As a small or medium-sized business owner, you’re likely always looking for ways to gain an edge over your competition. Just as in sports, where home-field advantage can often be the deciding factor, your business can establish its own competitive advantage to stay ahead. In this blog, we’ll explore how to identify and build your business's competitive advantage to stand out in your market.
Imagine the Chicago Bears playing the Miami Dolphins at Soldier Field in January. The cold, blustery winds of Chicago in winter—what locals call "Bear weather"—give the Bears a natural advantage. The Bears are used to playing in these harsh conditions, while the Dolphins, coming from sunny Miami, struggle to adapt.
Similarly, your competitive advantage is what sets your business apart in your marketplace. It’s the edge you have over your competitors, whether that’s due to a unique product, superior service, or efficient processes. But how do you identify what makes your business special?
An easy way to start is by asking yourself this question: What are the three “uniques” of your business? What do you do differently that makes customers choose you over others?
At Kaizen CPAs, we’ve identified our three uniques using the Entrepreneurial Operating System (EOS) method. Initially, they didn’t seem all that special, but once we brought them to the marketplace, they resonated deeply with our clients. That’s because what might seem ordinary to you could be incredibly valuable to your customers.
Talk to your customers: Ask them what they value most about your product or service. What problems do you consistently solve for them?
Listen to pain points: Are there recurring issues your competitors fail to address? If so, solving those problems could become your competitive advantage.
For example, in our business, common pain points we hear from potential clients include things like:
"I pay for service but never get my financials on time."
"I don’t receive my monthly financials."
"My accountant doesn’t answer the phone, and now I’m stuck with a surprise tax bill."
We identified these issues and developed solutions—ensuring timely financial statements, year-round tax planning, and dedicated teams to promptly answer client inquiries. By addressing these pain points, we gained an advantage over competitors who weren’t solving these problems.
In many cases, a strong competitive advantage doesn’t necessarily come from offering something completely new—it can be about delivering consistent, reliable service. The market is full of businesses that fail to consistently meet customer expectations. You’ve probably heard people complain about calling a contractor for a quote and never hearing back. Reliability and consistency become key differentiators in such situations.
How many times have you been frustrated by unresponsive businesses? In an environment where customers often encounter inconsistent service, simply being reliable can set your business apart.
Another way to create a competitive advantage is by analyzing your competition. What do they fail to offer? What weaknesses can you capitalize on?
You could do this by playing “secret shopper,” experiencing their service firsthand, and identifying gaps. For example, perhaps you take your car to a repair shop and they don’t provide a comprehensive vehicle inspection. In response, you might develop a process where every car in your shop undergoes a 100% inspection, and customers are clearly informed about the results.
If your competitors are missing opportunities to deliver more value, that’s your chance to step in and offer something better.
One of the worst ways to build a competitive advantage is by focusing on being the lowest-priced option. While pricing can be a competitive advantage, it’s often not sustainable. We preach that profit is good for everyone involved. It keeps the business owner motivated, ensures employees are fairly compensated, and allows reinvestment into better products and services for customers.
Competing on price can lead to burnout, under-delivery, and lower quality. Instead, focus on creating value through superior service, unique offerings, or more efficient processes.
At Kaizen CPAs, we emphasize strong systems and processes. We have structured strategy sessions and systems in place to ensure our clients get timely, accurate service. Our accountants aren’t overwhelmed because we create leverage within our team, allowing them to answer client calls and focus on building relationships.
These processes ensure consistency, which, as we’ve already discussed, is a major competitive advantage. When clients know they can rely on you to consistently deliver on your promises, they’re more likely to choose your services again and again.
Sometimes, your competitive advantage doesn’t have to do with the product or service you offer. It could be how visible you are in your community or industry. For example, being active in local chambers of commerce, attending industry events, or building a strong online presence can make you top-of-mind when potential customers are ready to make a purchasing decision.
Many businesses focus solely on what happens inside their building, but don’t forget about what’s happening outside. The more you put yourself out there, the more people will gravitate toward you.
Creating a competitive advantage doesn't have to be complicated. Start by identifying what sets your business apart, solve the pain points that your competitors ignore, and ensure consistent, reliable delivery. These steps will help you stand out and stay ahead of your competition.
If you’re looking to develop your business’s competitive advantage, we’re here to help. At Kaizen CPAs, we specialize in helping businesses like yours create strategies for growth and success. Click the “Let’s Chat” button to get started today!