June 12, 2013
Competition has its many benefits.
Competition tells you there is a market. When you start a business you want competition because you know that there are customers who want and need your product.
When your business is mature and you already have customers, competition makes you improve each day. It forces you to offer value and make your customers happy because otherwise they will go to the competition. It makes you more efficient so you can make more profits and be more efficient.
You want competition, but you do not want so much of it. And you definitely want less new competitors. If these conditions are met you will have a monopoly of the market and more customers, more sales and more profits.
What`s the key to get competitors out of the market and discouraging new businesses from taking your market share? Building “business assets” that nobody else has.
Business assets are resources that you build or invest in now so that you will have greater economic value and leverage in the future.
Want to know more? Here are five excellent examples of business assets that you can start working on right now:
1. Customers: Make sure that your customers will stay with you for longer periods. Think about mobile phone companies. Most of their contracts are on a 2 year period. If the customer leaves before that he will pay a penalty. This will make a customer stick by for a longer period so a new entrant or a current competitor will not be able to get that customer so easily. Good contract and customer agreements are excellent business assets and you should start thinking about creating them.
2. Systems: Franchise organizations and big companies (think Subway, Mcdonalds, Starbucks, etc.) invested a lot in creating working systems for parts of their business like taking orders, producing the products, handling complains, etc. A system will reduce the costs of training and hiring, it will make scaling the business possible and will offer better service. If you offer better service at lower costs the competition will have to work twice to compete with you. Even small companies invest in customized software systems so that they will perform faster, consistently and at lower costs. Think about how you can do this in your business too.
3. PPE (Plant, Property and Equipment): It is important to have the property or equipment that will make you offer better and faster service. When I was a kid I made money by shovelling snow. When I had enough money I bought a snow blowing machine that allowed me to remove snow ten times faster so I was instantly faster and better than my competitors. In this way I dominated the market and made it harder for others to do the same.
4. Variations of the Product or Service: If a local fast food promotes itself as having 42 different side dishes this will make it very difficult for other fast food stores to enter the market. Any other company will have a hard time to create a variety of 42 side dishes from the beginning and it would be hard to offer the same value.
5. Exclusive Partnerships: Partnerships, if they are exclusive, are important business assets and they offer a great advantage. Create exclusive partnerships with suppliers and tops organizations in your country. Make sure that they will work only with you. Let`s say you work with the biggest national auto service company and that you cater for that market. If you have a partnership with that company to promote only your product you will have a considerable advantage over any newcomer.
For even more Free and Excellent marketing secrets:
Here are some questions you need to ask yourself in order to understand how you can also build assets that will crush your competition. Discover new ways to make it very hard for anyone to compete with you.
- Can you introduce agreements and contracts and keep customers for longer periods of time?
- Can you think of systems or create some in order to make your company more efficient?
- Can you invest in properties, plant or equipment that will make your produce more at lower costs?
- Can you come up with variations of the products and services that you are already selling? How can you serve the customer`s needs better?
- What partnerships could you form in order to gain new and important customers? How can you make those partnerships exclusive?
Building business assets is not an overnight thing. You need time in order to build them and it will often take more than a year. You will need to invest and the profits on the short-term will probably be lower, but it will pay off in the future. Forming a new partnership can take time and even money and you will general no revenue at first.
But once you have your assets you will be making big profits for years to come.
Make a smart plan on how you are going to develop your business assets. Plan properly and prioritize these things even if they bring less profit than other investments, like advertising.
Set a specific goal for when you want to have the assets. Make a time and performance-based plan. Insert daily tasks in your schedule that will take you closer and closer to the goal. Move the development forward every day. In time you will increase your profits impressively and you will force your competitors to go out of business, go somewhere else and you will discourage new entrants.