Setting up a business in a highly competitive industry
Starting any business from scratch is a big challenge. The sheer number of tasks you need to complete before you even begin running the day to day operation is daunting for many. Starting a business in an industry which is already highly competitive, where you have the pressure of experienced competitors alongside all those tasks, is hugely challenging.
One highly competitive industry, and yet is always popular and seeing new businesses start, is the beauty and cosmetics industry. In cities across the world, countless businesses offer treatments and procedures which all contribute to the beauty industry being valued at $532 billion by retail analytics firm Edited last year. While the COVID-19 pandemic will have impacted that valuation, in the same way other industries will have been affected, this is still an incredibly valuable industry.
Beauty is an incredibly popular industry which people are incredibly passionate about, and this can lead to lots of people wanting to get involved and work in the industry. To get an idea of what it takes to work in a highly competitive industry and create a successful business, we spoke to Aesthetics Lab cofounder and director Tania Zahoor Rashid. Aesthetics Lab, based in London’s Primrose Hill, started in 2015 and offers a great range of skincare and body treatments.
If you’re starting your business from scratch, there will be lots of things you don’t know. What is essential when entering any industry, particularly one which is highly competitive, is to have a good level of general knowledge. Tania explained that the three founders of Aesthetics Lab all “had some prior knowledge of the industry both from the perspective of a client and from working in the industry.”
If you’re working with business partners, it can make things easier if they have worked in the industry before. This was the case for Aesthetics Lab, and Tania points out “connections within the industry were already somewhat made, and there was a certain network in place already.” This isn’t an option for everyone, but building connections quickly when starting your business can help overcome this.
Unless you have worked extensively in the industry you’re setting up your business in, there will probably be a significant amount left to learn, such as commercial property tax. In highly competitive industries, there will be more to learn because more competitors are offering different things, and the beauty industry is no exception. Tania explained that “the beauty industry is saturated with equipment and products and knowing the technology, active ingredients and how these all work with skin and body to produce results is paramount.” Taking time to research all these areas and understand who you’re competing against is invaluable. “Market research and mystery shopping are important, as long as you do it ethically, there is nothing wrong with doing this research. You get to see what works and what doesn’t for other players in the industry and learn from it,” Tania said.
Outside of the industry-specific knowledge, you will need to understand precisely how running a business works. There are lots of resources available to help you in this area, and it’s vital to understand the behind the scenes side of running a business before you start. In the case of Aesthetics Lab, they spent two years researching and setting up the business before they even opened their doors to clients.
Prioritise and invest in the service you offer
When working in an industry which is crowded and with companies already well established, you need to differentiate yourself from your competitors. This is where your research and industry knowledge will become even more critical, as you can’t offer something different or better to your competitors if you don’t know what they are offering.
Regardless of the industry you operate in, clients are experienced enough to know when they are receiving a quality product or service, so prioritise quality! With the beauty industry, Tania explained that often clinics try to offer one solution to a problem, such as acne, as only offering one option is cheaper to run. To be successful, you need to understand that different people may require different solutions to the same problem so investing in a variety of solutions to meet clients’ needs will mark you out as a business which values its clients. This is always a positive in any industry.
Standing out in the crowd
There are some key areas that haven’t been mentioned so far, which can help your business stand out from the crowd. Firstly, advertising is essential for any business. When competing with established businesses, advertising is crucial. It will take time to find the most effective advertising method for your business. Some of the most common advertising types include online ads, radio and television commercials, newspaper and magazine ads, and direct mail. Additionally, companies can use print material for advertising their businesses to potential customers or at events and trade shows. For printing posters, flyers, and brochures, businesses can contact a printing firm (like this firm that offers poster printing london). Along with that, businesses can also create promotional items, such as t-shirts, mugs, pens, and tote bags with their logo or slogan to increase brand awareness.
According to Tania, Aesthetics Lab “did a lot of research to figure out the options with the most return on investment. It was a challenge but definitely worth doing, and it is very important to track the returns, so you only spend money on the advertising channels that do bring a good return.”
Secondly, you need to consider location. In the time you spend researching the industry and your competitors, it’s vital to look at potential sites for your business in relations to who else operates around you. Tania explained that choosing their location in Primrose Hill was not by coincidence and that being a local monopoly gives them a competitive edge. Once you have established yourself in a location, you can start looking to expand your customer base wider.
Overall, setting up a business in a competitive industry has its pros and cons. As Tania pointed out, “the fact that the market is competitive only means that there is a demand for what is on offer.” This article has focused a lot on the challenges and hopefully providing some advice on how to overcome them, but it’s important to remember if you’re passionate about your business and have done the research you can make it work. “I always advise people to take an informed risk when starting any business,” Tania said, as “there is always an opportunity to improve what is on offer, set higher standards and do well.”