Los Angeles, CA (PRWEB) March 17, 2012
According to expert entrepreneurial advisor Dave Lavinsky, when starting a business, entrepreneurs should choose a space where the field is level; meaning entering a market where there is fair chance of winning.
But Lavinsky states that after a business has matured, it is time to "unlevel the playing field."
"What I mean by unleveling the playing field is to make it so that nobody wants to compete against you. I want you to have an unfair advantage (using ethical tactics of course) so that you win the game," says Lavinksy, President and co-founder of Growthink, a leading entrepreneurial consulting firm that has helped thousands of entrepreneurs devise powerful business plans.
According to Lavinsky, one of the best ways to unlevel the playing field is to create organizational assets that competitors don't have.
Lavinsky gives five examples of organizational assets that a business can build:
Lavinsky believes that customer agreements and contracts are one of the most powerful organizational assets that a business can have.
"Most mobile phone companies offer 2 year service contracts that all new customers must sign. This essentially "locks up" customers making it harder for new entrants (or existing entrants) to come in the market and take their customers from them. Customer agreements and contracts are one of the most powerful organizational assets you can build," says Lavinsky.
Referring to the importance of building assets of customized systems, Lavinsky says "Most franchise organizations have made significant investments in systems such as systems to serve customers, produce products, handle customer complaints, etc. These systems make it easier and less expensive to hire and train employees and better service customers, making it harder for others to compete against them. Likewise, I know many companies who have built customized software systems that allow them to perform faster, cheaper, and more consistently than their competitors."
3. PPE (Plant, Property and Equipment)
"When I was a teenager, I made a lot of money shoveling snow. I used that money to buy a snow blowing machine. Equipped with the snow blowing machine, I was able to remove snow ten times faster than my competitors. This allowed me to dominate the market," said Lavinsky.
4. Product or Service Variations
According to Lavinsky, a variety of different products and services is a very powerful business strategy.
"A local pizza shop promotes itself as having 36 varieties of pizza. Offering this large variety makes it harder for new pizza companies to enter the market. Because a new company would have a very hard time creating 36 varieties from the start, it would be harder for them to satisfy customers."
In order to hep eliminate competition, Lavinsky advises leveraging powerful partnerships with major organizations.
"I've created several partnerships with major websites and organization to be the only business plan provider they promote. This excludes my competitors from working with those organizations and serving their customers," Lavinsky says.
Lavinsky advises entrepreneurs to consider how they can build organizational assets that unlevel the playing field so that other businesses will not want to compete. Lavinsky recommends asking questions such as:
- Can you lock-up customers with agreements and contracts?
- Can you build new systems to make your company more effective and efficient?
- Can you make investments in plant, property and equipment that allow you to cut costs or increase output?
- Can you develop new product and/or service options that better serve customer needs?
- Can you form exclusive partnerships to help you gain new customers that your competitors can't?
Lavinsky advises entrepreneurs to have patience when building their own assets, and focus on the long-term goal.
"Whatever answers you come up with, realize that building these organizational assets will take time. Often times they may take as much as a year (or even longer). So make sure to properly plan their development. Set a long-term goal for when you want the asset built. And make sure that you build time into your daily, weekly and monthly schedules to move the development forward," Lavinsky says.
Growthink, Inc. is a leading provider of entrepreneurial consulting services, including business plan development and marketing research. Growthink has also developed several training products and tools for entrepreneurs, including a business plan template and a PPM template. To learn more about Growthink's products and services, call 800-506-5728.