I am so glad I found this site. Within just a couple of hours (spread across 3 days~the wonderful, busy world of motherhood) I have found more information here than in the months I spent looking on google beforehand. I feel so inspired by you all and your tips are wonderful.
I still have a lot of questions about my business. Not sure which section to post them under so I thought I would stick to other home-business folks.
I am looking to start a grocery delivery service. I know, it has been done a million times, but there is a clear need in my area. I really want to do this not just for money but to help the elderly and disabled.
I received advice (not from a business person) that I contact a similar business that is about an hour away from me and ask them for advice. I think it would be a great source of information, but they are an expanding business and I don`t really want to call their attention to the need of this area. Would it be foolish for me to contact them?
Thanks for your responses!
Hi Kate, welcome to Startup Nation (SuN)... :-D
I think what you`re asking is more about the principles of competition,
and the idea of potentail market---is something a niche product, or
more a general product.
Suppose you sell tortoise-shell combs designed to be used by
left-handed people with sparse hair. :-) You take a look at the world,
as well as your local area, and try to determine how many people would
need/want your particular product. In this instance, say there are
1,000 people world-wide who would potentially have a need for the combs.
If there`s another company, already in business, and they`re selling
the same item, then very quickly the two of you would capture 100% of
the market. Since they`re already in business and you`re lagging
behind, the odds are they`d take the lion`s share of that very limited
market, and you`d be left with not a whole lot.
Now suppose you sell air. :-D Your market is every living person on the
planet, which not only is 6-billion, but is growing. Even at a million
transactions per day, you`d never be able to keep up with the demand.
As such, the more competitors selling the same product, the easier it
would be on you in terms of business operations.
So what it comes down to is to first determine your potential market in
your area. What`s the possible maximum number of customers who *might*
want to avail themselves of your service. If it`s, say, 1,000 and this
other company is already capturing 500 of them, then you`d likely have
an uphill struggle.
But if the possible market is much larger, and this other business only
has a small share, that leaves a wide-open field. If that`s the case,
the next issue would be how strained are this other company`s
operations? Are they struggling to keep up? If so, they might be
comfortable talking about having a competitor.
A whole different approach would be to "segment" the market, in that
they might handle non-perishable, and you handle perishable goods (or
the other way around).
Yet another approach would be to create operational divisions. They
might handle the order-taking and boxing, you might handle the
transportation and deliveries. Remember, there`s a big headache in
keeping reliable delivery personnel in this type of business, and they
might want to offload (outsource) the HR side of things to someone else.
In any event, it comes down to how comfortable this other business
owner is with regard to "giving away business secrets," so to speak. In
a limited market, competition goes in the normal way, and you would
compete on price, efficiency, speed, convenience, choice-selection, and
so forth. Or you might compete by just doing a better job of being
visible and known.
Thank you so much for your thoughtful response!
I hadn`t really thought of market-share in those terms before.
I believe it is a small business and that they are far enough away that it would take significant planning for them to reach out to this area.
I also feel like the experiences she may have already had in developing her company are invaluable. I`m working with a tiny budget and any serious mistake on my part could be the end of my dream, financially speaking.
Seeing the situation in this new light, I feel like it is worth the risk to contact her. I suppose she is not unaware that this need exists in my area. I am sure it exists everywhere.
Thank you Craig!
Thank you both very much.
I don`t have much in the way of resources to start this business so I know I need every bit of knowledge I can borrow to avoid business-killing mistakes.
I contacted the owner of this business this morning via email. I have not heard back yet, but I will let you all know how things turn out!
Thanks again! You have all really helped me.
Hello! I`m new to StartupNation so please bear with me. I am very impressed with all the info. & kindness this site & people have to offer, so it may be of no surprise that I will be asking alot of stupid questions here, but I have to start somewhere you know. So here goes...How does one find out if a company/business is legit on Google, & are there any trustworthy review sites or government sites? The BBB & the Online Business Bureau just do not seem to be of any help at all. Sometimes it can be hard when you do`nt know what you do`nt know, you know! Any information would be very appreciated. Thankyou for your time & consideration.