Nine out of ten businesses eventually disappear into the business graveyard. Amongst the businesses that manage to say alive 99.9% of them are just holding on to dear life.
Surprisingly, this does not only happen with small businesses. The large majority of big businesses just clinging on to life. The least disruption in their equilibrium will see them tumbling down faster than you can say the word fall.
A good example of this theory is big retailers. Many of the well-known retail brands are just a single payment away from going out of business. Many of them have thousands of stores all around the country projecting the image of success. A single bad winter and it’s game over, they are gone from the retail landscape.
So why is that the case, why are many businesses here today and gone with the wind tomorrow?
The simple answer is many businesses have no reason for existence.
The key question that I sting my audiences with when I conduct marketing or small business growth training is: why are they in business?
Many businesses have no reason to exist. My main market is mostly professionals: doctors, lawyers, dentists, accountants and restaurateurs. What I discover amongst professional business owners whether it is a dental practice, private medical practice, accounting firm or law firm, many of their founders simple established their businesses because they are professionals in those fields.
A lawyer might establish a law firm simple because he/she is a lawyer. Similar scenarios apply to accounting firms, dental practices or private medical practices. Their owners simply establish their businesses because they are professionals in those fields not because they want to fill a gap in their marketplace.
But the reality is this, the only reason a businesses should exist other than making money is to fill a gap in the marketplace.
A dentist may decide to open a dental practice in a particular area because he notices a need for a dental practice in that area. An accountant deciding to establish an accounting firm should only give the idea a serious thought if he/she notices the need for accounting services in their town or city.
Why is this important?
It is important for positioning in the marketplace.
Every conceivable marketplace is already saturated. Most people confuse the concept of not enough of a particular professional to literally mean that there is an acute shortage of those professionals.
Students go to university and study some subjects on the assumption that there is a shortage of those professionals in the marketplace. Therefore they believe that the moment they graduate from university, employers will be beating down their doors to employ them.
However, when they receive their certificate after four or seven years of struggle to obtain the certificate only to realise that they have been lied to by their universities. They send their CVs out; walking with their phones in their pockets hoping that the phone will start ringing at any moment and they wait and wait and wait and wait and wait and the phone never rings.
The reality is this: because there are not enough doctors in the NHS does not literally mean that there are not enough doctors. What it means is there are no enough doctors willing to work for the NHS.
Or to put it another way, there are not enough people willing or capable to of paying for their treatment. If you were feeling unwell and wanted to see a doctor immediately, as long as you are willing to pay for your treatment, you can be seen immediately.
What does all this have to do with marketplace positioning?
What it means is this: as an entrepreneur, you cannot delude yourself that there is scarcity in the marketplace for what you sell. There is no scarcity in any marketplace for anything.
There is shortage of people to pay for your product and service, which is why it is very important that from the start you create a position for yourself in the marketplace.
One thing you need to understand is you do not necessarily need to be the first in any market to be in the position to stake a particular claim in that marketplace. You just need to look for what is not been done or tweak your product or service a little to make them a little different from those that are already in the marketplace.
How to Create a Position in the Marketplace?
One of the first steps in positioning yourself in an already crowded marketplace is to look at what the established businesses are already doing and see how you can tweak it.
Some great examples Eben Pagan gave was the cases of IBM and Microsoft. IBM was the 300 pounds gorilla in the computer marketplace, but they failed to use their dominance to take over the software market, so Microsoft stepped in and dominated that market.
Microsoft also failed to use their dominance to dominate the search engine space, now Microsoft Bing with the addition of Yahoo search is still just a tiny player in the search engine space dominated by a small start-up company called Google.
Google dominated search engine but never saw Facebook entering the social media space, now Google plus is playing catch up with Facebook.
The second thing you need to understand about market positioning is that it is a mind game. What I mean by this is to position your product or service in a marketplace does not mean coming up with some cheesy statement about your product or service, it means positioning your product or service in the minds of your customers.
It means making your market believe that your product or service is the best choice for them all else been equal.
Again it does not necessarily need to be the best choice, it just needs to be positioned in the minds of your customers as the best choice.
As a small business, it is impossible to succeed in a crowded marketplace if your prospects do not perceive your product or service as the best choice to satisfy their needs.
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