Step 2: Know your competitors
Once you’ve decided on what market you’re going to launch your cannabis start-up into, you’ll need to take your competitors into consideration. Although there won’t be many initially, this industry is poised to experience large growth, and growth means competitors.
Before you launch into your new cannabis concept see what everyone else is doing. Do some research on your competitors and explore their businesses. You can analyse what strategies are working for them, and which ones they abandon quickly.
Do your due diligence into what it takes to be successful in the weed business, investigate US or Canadian businesses if there aren’t enough South African examples for you to assess.
Keep in mind that starting a marijuana themed clothing store is vastly different from making and selling glass pipes. You need to find out what makes your specific business tick and what strategies to put into place to ensure its sustainability.
Is your concept still viable?
Understanding your market and who is already competing in it will help you determine if your business idea is viable or not. You don’t want to launch a business in a saturated market, but if you offer something no one else does you can compete against titans of industry.
To find out whether your concept is competitive you’ll need to list your main competitors, and their strengths and weaknesses. You will always have some sort of competition, even if it isn’t direct competition. Keep in mind, you are also competing with companies that your target market would prefer to spend their money with.
The more information you know about your competition the better. Here are a few details about your competition that you should know:
- Location
- Products/services
- Price
- Marketing message
- Website
- Reputation.
Here are a few strategies for gaining knowledge about your competition:
Physically visit your competition: Depending on what sector you’re in, you can most likely visit your competition and even buy from them. While there you can get a price list, listen to their sales pitch and even count the number of cars in their parking lot. You should also make a note of customers coming in and out of the store, both with and without purchases.
Get honest feedback from your competition: Ask customers what they like or dislike about each of your competitors. Ask them why and how do they decide which one to spend at?
Take a look at their adverts: See where your competition is advertising and what they are emphasising in their adverts.
Visit their website: Considering consumers now make purchase decisions before they ever enter a store, you need to know what your competitions websites look like. Do they sell products/services through their website or do they just provide information? What do they emphasise on their site?
While online see what your competitions online presence is, are they profiled in articles? Can you find any press information about them? Have they gone through any recent changes, such as a new store opening or hiring a new CEO?