Hi everyone! I’ve just filed my first LLC & am planning to open a vintage boutique in my city- I’m completely new to owning a legitimate business of my own. I thought this would be a great question to ask as I know I’ll be making many mistakes in my first year of business.
Please feel free to comment your favorite mistake!
Don’t assume the way competition does things is actually sensible.
There’s a tendency to think “oh well if they do it that way, there must be a good reason.”
Sometimes yes. Often no.
My own example: my business is a small niche and there was one other business in town like us. They did a TON of stuff in dumb and inefficient ways. We knew this. But we assumed some things that seemed sensible were in fact sensible. Nope, often not.
In particular, they offered a refund on a service that we assumed everyone did. It ended up being $30k - 10% of our first year’s revenue. And this was after delivery of service, with no costs associated with delivering the refund or not. So it came right out of our profit, basically.
Turned out nobody but our one local competitor did this. We were cutting checks to clients they didn’t expect and they just kept quiet. Until one client said how unexpected it was and we did more research.
Fun times.
The lesson there was to challenge assumptions and do your research. If it’s an industry standard, you’ll figure it out.
I loveeeee this. That’s so helpful because there are a lot of businesses out here that are similar to my idea and they are constantly making interesting moves.
My business is literally in market research, so I can attest: there is a LOT of guessing going on. A lot lot.
This isn’t to say you can’t learn from competitors. You absolutely can. Just don’t assume they know any better than you!
Also: if the company sucks, you really do need to take everything with a grain of salt. If they seem to do this one cool thing, but their reputation is garbage…well that one cool thing, in practice, might be garbage too. Doesn’t mean it is, but approach crappy competitors with extreme skepticism about every single thing they do.
THANK YOU! People think I’m crazy to be so cautious but I’ve learned it’s better that way.
And if I may ask you a question- what’s the best way to go about market research for retail? If you don’t mind I’d like to send you a message with more detail!
Yeah sure, message away!