How can you
learn about your competition, and what they think, and what they’re going to do in very concrete terms? I’m Mike Sandman and we’re going to talk about the details of how to understand what competitors are thinking, what they’re doing, and why they’re doing it.

Observe Your Competition

Observe them, look at them, how big is their establishment, where are they, are they in the high rent district, in the low-rent district, or are they virtual? What kinds of cars are parked outside, if they have a retail location? How many people are working there and what sorts of qualifications do they have? How have they built out their facilities and what sort of furnishings do they have? If they’re carrying inventory, do they have a lot? Do they use a fulfillment service? What kind of technology do they use to connect to their customers and what sorts of promotions they do in print digital marketing and social media?

Ask About Your Competitors

How do you find all that out? Well, ask others about the competitors. Ask suppliers, ask customers, you can ask economic development officers, government regulators, there are public records you can look at, trade associations that you can talk to, and you can ask all of them directly. Sometimes small businesses don’t really think about the fact that they compete with a group of other companies who are local to the area, but there are other organizations doing exactly the same thing outside their geography. And you can talk to owners and managers of companies doing what you want to do who are outside of your immediate market and they’ll be happy to talk to you, especially if you’re just starting into the business. Talk to people similarly who work at the companies that you’ll compete with head-to-head. You can certainly talk to them and ask them what it’s like to work in the business that they are in. Ask them to explain the thinking of the owners of the business about how they should compete. So let’s think about this from a rule perspective. There are three rules here. First of all, understand the published information on your marketplace. But remember that only a very small percentage of the information that you can obtain, either in print or on the Internet, is available to you.

Whenever Money Is Exchanged, so Is Information

There is an enormous amount of information that people have about the way they do business and about the way they think about competing, it’s in their heads. So what we’re going to talk about is how to find that information, and were going to use a basic rule: wherever money is exchanged so is information. Any time somebody has interaction with one of your competitors or a company that you may be competing with in the future, some form of information passes from that company to the person or the other organization the other business that is exchanging money with them. So you don’t have to talk directly to the competitors, even though quite often, you can do that. You can talk to the easiest sources, trade associations, regulators, government agencies, you can talk to vendors, customers, the distributors, anybody else who is an intermediary in the business talk about others in the business who don’t directly compete with you or with the companies that you’re interested in.

What Do Competitors Think About Themselves?

And finally, look at what the competitors are saying about themselves. They have websites, their leaders may make statements that are published in the in the local press, there’s an enormous amount of information the companies will say directly about themselves that you can learn. Remember those basic rules, and go back to them to think about where you should go to learn about how the competitors think and what they are likely to do.