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How to Start a Business in a Competitive Industry

Bennett Conlin
Bennett Conlin

Start locally to break into the most competitive fields.

  • To break into a competitive industry, entrepreneurs should start at the local level.
  • Partnering with local organizations can help your small business build a better brand.
  • Succeeding in a competitive industry requires industry knowledge.

Breaking into the food industry isn't an easy task for a small business. While specialty restaurants and food trucks may find ways to captivate a local audience, creating a packaged dish and trying to put that on shelves at local stores can be an even tougher challenge. Pozole to the People successfully broke into a competitive industry by committing to its mission and focusing on local efforts. 

By starting local, building connections and knowing the food industry, the company has put its pozole in local stores and built a loyal following. Breaking into a competitive industry isn't easy, but Pozole to the People found the recipe for success.

1. Find a market need.

Born and raised in Hawaii, Pozole to the People founder Chris Bailey grew up with pozole in his diet. Pozole means "hominy" and is made from hominy to create a soup or stew, traditionally with a variety of vegetables. Many people also add meat to the dish.

As Bailey saw some of his vegan and vegetarian friends avoid pozole at Mexican restaurants because of the regularity of meat in the dish, he saw a need in the market. A business idea was born. He decided to make a pozole base that didn't require consumers to eat the dish with meat. He created a meal starter base that is gluten-free and doesn't include meat. Customers can certainly add meat, but anyone can use this pozole, regardless of dietary restrictions.

If you want to break into a competitive industry, you must find a need in that market. Bailey saw that certain customers were being excluded from eating pozole due to dietary preferences and regulations. He was also knowledgeable about the product. It's incredibly difficult, if not impossible, to create a successful product or service in a competitive industry if you lack knowledge of that industry. Bailey grew up eating pozole and understood what it took to create a delicious product that would serve the needs of his client base.

Some entrepreneurs fall into the trap of jumping into an industry without knowing much about it. This can work in some cases, but trying to join a competitive industry without experience in that field is often a failure waiting to happen. If you lack knowledge of an industry but still want to enter that field, take the time to research the industry and build your knowledge base before launching your business.

2. Start local.

Pozole to the People, which is based in Oregon, chose its location based on the many people on the West Coast who are familiar with pozole. Bailey wanted to choose a health-conscious region where his product could build a name for itself in the market. For consumers who aren't familiar with pozole, the company offers live demos and several recipes on its website to educate local consumers.

Bailey also focuses his efforts on local stores. He wants to build his brand before making a national push. If you enter a competitive industry, focus on the niche areas first. Whether that's a region or customer base, you will have a better chance of success if you narrow down your target market and focus locally.

"We're a very community-minded company," Bailey said. "We want this to be a product that serves the community. I believe there will be a day where it expands throughout the country and beyond, but I think, for now, I'm definitely enjoying the ride that we're on."

Building a community-focused company is a tremendous way to start out a competitive industry. Bailey holds live demos and uses local ingredients to help engage the local community on multiple levels. Small businesses need to get community support to succeed and eventually grow. Starting a business in a competitive industry and expecting to immediately compete with major brands is unrealistic. Start small to eventually become big.

3. Partner with other local organizations.

An area where Pozole to the People excels is connecting with other local businesses in the Northwest. Instead of viewing other businesses in the area as potential competitors, Bailey's company embraces other local businesses and tries to connect with them whenever possible.

He also mentioned the importance of connecting with businesses that hold similar values. In Bailey's case, he wants his company to work with businesses that value the community and are committed to using the healthiest ingredients on the market. This helps him play to his company's competitive advantage, which is offering a healthy pozole base for all consumers. His fresh, locally sourced ingredients are a key competitive advantage.

"It's incredibly important, especially in Portland and in the Northwest," Bailey said. "I think people are really conscious of what's being made locally. I think it just adds to the credibility."

Bailey's strategy of using local businesses to help his business, rather than viewing them as competition, improves his company. Don't shy away from connecting with other small business owners in your local area just because others might view them as your competition. As Pozole to the People shows, some businesses thrive when utilizing the help of other small business owners. 

4. Live in your industry.

Bailey works at Portland Mercado, helping with microenterprise development of small food businesses in Portland, as his day job. This means Bailey is living and breathing the food industry. He's constantly immersed in local food businesses, which helps him find some of the best companies to partner with in the market.

"From that, I just happen to find myself in conversation with the greater food scene locally," Bailey said. "It just leads to being able to meet and network."

While you don't need to work a different job in your field, you should find ways to remain immersed in your industry. If you're creating a sports gambling startup, you should be aware of the state-by-state legislation changes regarding sports betting. If you work in the cannabis industry, regulations and consumer guidelines are critical to follow. Regardless of what industry you're in, it's vital to know the trends of the field. Your awareness of what's happening in your industry will set your business up for success.

It's also important to monitor local trends and changes. The food industry in Portland differs from the food industry in Oklahoma. A product that finds tremendous success in rural towns in the Midwest might struggle in New York City. Be aware of the differences in local markets.  

5. Cover business basics.

When starting a business in a competitive industry, you need to focus on the business basics as well. That means writing a business plan, creating financial projections, performing a competitor analysis and understanding your target market. Craft a marketing strategy, consider which social media channels you'll use and how you'll engage potential customers in your area. [Read related article: The Dos and Don'ts of Writing a Business Plan]

While connecting with local businesses and other small business owners is an important part of succeeding in a competitive industry, it's also crucial to cover the basics of starting a business. The best entrepreneurs create solid plans of attack and then adjust to the many challenges they face.

Starting a business in a competitive industry requires solid strategy before, during and after the business's launch. If you cover the basics like a business plan, your small business will be better equipped to follow the road map Pozole to the People has shown to work.

Image Credit: Photo courtesy of Chris Bailey
Bennett Conlin
Bennett Conlin Member
Bennett is a B2B editorial assistant based in New York City. He graduated from James Madison University in 2018 with a degree in business management. During his time in Harrisonburg he worked extensively with The Breeze, JMU’s student-run newspaper. Bennett also worked at the Shenandoah Valley SBDC, where he helped small businesses with a variety of needs ranging from social media marketing to business plan writing.