When starting her personal shopping business, April Poppe realized she would need a sideline. So she also helps seniors and others downsize and get organized.
Know the competition if you want to compete Research pricing, margins and earnings Use rivals' weakness to enhance product EMILY CHUNG SPECIAL TO THE STAR
April Poppe can thank her competitors for making her a successful entrepreneur.Starting a personal shopping business in Toronto seemed like a great idea, but after researching those already in the business Poppe, 36, realized she would have to shop for a way to branch out if she wanted to make money. Now, her business, April Poppe Personal Services for Hassle-Free Living, has a successful offshoot that helps seniors and others downsize and organize their homes.Competitive intelligence is not just smart, but also is necessary for aspiring entrepreneurs and those already in the field. Researching the pricing, margins and earnings of others in the same field can give owners an idea what to expect. And learning about the competition's strengths and weaknesses, as well as their new products, technologies, mergers or alliances, helps business owners develop effective marketing strategies.In the big business world, competitive intelligence is a given."Is Coke studying Pepsi? Yeah. Is Pepsi studying Coke? Yeah," says David Gibson, Toronto chapter co-ordinator of the Society for Competitive Intelligence Professionals and principal of the management consulting firm, Gibson Kennedy and Co."The only difference between what happens in larger businesses and what happens in smaller businesses is larger businesses tend to do it in a more formal fashion," he says.Competitive intelligence that meets small-business needs isn't difficult to obtain, says Lisa Shepherd, president and chief executive of Mezzanine Consulting Group, which helps small-business clients research the competition as part of an overall marketing plan."Basically, I just Googled `personal shoppers,'" says Poppe. She discovered most of her competitors had diversified. One was also an image consultant. Another was a part-time property manager. Researching a woman who did only personal shopping proved what Poppe had already guessed."I found out what she made, and did the math and said, `That's a great service but I can't really make a living doing that.'"By chance, Poppe was asked to redecorate and organize a friend's apartment. Positive feedback prompted her to research professional organizers — and the second half of her business was born. Since then, Poppe has kept track of her competitors by becoming involved in a professional association and knowing her strengths.Most people start a business because they know the competition isn't doing a good job, Shepherd says."But maybe over time, they get a little bit lax," she says. "And after two or three years, they're resting on their laurels." That's imprudent."I would say, at least annually, it's good to have a mini analysis," says Gabriella Zoltan-Johan, a business consultant at Centennial College's Centre of Entrepreneurship. She also suggests companies re-analyze the competition if they make a strategic change in direction or target a new market, because they might have new competitors.When Keith Morrison, CEO of Wright Dental, decided to start selling Dickies brand medical scrubs, he knew he was going to target more than just dentists but he didn't know where to begin. About four months ago, Morrison, consulted the Innovation Synergy Centre in Markham, a free business advisory service funded by the Town of Markham and several partners. Consultants there helped Morrison, 54, research his competition. He learned his 14-person, 55-year-old Richmond Hill company was up against much larger competitors who targeted hospitals and sold scrubs in bulk to hospital operating room staff.He also learned that hospital floor staff bought their own scrubs, and would make a natural entry market. By buying his competitors' scrubs and comparing them to his own, Morrison figured out what set his apart, so he could market them effectively.The strength of small businesses, says Shepherd, is they're quick and nimble. They need to use that agility. "There's no point in them trying to sell the same thing in the same way as their big competitors, because they can't win," she says. "What they need to do is understand how their big competitors are selling, where their weaknesses are, and what they can do to capitalize on those weaknesses."They can get that information from various sources. First, there are secondary sources available in the form of statistics, financial statements and documents like Web pages.But sometimes that approach isn't enough. Then business owners must turn to primary research, which involves talking to people such as customers and competitors. Often, customers will happily say what they like about a competitor's product. "You have to go sell the product to the competition's champion," says Brian Kotarba, 55-year-old managing director of Lock and Load Northeast, a division of London-based concrete manufacturer CJ Pink. Four years ago, Kotarba was put in charge of a new retaining wall product the company had not yet tried to market. He turned to Mezzanine. With their help, he researched his competitors, learning where the strengths of his product overlapped with the competitors' weaknesses. For example, he says his product survives winter freezing and thawing better."What we do is we educate our clients on the whole issue about freezing and thawing. And then, we give them our test results and say, `Why don't you compare those to the competition?'"
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