Millions of businesses start every year, but many of them fail within the first year. What are the reasons behind the failure of businesses? The common reasons behind the failure of business are competition, lack of experience and other teething problems. Newly formed business face severe problems on their journey to success. Most of the entrepreneurs are not experienced which leads to problems in the business. The entrepreneurs fail to make the right decisions for the business which eventually leads to low profits and failure. Moreover, there are other problems such as competition. Competition is the biggest problem faced by a new business.
There are so many businesses of the same nature that new businesses find it hard to earn market share. They fail to get recognized because customers tend to buy the products from tested companies. They don’t like to try products by new companies, therefore, the competition reaches the peak for a company. The companies that start trading have to be very careful when it comes to beating the competition and earning the customers There are multiple ways to beat the competition. This is how you can beat the competition.
1) Set benchmarks
If a newly formed business wants to beat the competition in the first few months then the owners or managers of the business should set benchmarks. The benchmarks should be based on the success of the competitors in the market. The company should set benchmarks like the specialist workforce, the sales, the number of outputs. However, it is important to set benchmarks consciously, you should never follow another business blindly. Check your financial position and set benchmarks accordingly.
2) Choose the right pricing strategy
The next way is to choose the best pricing strategy based on the products and the competition in the market. You can use two pricing strategies. Penetration pricing, it means keeping the prices low to encourage the customers to buy your products. Competitive pricing is another pricing technique which means setting your prices similar or slightly below the prices of the competitors. This allows the company to beat the competition and also leads to a possibility of higher sales.