As someone who has been a ‘solopreneur’
or small business owner for any length of time, you know the challenges of
being self-employed; it takes a certain kind of person to be able to handle the
long hours, dedication and sacrifice needed to get your business off the
ground.
You tell yourself it will all be worth
it - the hard work will pay off, and you will gain the financial reward and
balance in your life that you deserve. But what if that doesn’t happen? What if
you’re whistling in the dark - putting your all into a business venture that is
destined for failure?
So why might a young business ultimately fail, and how can you
enhance your chances of success? Let’s begin by exploring what it means to have
a clear competitive advantage, and why your
business needs to have one.
The Power of a Clear Competitive
Advantage
Entrepreneur and author Seth Godin
famously said that in business ‘You
are either remarkable or invisible.’
What
does he mean by this? Remarkable is exactly that, something you see, hear or
experience which causes you to stop, engage and want to share it to with others.
In business, strategy guru Michael
Porter describes only two distinct choices that will make your business stand out:
Cost Leadership
- businesses which operate on the lowest
cost base using economies of
scale and the constant drive for efficiency to deliver goods and services to
customers whilst maintaining healthy margins
Or
Differentiation
- businesses that deliver something
unique, which their customers value
and perceive to be better than the competition, outweighing the issue of price.
Achieving long term success in
business means exploiting one of these choices. This is particularly pertinent
for smaller companies; in
an increasingly competitive world, fewer businesses are making a success by
being ‘stuck in the
middle’ where your marketing & sales activities can appear uncoordinated, making it harder to find
customers and then to convince them of your offer. Such a business is invisible. Unfortunately,
as a small business owner without access to economies of scale, you are
unlikely to be able to take advantage of a cost leadership business strategy. Therefore,
the only way forward is to be remarkable
- or to put it another way…
Differentiate or Die
This
may sound brutal, but in
the modern world, businesses need a competitive advantage to survive - let
alone thrive; without differentiation your business is doomed to failure. Small
business owners in particular need to understand this reality
So how can you
ensure
your business is geared towards a successful future?
Take a Step Back
It’s easy to get totally drawn in to
the day-to-day running of your business - after all you’re excited about where
you are going and there is so much to do. But taking a step back to really
understand your future strategy is a cornerstone on which all successful
businesses are built. It doesn’t matter how busy you are - you need to set
aside some time to properly understand your business and make clear choices
about its direction. Don’t be a busy fool.
The first step is to find Your
Unique Identity
The very act of writing down what you
know about your business can help you to understand where it fits into the
market. Draw up your business’ identity by examining its strengths and
weaknesses; what are the key resources and capabilities within your business that
create value for your customers or reduce costs? Look for the things that make your
business remarkable.
Get Help!
It can be difficult to ‘extract’ yourself
sufficiently from your work in order to plan and whilst the concepts are simple
it’s not always easy. Are you clear on your competitive advantage? If not Help is available
to guide your business towards
remarkable success.
