How to do a competitor analysis

Almost every business owner spies on the competition, but few do it usefully. Glancing at the shop across the street or stalking their Instagram on a Sunday isn't competitor analysis: it's anxiety dressed up as research. Real analysis is orderly, it feeds decisions, and you can repeat it on a schedule. The good news is you don't need an expensive consultant to do it; you need a method.

The goal isn't to copy whoever's doing best or to obsess over the cheapest one. It's to understand the ground you play on so you can find the gap nobody else is filling. That's what actually moves the needle.

First, decide who to look at

There are two kinds of competitors and it helps not to mix them. Direct ones offer something very similar to yours in your same area: another barbershop three streets over, another neighborhood dentist. Indirect ones solve the same customer need a different way: the at-home haircut app, the relative who 'knows how to cut'.

For a small business, the advice is to analyze three to seven direct competitors in depth. Fewer than three and you miss market signals; more than seven and you drown in data you'll never use. Pick the ones who genuinely take customers from you.

Second, find out what matters

Once you have your list, it's time to gather information, and almost all of it is in plain sight. Nothing shady required.

• Their website and social media: what they offer, how they tell it, how often they post.
• Their prices, if they show them, or the range they move in.
• Their customer reviews: this is pure gold, because they tell you what people love and hate about them.
• How they handle service: how long they take to answer a message, how they treat someone who asks.
• What your own customers say: ask them who else they looked at before choosing you.

Reviews deserve special attention. A repeated complaint about a competitor ('they never answer', 'they're always late') isn't just their weakness: it's an open invitation for you to do the exact opposite and say it out loud.

Third, organize it into a table

All that scattered information is useless until you put it side by side. Build a simple table: one row per competitor and columns for what matters most in your field, like price, response speed, reputation, digital presence, and hours. This is called a competitor matrix and it's the heart of the exercise.

When you put everyone side by side, patterns emerge: who dominates on price, who owns reputation, who's weakest on digital presence, and where the gaps are.

That last point, the gaps, is what you're hunting for. If your table shows all five competitors take hours to reply, you've just found your opportunity without spending a cent on advertising.

Fourth, turn it into decisions

An analysis that ends in a pretty table and nothing else is wasted time. The step that separates the exercise from strategy is asking yourself what you'll do differently based on what you saw. To organize the conclusions, many people use the old reliable SWOT: your strengths and weaknesses against the opportunities and threats the map revealed.

• Adjust your price or offer if you found you're out of market.
• Sharpen your message around what you do well and they do poorly.
• Close your own gaps before a competitor uses them against you.
• Aim at a market gap nobody is filling.

Fifth, make it a habit

The market moves. Prices change, competitors open and close, a new shop arrives swinging. A competitor analysis isn't a photo you take once; it's something you review on a schedule, ideally every quarter. It doesn't have to be long: updating your table over one morning is enough to keep from going blind.

The takeaway is this: look at the competition with method, not fear. Pick a few rivals, find out what truly matters, put it in a table, hunt for the gaps, and decide one thing you'll do differently. Repeat every quarter. That, done consistently, is worth more than any hunch.

Sources

• U.S. Chamber of Commerce — https://www.uschamber.com/co/start/strategy/competitive-analysis-small-business-guide
• Asana — https://asana.com/resources/competitive-analysis-example
• Slideworks — https://slideworks.io/resources/competitive-analysis-framework-and-template
• QuickBooks — https://quickbooks.intuit.com/r/starting-a-business/conduct-competitive-analysis/
• Salesforce — https://www.salesforce.com/blog/what-is-competitor-anaylsis/