One of the first pieces of “conventional wisdom” advice for people who are deciding whether to start a business is to analyze the market and find out if there is space for you. For example, if you want to start a coffee shop, chances are your business will have a harder time if you build the new coffee shop on a street that already has three Starbucks and a McDonald’s. This is what we mean by a “saturated market” – just like the ground gets soaked with rain to the point that the water runs off, in a saturated market there is simply no more room to absorb any new entrants.
But here’s something I’ve learned from my own experience in business: a saturated market shouldn’t discourage you from starting a business. Even if your market is competitive, even if there are already a lot of other companies offering the same kind of product or service, even if there are big, powerful “800-pound gorilla” companies standing in your way…well, you should still do your research and look before you leap, but don’t let any of those obstacles stand in your way.
From my experience, no matter how saturated the market might be, if you are determined, creative, hard-working, and offer a really great product or service, you will still get customers. Your business can still succeed even if you are a “98-pound weakling” surrounded by “800-pound gorillas.”
Here are two examples I’ve seen in my own life where a determined upstart can successfully take on the most saturated markets:
Stevenson Fitness: We wrote a CorpNet client profile on Chris Stevenson, founder of Stevenson Fitness – he is one of my favorite clients and a great friend as well. His story is so amazing because not only did he start a successful fitness center as a first-time entrepreneur, but he also managed to start his gym in an area that was already “saturated” with multiple boutique gyms and 2 large corporate chain fitness centers, all competing for the same customers from the same nearby neighborhoods.
Chris Stevenson and Stevenson Fitness have become a huge success story because of Chris’s determination, his passion for the business, and the amazing friendly, approachable personality of him and his entire staff. He is creating a one-of-a-kind culture at his company that defies people’s expectations of what a fitness center can be. There’s no snootiness or intimidation or pretentiousness at Stevenson Fitness; instead, he offers a great range of classes, services and personal fitness training, top-caliber facilities and competitive prices – and he’s doing this better than anyone else.
Not only was Chris competing in a saturated market, but he also started a business during one of the lowest points of the recession. And he was contending against huge chains with deep pockets and big advertising budgets. And yet, despite what many people would have thought was a crazy move, he succeeded! And he’s still succeeding – his company continues to grow because customers love what Chris’s company gives them.
CorpNet: Sorry for the shameless plug, but it’s true – my own business, CorpNet, is succeeding in a saturated market for online incorporation services. When my husband Phil and I started our first online incorporation business back in 1997, the Internet as we know it today barely existed. We started with a one-page website, and we were literally the very first people in America to try setting up a website to help people incorporate a business online. Fast forward to 2009 when we decided to start CorpNet after a few years away from the online incorporation world, and the picture had become drastically different – today there are many competitors in this market, and some “800-pound gorillas” with national name recognition and big budgets for advertising.
And yet, we are succeeding. Even though we’re smaller than the big companies, we are able to offer something that the big companies cannot: we focus exclusively on helping people start a business (and deal with other business filings throughout a company’s life cycle), and we offer a much more involved level of customer service to help new entrepreneurs figure out the right way to incorporate a business – whether it’s by forming an LLC, an S-Corporation or other business structure.
Literally, I am on the phone for several hours each day, along with my team, talking with business owners as part of our Free Business Consultation. I love working with entrepreneurs and helping them start a business, and hopefully it shows! Our customers love what we do and they tend to hire us again and again for repeat business, every time they need to complete a new filing for tax or regulatory compliance purposes. So we must be doing something right!
The point is, you don’t need to be afraid of venturing into a saturated market. If your business has a solid plan and a strong competitive advantage – if you know why people should want to buy from you, and you know how to convey that message in words and actions – you are bound to find customers who will love buying from you.