When creating a new service (or business in general), it’s crucial to gauge the potential profitability, workload, and likelihood of success.
All service providers, from new entrepreneurs to seasoned pros, from solo providers to large teams, grapple with the question, “Is my industry too competitive to succeed?”
Putting yourself out there is hard enough without having to worry about whether you can stand out in a sea of competitors.
But is it best to choose an industry with few (or no) competitors, or to roll with one where competition abounds?
Zero industry competition forces you to invent a “new wheel.”
Are you up for the challenge of becoming an “inventor,” or are you just trying to get clients to your business more easily? If you’ve never run a consistently successful service before, perhaps “inventing a new wheel” will make the endeavor more challenging than it has to be.
First thing’s first:
When creating a service that (you think) hasn’t been done before, it’s highly likely that there are several important reasons the idea hasn’t caught on.
For instance, consider the possibility that:
- someone has already tried it and failed,
- it’s way too “out there” to take hold, or
- it was too impractical, in some other way, to succeed.
Case on point, many of the “never done before” startup ideas that fledgling service providers came to us with were dangerously bad ones.
For example, one team was insistent upon rotating a mish-mash of ad banners on their website while users listened to their podcast. This was despite being advised that users do not sit and stare at a page while listening to a podcast, and despite also being shown hard data that banner ads (or ads of any sort) actually repel, and do not attract, users’ attention.
Not to mention the fact that discerning businesses won’t pay to advertise on a brand new site that has absolutely no traffic, metrics, or marketing plan.
So how would they have gotten advertisers?
And even if advertisers didn’t do their due diligence and verify their metrics beforehand… isn’t it morally dicey to ask them to pay for ads on a site that you know is still “dead”?
A prime example of a dangerously bad idea for the potential profitability of that fledgling business, but also, for that business’s target audience.
Second of all, when you see no competitors in your space, getting started is much tougher.
For example, assume your friend wants to launch a “mobile face mask repair” service, but there are no similar companies out there.
What makes him believe that anyone will pay him to come repair holes in their face masks? (Asking people “would you pay for this?” is NOT a reliable, objective basis on which to launch a service.)
And then, what type of person does he expect wants to use a mobile face mask repair service? Why? And how does he know?
At this point he’d need to start by (literally) surveying the market to see if there’s interest before he invests too much time and money into this idea. This is time/money that could be spent just setting up a service in an industry that already has proven market interest.
Third and finally, creating a brand new offer is different (and much harder) than creating a spin-off of an already-successful one.
For instance, there are hundreds to thousands of computer repair shops in every state.
Are you going to be just another computer repairwoman? (Hint: Too much competition.)
Or will you focus on the CLIENT and not your service, and decide to offer computer repair to a unique subset of people (a “niche,” “target audience,” “ideal client,” etc.)?
Having zero competition sounds amazing to a lot of entrepreneurs. But the fact is, trying to build a new industry is risky—and unrealistic.
Remember, “there’s nothing new under the sun.“
While being an “inventor” is fine, it’s often so much easier to just go out into the world, see what’s already selling well or trending, and build your service around an industry you can already verify is “hot.”
Lots of competition in an industry indicates high demand.
Let’s face it: Your idea is most likely NOT unique.
In all the years I’ve spent helping businesses start and grow, only about 2% of entrepreneurs had a truly unique—and viable—idea. There is almost certainly someone out there already selling the type of service you offer; you just have to ask the right questions enter in the right search queries.
Although it may not seem like it at first, that the industry exists is great news.
The cool thing about targeting an existing, reasonably competitive industry is that it lets you jump-start your (re)targeting efforts.
Since there are already clients out there buying the service you want to sell, you can feel confident that the industry is profitable.
There are other, more in-depth ways of checking this, but competition is a great, basic measure of potential interest in the niche you’re considering. Even more true if you see lots of new companies popping up regularly in your desired niche.
Even if your industry is quite competitive, another measure of long-term success is to ensure popularity isn’t trending downward over time. One way to check the relative popularity of the industry you’re considering is using Google Trends.
Let’s go back to that mobile face mask repair idea:
From the chart above, we see that “face mask repair” was trending in April 2020 due to the Coronavirus plandemic.
But are users interested in repairing them themselves, or hiring someone to do it for them? What kinds of face masks do they want repaired? How much are they willing to pay? What’s the average price? And if they are looking for a service, rather than DIY instructions, will they pay a premium for a mobile repairwoman?
These are the kinds of questions your marketing strategist may explore when building your marketing plan or ideal client profiles. Again, the point of looking at industry trends is to see what’s gaining or losing popularity.
One warning about gauging industry popularity using this tactic:
Some industries have such low comparative volume that they may not display on Google Trends at all. Or if they do, popularity can seem too low to be worth your time.
That doesn’t necessarily mean they’re not still viable industries to explore.
For instance, a key thing to note about Google Trends is that the number on the trend chart does not indicate the number of searches, or people searching, for a particular term. It’s a relative popularity number that compares the term’s popularity over time in the given region, where 100 is its most popular point, 50 is half as popular, and 0 indicating that there wasn’t enough data to evaluate at that period of time.
Interpreting this data can be tricky, and best carried out by a trained marketing researcher or strategist. With that in mind, I would be happy to consult with you and present data to help you gauge the viability of your idea, industry, or niche. Just write us and express interest in ordering a consult.
The Reveal: High competition can be advantageous… if you focus on the right things.
Remember that choosing a particular group of people to sell to moves you closer to finding a truly viable industry. Also, remember that it makes it easier to sell to them because they feel like your offer is tailored directly to their unique needs.
Over-focusing on the businesses you perceive to be “competitors” means you’re ignoring the one person who matters most: your ideal client.
So long as you’re serving their needs and showing you understand them better than anyone else in your space, the competition hardly matters.
To serve your ideal client’s needs best, you must get to know them better than anyone else.
Consult your Ideal Client Profile as a refresher on exactly who your target market is, and what drives them to seek the solution you offer. Then, refine your offer to speak directly to that internal motivation… and watch business grow easier, faster, and more effortlessly than you’ve managed to before.