. You know, Apple, they really differentiated by the design. They had this beautiful design. Some companies differentiate by it's easier to use their product. They're less complicated. Some are just better in quality because they're actually more helpful. So, see how you can stand out in this.

Sometimes a way to differentiate yourself is to provide better customer service. Sometimes you want to say, okay, we're going to serve the high end or the lower end. And I know it sounds cool to serve the high end, but often serving lower end market segments is actually more lucrative. Think of Walmart, [00:03:00] think of Amazon.

They are more profitable retailers than high end retailers. So there's nothing wrong with serving either the high end or low end. Nothing wrong. And You can also differentiate in the topic you focus on. So for example, the travel industry. I chose a very random example just to see how creative you can get.

So you can maybe choose only backpacking travel and only in like cold or freezing areas. Right? So that's your thing. And that's how you differentiate. Because the travel industry is just too gigantic overall. So you have to differentiate anyway. And of course, long term, you want to differentiate by standing out by being the best, your track record, your customer success.

You have to stand out by building a brand that people associate with best in class. So now that we've covered that, let's quickly go over the competition section of my business plan. So you can see how I approached it. So you see, I have about six. different types of competitors. We'll go [00:04:00] over them. You want to explain how you're different.

At times, you want to mention specific ones. So, for example, there are some gimmicky business plan apps. There's one specifically like the 5 Minute Planner. What can you do in a 5 Minute Planner? Essentially, they just have you fill out the blanks and you end up with some copy paste plans. So, of course, you can say we're different because our app helps to create more professional plans instead of the copy paste plans.

Also, you don't have to mention other apps. competitive products. For example, it doesn't have to be only apps. See, people often plan with pen and paper, written business plans. The advantage of the app is that it's easier to carry it around. You can share it with your partners. You don't have to be in the same space to edit it.

It's easier to edit and you can share it with your team. So the app offers some advantages over traditionally planning. Then of course, there's additional business related apps that are not. apps and even though it might seem silly to mention them here because it's unrelated, in fact, it is [00:05:00] related because they clog up the app store search ecosystem, which actually limits the exposure of my apps.

So business card apps is a popular genre and also like big billion and million dollar apps like apps that. Transcripts are from news sites like Business Insider or Google apps or Evernote. Even though they're not exactly my competitors in terms of usability, I do compete with them for rankings for different keywords and app stores, which strongly impacts my business.

So you can see how I take the approach of mentioning very different, not just Not only different competitors, in terms of companies, but different types of competitors. And that creates a broad overview of what competition really looks like.

