There are many reasons the NCAA March Madness tournament is heavily featured in the news and on television screens across the country. It’s exciting to watch and follow the 68 college basketball teams battle and try to eliminate their competition over the three weeks of the tournament. Even fair-weather college sports fans get into the matchups (your employees probably have a bracket pool going). I know in my house, the games are on constantly.
Probably the most exciting part of the matchups is seeing how the lesser-known schools do against the big guys that are favored to win (yes, the old “David vs. Goliath” story). There’s something inside all of us that roots for the Davids in the tournament—and when a David does beat a Goliath, it’s pure magic.
That magic happened this year as the No. 16 seed, the University of Maryland, Baltimore County Retrievers, (the 68th-ranked and last team in the tournament) beat the No. 1 seed, the University of Virginia Cavaliers, in a huge upset. It’s the first time in the history of the tournament that a No. 16 seed has bested a No. 1 seed—much less a No. 1 overall seed.
The next time your small business comes up against one of the giants in your industry, winning might seem insurmountable. But as UMBC’s example shows, you can beat the big guys. How? By taking a few lessons from the UMBC Retrievers and March Madness 2018.
Lesson 1: Do Your Homework
In order for the No. 16 seed to beat the No. 1 seed, it started with the team’s coaches. UMBC coaches studied the Virginia team’s propensities on video and came up with the perfect game plan to beat the Cavaliers. UMBC coaches also looked for weaknesses in their own team—places where Virginia could exploit UMBC’s vulnerabilities—and avoided those strategies on game day. Virginia, however, disregarded UMBC’s strengths and failed to adjust, resulting in disaster for the Cavaliers. Bottom line: The bigger team just showed up. The smaller team prepared.
In business, resting on your laurels is never a good idea. At any time, the market could change, you could lose a high-paying customer, or a competitor could swoop in and steal your business. Small business owners, in particular, need to prepare for change and be vigilant about competition. Continually assess your competition locally, nationally and globally. Create a “SWOT” analysis of your competition’s strengths, weaknesses, and the opportunities for and threats to your business.
Some ways to keep an eye on competitors are:
- Follow the competition on social media. How many followers do they have? What kinds of things do they post and what kinds of reactions do they get? Where do their links land on their website? Be sure to link to similar groups and companies and investigate whether your competition does any paid posts or ads on social media.
- Sign up for newsletters and marketing material from competing companies. You want to make sure you are on the mailing list for any promotions or company news so you know what kinds of initiatives, events, and changes are going on within your competitors’ companies.
- Set up Google alerts. You probably already have Google alerts about your own business sent to your email, but you should have similar alerts set up for your competition. Set alerts not only for company names, but also for the names of the principals of the competition, and key industry terms.
Lesson 2: Strategize for Success
UMBC planned for success and it worked. When you’re starting a new business, do you really need a business plan? Most entrepreneurs are so excited about the prospect of being their own bosses, the last thing they want to do is a sit-down and spend weeks or months crafting a business plan.
However, in today’s highly competitive business market, where your fiercest competition could be down the street or around the world, going in with a well-researched strategy is your best defense against failure. Think about your key competitors, and what threats and opportunities they present for your business. Also consider trends in your industry, your local community, and the national marketplace. How might these affect your business in the future, and how will you respond?
To really create a good business plan, you have to think about how you’ll handle every aspect of your business—marketing, managing, financing, and more. The biggest advantage a business plan provides is helping you spot problems before they happen—and before you waste money. Likewise, a business plan can help prevent you from missing a great opportunity. You may not be actively seeking financing now, but if an investor expressed interest in your company tomorrow, are you ready to hand them your business plan and share the vision for your company? The same goes for potential business partners and alliances.
Writing a business plan isn’t the tedious, time-consuming effort it used to be, either. A quick search online and you’ll find plenty of free downloadable templates or you can make an appointment with the experts at SCORE to walk you through drafting your business plan.
Lesson 3: Protect Your Vulnerabilities
Virginia’s defense-first style and its 31-2 record should have made its invulnerability against a No. 16 seed a given. But that wasn’t the case. Instead, UMBC chipped away at Virginia’s defense by making shots fast and furious throughout the game, never slowing down, even after they got the lead.
Besides strong competition, a small business’s vulnerabilities range from cyber attacks to asset liability to trademark infringement. Luckily, protection for your small business is available in many forms, starting with the business structure you choose. Setting up your business as a Limited Liability Company (LLC) combines some elements of a corporation and some elements of a partnership/sole proprietorship. The LLC is not considered a corporation but does offer some of the protections a corporation provides. Specifically, the LLC formation process protects owners and shareholders from personal liability in case of judgment or debt against the LLC.
Forming a corporation means the company is a completely separate entity with a life of its own and gives its owners and shareholders strong liability protection. Plus, because the corporation is a separate entity, the profits and losses for the corporation are retained in the corporation. That means unless you or shareholders receive dividends, you will not be taxed on the company’s income.
The world was stunned by UMBC’s surprise upset. If you want your small business to make history, too, take a lesson from the Retriever’s approach to winning.