With the worst of the recession hopefully behind us, business owners are taking the time to re-evaluate what caused some businesses to grow during the recession – and what caused others to shut their doors.
Greg Fisher, Entrepreneur expert columnist and a business researcher and lecturer at the University of Washington in Seattle, divides the reaction of most business owners into five categories:
- ‘Shout louder’ owners. These owners have not changed their offering. They are simply trying to ‘outshout’ their competition.
- ‘Beg more’ owners. These owners have taken to begging for business and are slashing prices to do so.
- ‘Lipstick on a pig trick’. The offering is not appropriate to what is happening in the world today, but its trying to look appropriate. Business guilty of this will also lack innovation – they are doing what everyone else is doing, but trying to make it look different.
- ‘Deer in a headlight’. This is probably the most common reaction to the recession – business owners are frozen. They don’t know what to do, so they do nothing.
- ‘Head in the sand’. The ostrich approach is to simply pretend there is nothing wrong with the market. According to statistics, 97% of entrepreneurs don’t worry about building up themselves in order to build up their businesses.
All of the above companies will either not survive the next few years, or they will just scrape through. In today’s highly competitive market place, companies need to appeal to consumers and other businesses. The customer is spoilt for choice. you need to give him or her a reason to buy from you.
“Companies competing for market share have actually begun to emulate each other,” says Fisher. “The ironing is that competition is making things more similar. If you want to grow your market share, you need to change your business. Step away from what everyone else is doing and differentiate yourself.”
Take a step back
According to Fisher, it’s time to take a step back and look at all facets of your business with fresh eyes. Look at your business model in the following categories: key partners, key activities, key resources, value proposition, customer relationships, channels, customer segments, cost structure and revenue structure. Map your entire business structure out under these headers. Then list your top differentiators, and then rate them. Are they a novelty (ie truly different from your competitors), can others replicate them, is there value for the customer, how effectively do you capture financial value from this differentiator and finally will it continue to be valuable in the future?
Take a step forward
Once you understand your differentiators, you can work towards making them work for you. You can also brainstorm new differentiators for your business. Review your business model canvass for areas where your business is not currently differentiated and then brainstorm new opportunities where you can differentiate yourself. If you can truly differentiate yourself while still adding value to your customer, and you can leverage that value financially, your business will experience real growth – even during a tough economic market.