You’ve just heard that your biggest competitor is going out of business. What is going through your mind? You may experience a mixture of feelings: fear for your own business’ fate or sadness for a fellow entrepreneur’s loss. You may also feel an urge to figure out how you can learn from (and even capitalize upon) this event.
It’s no secret that many small businesses are reaching breaking points after the economic turmoil spurred by Covid-19. While you’d never celebrate the end of a competitor’s business, it’s important to recognize the opportunities that may open up when the landscape shifts. In this article, we’ll walk through five ways that you can create growth opportunities for your business.
1. Create a targeted intro offer.
I don’t recommend the outright purchase of a competitor’s mailing list. You have to ask yourself, what do I get if I buy their customer list? Clearly a list of customers, but what you don’t know is whether or not they will actually do business with you. The better approach is to buy an introduction from someone who has a relationship with this group. Approach the business owner to see if they would introduce your business to their client base via an email with an intro offer designed just for this group. It’s easy to track the conversion rate of a targeted offer, so you could offer a financial incentive to the business for each offer sold.
2. Choose your (ad)words.
Google Ads is an online advertising platform developed by Google, where advertisers pay to display brief advertisements, service offerings, product listings, video content, and generate mobile application installs within the Google ad network to web users. Google is where people search for what to do, where to go, and what to buy. Your digital ads can appear on Google at the very moment someone is looking for products or services. While Google Ads will automatically block a trademarked term in ad copy, you can use a competitor’s name or trademark as a keyword to drive traffic to your own site.
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3. Evaluate your staffing needs.
As a business owner, one of the worst decisions you have to make is laying off a team of qualified people. You have the ability to help your fellow business owner find gainful employment for their staff while filling any gaps you may have in your front desk or instructor roster. Start by reaching out to the business owner to offer your condolences for their closure, and ask if you can help by providing job opportunities for their staff. When approached the right way, the business owner will have an opportunity to vouch for their best employees and give candid feedback about the limitations of others. By approaching hiring in this way, you’ll bring in employees with a network of clients and save money in recruiting costs.
4. Evaluate your equipment needs.
From spin bikes and weights to lockers and POS hardware, the closing business may be in need of liquidating inventory with value in an incredibly time-sensitive way. In the case of a business that is closing and must vacate a leased space, delays cost the owner of any equipment in lost liquidation value; the longer they wait to liquidate, the less they recover. Take this as an opportunity to evaluate your own studio’s needs and approach the business owner with a fair offer to them to recoup some of the value of the inventory.
5. Perform a SWOT Analysis on your business.
A SWOT analysis is an incredibly simple, yet powerful tool to help you develop or refine your business strategy, whether you’re building a startup or guiding an existing company. In this exercise, you identify the strengths, weaknesses, opportunities and threats to your business, given the current environment. The closure of a similar business can be unsettling. Performing a SWOT analysis will give you an objective view on your own organization, leading to the identification of ways to strengthen your business plan.
6. (BONUS TIP) Do it all with a human touch.
Most of the guidance provided above begins with a phone call or an email to the owner of the closing business. Through this outreach, you can offer empathy and solutions when a fellow entrepreneur needs it most.
In Closing
Creating opportunities when a competitor closes can be lucrative, but you should make sure that your efforts are sensitive. Treat others as you would want to be treated – after all, in addition to seizing opportunity, it’s important to protect the integrity of your business and your personal reputation.