How to analyse your main competitors

Why Bother Looking at the Competition?

Starting a business is all about carving out your own space. So, why spend time looking at what everyone else is doing? Think of it like being a baker. You wouldn't open a bakery without visiting the others on the high street to see what cakes they sell, who has the best coffee, or who always has a queue out the door. It’s not about copying them; it’s about understanding the local appetite so you can offer something wonderfully different.

This task is your chance to become a detective. By looking closely at your competitors, you can spot what they do well, where they fall short, and—most importantly—where the golden opportunities are for your new business.

Step 1: Identify Your True Competitors

First things first, you need to know who you’re actually up against. Competitors usually fall into two camps:

• Direct Competitors: These are the businesses that sell a very similar product or service to the same audience as you. For example, if you're opening a dog walking business in Bristol, other dog walkers in Bristol are your direct competitors.
• Indirect Competitors: These businesses solve the same problem for customers, but with a different solution. For your dog walking business, an indirect competitor might be a local doggy daycare centre.

For this task, your focus should be on at least three direct competitors. These are the ones your future customers are likely choosing from right now.

How to find them:

• Google is your best friend: Search for the service you offer in your area (e.g., "handmade jewellery UK," "accountant in Manchester"). See who pops up on the first page.
• Scour social media: Search on Instagram, Facebook, or TikTok for hashtags related to your business. See which brands are active and engaging with customers.
• Browse online marketplaces: If you plan to sell on platforms like Etsy, Not On The High Street, or Amazon, see who the top sellers are in your category.

Step 2: Put Them Under the Microscope

Once you have your list of three (or more) competitors, it’s time to analyse them. Look at four key areas for each one. Grab a notebook or open a spreadsheet and start making notes.

1. Their Products or Services
   What are they actually selling? Go beyond the obvious. Look at the range, the quality, and what seems to be most popular. Ask yourself:
   • What are their signature or best-selling items?
   • Are their products high-end and luxurious, or cheap and cheerful?
   • Do they offer any special features, customisation, or extras that you don't?
2. Their Pricing
   This isn't just about finding out a single price. It’s about understanding their pricing strategy.
   • How much do they charge for key products or services?
   • Do they offer package deals, subscriptions, or 'buy one, get one free' offers?
   • Does their pricing feel fair for what they offer? Is it premium, mid-range, or budget?
3. Their Marketing
   How do they talk to their customers and what do they say? This tells you a lot about who they are trying to reach.
   • What does their website look and feel like? Is it professional, fun, or a bit dated?
   • Which social media channels are they on? How often do they post?
   • What kind of message do they push? Are they all about quality, convenience, or price?
4. Their Customer Reviews
   This is where you’ll find the real gold. Customer reviews tell you what people genuinely think. Look on Google, Trustpilot, Yelp, or their social media pages.
   • The Good: What do customers consistently praise? Is it their speedy delivery, friendly service, or the beautiful packaging?
   • The Bad: What are the common complaints? This is your gap in the market! If everyone complains about slow response times, you can make fast communication your superpower.

Step 3: Connect the Dots and Find Your Opportunity

Now you have a pile of notes, it’s time to make sense of it all. The goal is to find a gap in the market that your business can fill perfectly. Look through your research and ask yourself:

What is something customers want that nobody is offering? Or what is a common problem that nobody is solving well?

Here are some potential gaps you might spot:

• A Service Gap: All your competitors are online-only, but customers are crying out for a physical shop or face-to-face consultations.
• A Price Gap: Perhaps every other business is very expensive, leaving an opening for a more affordable, high-quality alternative.
• A Quality Gap: Maybe the existing options are cheap but don't last. You could be the one who offers a reliable, premium product built to stand the test of time.
• An Audience Gap: Are all your competitors targeting young professionals? You could tailor your business to serve students, families, or retirees instead.

By understanding your competitors, you're not preparing to fight them; you're preparing to be different from them. This analysis will give you the confidence that there is a real need and a clear space in the market for your brilliant idea.