Size up your competition and set Pricing for your new Business
In order to define your niche accurately, you must first size up the competition. What are they doing to be successful? How can you improve upon what your competition is already doing? What are they missing in their service that you are able to do?
After doing market research to determine if there is certain demand for your product or service, you may have identified both the strengths and weaknesses of the competition. If you haven't identified this yet, you can size up the competition by sampling what's out there yourself by becoming a consumer. Suppose you want to launch a residential cleaning service. You could call up a company and see how well they respond. Did they get back to you in a prompt manner? How friendly were they on the phone? Were they helpful? Responsive to your needs? Whatever they failed to do, you can incorporate into your business. You may even want to try out their service in your own home. Did you like their work? What kind of pricing did they have?
Wherever the competition failed, you can design your service to shine. You may end up finding these other companies to be very good at what they do. If so, you may have to specialize, offering only carpet or rug cleaning or even window cleaning.
There is no doubt that pricing is important, but it won't be the only item that separates you from the competition. Most people are definitely price conscious, so the price of your goods or services have to be realistic. But you have to be able to profit from what you do. The public must understand your pricing policy.
You don't want to make the mistake of coming off as offering inferior goods or services just because you are able to charge lower prices than your competition. People may become suspicious of this thinking that they are not receiving quality products. Because of this sometimes mistaken perception, you may have to explain why your prices are lower. If you are able to purchase product at a more economical level than other companies, than tell your customers that "we pass the savings on to you".
If you happen to charge more than your competition, than make sure your clients know what added value they are getting. Many are willing to pay more for something if there is additional benefits like more personal service, longer warranties, or money-back guarantees.
After doing market research to determine if there is certain demand for your product or service, you may have identified both the strengths and weaknesses of the competition. If you haven't identified this yet, you can size up the competition by sampling what's out there yourself by becoming a consumer. Suppose you want to launch a residential cleaning service. You could call up a company and see how well they respond. Did they get back to you in a prompt manner? How friendly were they on the phone? Were they helpful? Responsive to your needs? Whatever they failed to do, you can incorporate into your business. You may even want to try out their service in your own home. Did you like their work? What kind of pricing did they have?
Wherever the competition failed, you can design your service to shine. You may end up finding these other companies to be very good at what they do. If so, you may have to specialize, offering only carpet or rug cleaning or even window cleaning.
There is no doubt that pricing is important, but it won't be the only item that separates you from the competition. Most people are definitely price conscious, so the price of your goods or services have to be realistic. But you have to be able to profit from what you do. The public must understand your pricing policy.
You don't want to make the mistake of coming off as offering inferior goods or services just because you are able to charge lower prices than your competition. People may become suspicious of this thinking that they are not receiving quality products. Because of this sometimes mistaken perception, you may have to explain why your prices are lower. If you are able to purchase product at a more economical level than other companies, than tell your customers that "we pass the savings on to you".
If you happen to charge more than your competition, than make sure your clients know what added value they are getting. Many are willing to pay more for something if there is additional benefits like more personal service, longer warranties, or money-back guarantees.
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