There is a solid logic behind the decision to enter a crowded market. All of the businesses that operate within it probably have reasons they are there. Most commonly, those reasons boil down to a high enough demand and the opportunity to earn good profits. Businesses flock to markets where they think they have a chance to succeed. It is probably your motivation, as well.
Understand What You’re Getting Into
It is easy to be blinded by the promises of a thriving market and to rush headfirst into a wall. The cannabis market in the United States is a great example. Even though the market is localized, there is a huge demand for the product. It is cool, it is political, and it attracts creative people. Better yet, it has medicinal uses, so it helps people.
But when you get into a state which legalized cannabis, you start understanding the weight of regulations you’ll have to deal with. Then you learn that you will have a hard time advertising your business, even online. And before you know it, you will be looking for cannabis consulting services to help you sort everything out and set up your business. There is nothing wrong with looking for help. However, it should have been your first step. The first rule of entering a crowded market is to learn as much as you can about it, no matter how low the barriers to entry might appear.
Don’t Aim For the Top Right Away
The world of business is full of examples of smaller companies that overtook their biggest competitors. Google did it to Yahoo, Facebook did it to MySpace, and Netflix did it to Blockbuster. All of the smaller companies entered into markets dominated by giants, and within a couple of years innovated their way to the top.
Playing it smart is your best bet when you enter the market. You probably don’t have the resources to take the biggest players head on right away. Even if you did, you should wait. Observe the big players on the market — they usually have a vertical they forgot to cover. That vertical should be your starting spot for growth and innovation.
While you are growing your business to the top, you will have to compete against plenty of businesses that are close to your size. Because innovation doesn’t come overnight, you will need to find a way to thrive while you are working your way towards challenging the major players.
Your business should offer value-added services or products to its customers. You need to have a unique proposition for your customers, something that no one else on the market is offering to them. The fact that your business is new and hungry for success might play into your hand. Being ambitious is a plus, and it will make you take risks to acquire new customers.
Unless you are starting a one-person operation, your employees, partners, co-workers, or whatever you call the people who join your venture, should be your biggest advantage. Good cooperation is paramount to business improvement, and the team you gather will set the tone for those crucial first years of your business.
The employees you want to hire should understand the mission of your business. Their business goals should align with those of your business — if you want to disrupt, your employees should be all about disruption. If you want to play it safe, so should your employees. These people will be a part of your team. If you cannot work together, you will have to let them go and hire new employees, and the expenses of employee turnover are not something your business needs early on.
Be Ready to Live and Breathe Your Business
One of the important lessons to learn from CEO is — work more, sleep less. On average, CEOs sleep two hours less than their employees do. They also work eleven hours more every week. Putting in more waking hours in a day and then devoting them to work is the secret of productivity.
If you want your business to have a chance, you will have to follow suit. Actually, you might even need to go beyond what CEOs of big companies are doing. Half of all businesses don’t survive past their fifth birthday. If you don’t want your business to be one of them, you will have to make it the center of your life.
Entering a crowded market is tough. The competition is never easy, and most of the businesses you will compete against started the race before you. Your job as an entrepreneur is to catch up and take them over. Or, if you can do it, you can also change the rules of the race.