If you’ve spent time and money developing products, services, prices, channels or a way of doing business that gives you an advantage over your nearest rivals, it makes sense to keep these unique and exclusive to your business for as long as possible.
Sometimes you can get a permanent advantage such as legal protection on intellectual property, but for most small businesses it’s probable competitors will try to battle their way into your market. When you first start up it can be like surviving a siege, as competitors try to tear down your castle walls. Luckily there are things you can do to bolster the ramparts.
Look to dissuade new entrants by focusing on the barriers to enter your market, or anything that makes another business owner think it’s ‘too hard’ to compete directly. An established brand in the minds of customers is one way. If you asked ten people to name an online marketplace, an accounting software provider and fast food, nine of them will probably say Amazon, QuickBooks and McDonalds. These businesses have invested in their brands to be top of mind.
To prevent new businesses entering your market try:
Anything which makes someone think twice before setting up outside your business is useful.
Having the law on your side is handy when it comes to stopping any imitators. Your ‘IP’ includes the parts of your business that you can legally protect and take action if anyone breaches your rights.
This includes:
To help decide what to do, make a list of the essential elements of your business you can’t do without, identify if they can be protected and then weigh up the cost of legal protection versus the possible loss.
An intellectual asset is a competitive advantage that usually can’t be legally protected, such as your business contacts, networks, your business know-how and knowledge of what customers want.
In these cases, you can still build a barrier by:
List what intellectual assets are mission-critical to your business and outline how you’ll keep these elements confidential.
If one of your key advantages is being able to source inventory or materials cheaper than competitors (allowing you a higher than average margin or to price lower while still making a decent profit), protect it by:
Having an amazing business with happy customers that refer business is the ultimate way to protect your competitive advantage, but even then, it’s useful to not take anything for granted.
Audit the quality of your products or services to check you are better than the competition. Do your products last longer than your rivals? Do you have superior after-sales service? Are you the most reliable? Find out what makes you awesome and put steps in place to make sure the customer experience is consistent every time.
If you can prove you know more than anyone about your industry, it’s a great advantage and hard to copy. Post your thoughts in social media, speak at well-known events, run webinars or podcasts with other industry experts, focus on your qualifications and highlight any testimonials from high profile people or businesses.
At the end of the day if you’re trading and making a profit then you’re doing something right.
Find out what that ‘something’ is and plan to protect it for as long as you can.