Half a million businesses.
That's how many businesses start up each month, according to statistics.
Here's the real gut-punch truth: More businesses shutdown than startup each month. The failure rate of small businesses is anywhere from 80-90%, depending on where you're getting your numbers and how you're crunching the data.
- A lot of business launch each month
- A lot of businesses fail each month
Why do so many businesses fail? There are a medley of reasons, ranging from systemic forces to anomalous circumstances. One prevalent reason for business failure is uniqueness, or lack thereof.
If your business is not unique, chances are it will not thrive.
Forbes contributor Eric T. Wagner identified uniqueness as the number two reason for business failure:
"[There is] plenty of noise and chaos for those without uniqueness fighting for the bottom scraps. Most times this is a slow killer of businesses. Barely hanging on, entrepreneurs with some customers and some revenue skimp along for months or even years."
Bplans diagnoses lack of uniqueness as a primary business killer:
"Lacking uniqueness and value...you probably have a lot of competitors and are failing to stand out in the crowd."
Entrepreneurial legend Evan Carmichael says something similar:
"Many businesses have failed because they are just another "me too" business."
Other startup advisors share the same sad truth: Businesses fail because they are not unique.
In other words, there is a general consensus on this topic. The obvious question is how can my business be unique?
I've created this list of diagnostic questions that will help you to understand if your company is unique and how to develop an unique angle.
1. Can you explain why your product or service is different and superior?
If you can't explain why your business is unique, then it probably isn't. Before you establish a company or offer a new idea, discover one angle that will set you apart from everyone else.
When you've discovered it, then you're in a position to explain to potential customers and clients what makes you different, and why they should buy.
2. Is there something in your industry that you can do differently from the competition?
Identify the one thing that you can do differently. Many goods and services are so standardized that it's hard to think outside the box. This is exactly the kind of industry that is begging for a breath of fresh air.
If you can do something differently -- like allow people to get a taxi via their mobile phone, a la Uber -- you can disrupt an entire industry.
3. Can you give the customer more value than your competition?
Customers care about value, and little else. If you can provide a level of value that exceeds any one else in the marketplace, you automatically win.
4. Can customers remember one unique thing about you?
- Your flamboyant personality
- Your office architecture or design
- Your classy customer service
- Your brilliantly packaged products
- The high quality candy you give to clients
5. Does my business offer an unique solution to a common problem?
The set of problems in your industry is fairly standard. The set of solutions, however, doesn't need to be. If you can provide a solution that is better in some way, then you've created differentiation which will translate into market dominance.
6. Are your prices the same as the competition?
Price is one area in which you can be unique. You can either sell dramatically lower or dramatically higher than the competition. Don't immediately shy away from selling high. A high price point can establish you as a high quality leader in the market. A low price point can allow you to quickly enter and control a market. Weigh your priorities.
7. Can you provide the product or service faster?
In many industries, speed is the name of the game. Customers are willing to pay substantially higher prices, as long as they can get what they want faster. Take Amazon prime. Their free two-day shipping is an huge source of appeal.
8. Can you provide a product or service that comes with better customer care?
If I had to pick one thing from this list to focus on, it should be this point. Caring for your customers is priceless.
If you can provide superior customer care, you can establish yourself as an unique player in the marketplace. This is how Zappos built their billion-dollar business. Treating customers with respect, value, and over-the-top service can transform you from a plain-Jane participant, into a Class-A player.
9. Can you build a business in a better location?
Real estate professionals know that location is the most important quality of a property. The same is true for brick-and-mortar businesses. Building a business in a compatible location and you will stand out in the market.
10. Do you have unique branding?
Marketing professional Tom Egelhoff writes this about differentiation:
"No two companies can occupy the same perception in the customer's mind at the same time. We're not talking about a physical presence, but an image that comes into the customer's mind when they think of your business."
Your image is built on branding. A company that brands itself just like every other businesses is doomed to blend in with the crowd.
Unique branding is a simple and low-cost solution to being perceived as an unique business in your space.
Conclusion
Yes, you should be highly aware of your competitors -- how they're doing, what they're doing, where they are, and how successful they are.
It is not necessary to obsess over their successes, but rather to differentiate yourself in strategic ways. Although you share industry space and market share, you should not be a clone.
Successful businesses are unique in some way, no exceptions.
So, how will your business carve out an unique position in the market?