When you start a new business, you need to build a lot of things from scratch. You have zero customers with little brand awareness. You don’t have the credibility to convince your customers and suppliers to buy your product or service. You don’t have enough resources to support all your needs. You hardly have any weapon in your armor to fight your competition.
Now the question is how do you build a sustainable business amidst all these weaknesses?
The solution is to convert these weaknesses into strengths that will earn you a competitive advantage.
In this article, I intend to discuss a few tips that will help you achieve it. However, you need to understand that, when you apply these to your business, you won’t be able to beat your competition from day one. It has to be a process, and will yield results over a period of time.
So here we go.
1. Brand awareness – Leverage the novelty factor
In the initial days of your new business, you are a nobody to customers and suppliers. Your company is not a known brand in the industry. And you face a formidable challenges of proving your credentials to the outside world.
But you know what? You can use this lack of awareness to your advantage. Here is how.
Introduce yourself to the outside world differently. Create an ad campaign or advertisement series that is different from the traditional ones. Choose a few unique channels to promote your product or service. Build a story around the birth of your organization. Fill it with emotions and leverage social media and other online platforms to tell this story to your potential customers.
You can look at some of the most creative advertisements here.
The ‘You are better than this‘ campaign by Sonos is a classic example for a storytelling ad campaign. The campaign adds a “we’ve all been there” flavor to all its ads. The ‘Commander‘ ad by Audi is an example of strong emotions weaved into a series of visuals.
So create an ad campaign or product launch that attracts people’s attention. A new brand coming up with such an innovative promotion can get your content viral, and put you in the limelight. You shall be able to continue to use your success from the initial promotion as a foundation to your future promotions.
2. Partners and suppliers – Give something of value
One of the main criteria for a supplier to work with you is whether your product or service is going to generate enough volumes for them to make profit out of a deal with you. And being a newbie, you don’t have past sales data to prove yourself. You probably have projections based on market studies and estimated demand, which are never 100% accurate.Click to enlighten your network with this piece of knowledgeClick To Tweet
So how do you cross this barrier?
A give and take policy works the best. That means, for partners and suppliers to work with you, they need to get something more than they do from your competitors they work with. In return, they help you grow your business by supplying raw materials or by providing business support.
So offer them a flexible deal. It could be in terms of establishing a sales based commission structure (which means they benefit when your revenue increases), or having flexible payment options, or a longer contract tenure. See what works the best for your business.
The idea here is to establish solid relationships with business partners, which is a key strength to any business.
3. Lack of resources – Optimize your business processes
In a startup, resources are scarce. And when you have numerous tasks at hand, you are not at the luxury of spending too much time to finish one. So how do you use this opportunity to build a strength?
This is when you need to think about resource and process optimization methods. It is quite obvious that one person has to wear multiple hats in a startup. And if you are the owner of the business, you do everything from strategy to paper work.
But to optimize your work, you need to map the right people to the right set of responsibilities. One person cannot be possibly an expert in every field. So map 2-3 areas of work to every employee – especially team leads and business heads – in your organization. This will ensure availability of resources on demand.
Also you need to optimize your processes by removing redundant and unwanted steps. The process could be related to recruitment, payments, finance or any other business function for that matter. This will help to improve your business’s overall productivity as well.
4. Credibility – Partner with giants in other industries
When popular people or executives of huge companies share their thoughts with the outside world, they are well accepted. But if you are relatively new in business with little credentials, people won’t listen to you even if you say the same thing the big guys do. That’s the difference credibility makes.
Similar to brand awareness, you need to establish your credibility through various means, of which the most effective one is partnering with established firms who are not your competitors.
You need to find such companies which would be interested in partnering with you.
But why would a billion dollar company consider you for a business partnership?
There you need to do some work. It is very similar to point #2 in this article – showcase the value of taking you in as a partner.
Maybe you offer a very niche service that their customers want. Or you provide them access to a unique set of customers which they otherwise would not have been able to reach. Or it could be anything else that would position your company as a valuable asset to them. So leverage those.
Partnering with such established companies will give your business more visibility. The more businesses you partner with, better is going to be your credibility.
5. Business governance – Create an open culture
Startup organizations have a flat organizational structure, mostly because they don’t have a large enough workforce to be split into teams, or because of the so called startup culture. This sometimes makes it difficult to enforce or implement certain business decisions.
But that’s the reality, and it is impractical to think about creating a hierarchical structure. However, have you ever thought of leveraging this situation positively?
Take advantage of this by creating an open culture. Some of you may say startup culture implies an open culture, but not necessarily. Open communication can exist among the founders or first few employees of the organization. But to ensure it trickles down to new joinees, you need to build it.
Most of you before being an entrepreneur – or working for a startup – have worked for a corporate. And you know the difference open communication can make. So don’t just talk about an open door culture. Implement such policies to formalize it. Encourage and educate your employees on it. You should become the model and lay the path for others to follow it in your organization.
6. Service/product portfolio – Focus on a niche
This is directly related to your core business. A few months into your business, you will most likely not have a wide product/service portfolio. You rely on one or two products or services and try to expand your customer base for those. And that makes business sense as well, since you don’t have enough resources.
But how can you make that a strength when your competitors are playing with dozens of products and services?
The way to go is by focusing on your niche and spending all your energy around it. Maybe you sell traditional fabric, or you provide logistics services to other companies. Irrespective of your business area, you can model your business plan around 1 or 2 streams you want to focus on.
Concentrate your marketing efforts, budget allocation, sales efforts etc on that niche. Build specific capabilities in the niche that your competitors do not have. Offer flexible pricing models to your customers. In short, do whatever it takes to make you the leader in your niche.
These are my best tips to turn your business weaknesses into strengths. But not every weakness can become your strength. Lack of funding is an example. So keep that in mind when you identify weaknesses in your business environment.
Are you already using any of the six techniques in your business? Let me know in the comments section. Also, please feel free to share your views and thoughts.