If we had a nickel for every time that phrase was uttered when discussing the potential for business success…we’d all be millionaires. It’s hard to refute the thinking behind the adage; the ideal spot, with the right amenities, amid your target demographic, and secured at the right price…how can you lose? A recent discussion in one of our Business Plan Development workshops, however, got me thinking.
We were talking in general terms about positioning your business relative to your competition, about doing your due diligence in terms of market research, and undertaking a comprehensive SWOT analysis to inform decision-making. Following some healthy debate, most participants asserted that the best place to locate is as far away from the competition as possible. Mine was the lone contradictory voice in the classroom. Interestingly, research suggests I’m not alone in my thinking. When determining where your business should be located many experts agree that it’s more straightforward than a lot of entrepreneurs make it.
In an Entrepreneur.com article, Greg Kahn, founder and CEO of the U.S. based Kahn Research Group says, “Quite simply, the best place to be is as close to your biggest competitor as you can be." Kahn, a behavioral research veteran who has done location research for Arby's, Home Depot, Subway and other major and minor players continues, "Foot traffic is obviously important, but landing the 'perfect' customer is far more crucial.” That’s the crux of the matter; finding the best way to leverage the ideal customer, providing you have a quality product to back up your efforts. By being in close proximity to your real competitors you glean benefit from their already proven marketing efforts. "Why spend the money when they've already [spent it] for you?" asks Kahn.
Location is good; healthy competition is better!
Maurice McCarthy, a Business Advisor at the Centre, wrote a blog in early December about SWOT analysis and its important role in business decision making.
SWOT analysis is a key component of successful strategic planning, which I’ll bring up again in blogs-to-come. Right now though, being that it’s a new year and we are all thinking about new starts, I thought I’d go back to basics on this issue.
Consultants love to talk about strategic planning. I could spend a whole afternoon waxing almost eloquent about the advantages it gives your business, how you can’t get along without it, why you need to think about it at every step of your business development….blah blah. In fact, we did a piece on this in July.
Problem is there’s too much talk about strategic planning and not enough action. There are way too many folks charging big dollars and giving you formulas and templates without actually getting you involved in the process. In many cases you are left with a product you can’t actually use to chart your future and whose best function is that of a door stop.
A strategic plan shouldn’t be abstract or ambiguous or at such a high level that it doesn’t touch down at any point on what you actually need to be doing this afternoon to become a millionaire in ten years. A strategic plan, when it’s all said and done, should be a precious revelation, a treasure trove of both inspirational thought about what you want to do/be/have in your business as well as the map to get you to the doing/being/having in a timely fashion.
Interested? Stay tuned.
This is an entrepreneur’s best friend! No it’s not a dog, but properly and consistently applied, it can prevent your business from becoming one – a dog that is.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is a powerful framework that you can use to analyze: individuals (starting with yourself), competitors, suppliers, clients, prospects, ideas, products, services, and much more.
A SWOT Analysis is not a one-time occurrence. At the planning stage, determining your strengths and other’s weaknesses will be critical in positioning your business to exploit opportunities and deal with threats. As your business matures and the marketplace changes, you will need to evaluate your position to determine what adjustments you need to make.
By conducting a regular SWOT Analysis, you will be able to assess whether you are right for the business and whether the business is right for you. Being truthful in your answers will enable you to build a strong foundation for your Strategic Plan which will outline the next steps for your business.
Check out this website for a quick SWOT Analysis overview.