“A crowded market means there are lots of buyers sustaining these businesses,” says Tim Prizeman, a business adviser and founder of PR agency Kelso Consulting. “The key question is: ‘How are you going to pinch these customers from their current preferred supplier and/or create new customers?’ ”

According to business expert Erica Wolfe-Murray, who helps companies in the creative, cultural and tech sector to innovate, a large part of the answer is to do things differently.

“Healthy competition inspires innovation, cost and material efficiencies, new approaches and thinking,” she says.

“Coming into a marketplace with no legacy and a fresh attitude can make a big impact on incumbent traders.”

You can also learn valuable lessons from your competitors.

“They’ll show you what works and what doesn’t, what customers are open to and what they have an appetite for,” says Grace Fodor, founder and CEO of pro-age make-up brand Studio 10. “In essence, competitors ensure that you strive for success, that your business operates as efficiently as possible, quality remains high and that your offering is exactly where it needs to be.”

“Regardless of the industry, brands and businesses should never underestimate a challenger,” says Fodor. “They’re often armed with the very latest social media know-how, new technologies, low overheads and direct-to-customer business models and can really can make their mark quickly.”

In contrast, well-established competitors may have legacy investments, set ways of doing things and an unwillingness to change. “This allows a new entrant to spot important trends and exploit them,” says Prizeman.

New technologies, or innovative use of existing technologies, can open doors, especially when combined with a keen eye for societal trends. Roofing Megastore, for example, broke into a seemingly saturated market through innovative use of e-commerce that capitalised on a rise in young homebuyers and a growing DIY trend.

Rather than relying on tradespeople to source roofing materials, Roofing Megastore set out to empower homeowners to do it themselves, simplifying the process so they could buy products online with confidence.

“The first major innovation we made was our roofing calculators,” says MD Gian-Carlo Grossi. “They help you calculate the materials required for both simple and complex roofing projects with only a few measurements, overcoming the need for a tradesperson and removing the apprehension felt by many homeowners.

“Soon after, we began to change the tone of our sector, moving away from the complex language of tradespeople and focusing on simple language throughout our marketing materials. Suddenly, homeowners felt as at ease as they are when buying clothes or electricals.”

Roofing Megastore now offers over 30,000 products to homeowners and tradespeople. In 2019, it grew its customer base by 55% and its revenue by 75%. A key factor in its success has been its ability to broaden the market by selling direct to homeowners.

“We believed that new initiatives for first-time buyers would create a younger customer base,” says Grossi. “We also believed that uncertainty in the economy would result in more homeowners choosing to invest in their existing property rather than move home.”

Deyan Dimitrov launched on-demand laundry service Laundryheap in 2014 after a stressful experience trying and failing to get to a dry cleaner in time before it closed. Recognising the growing demand for home delivery and collection, he decided to create an app that would make dry cleaning more convenient, with a key selling point being guaranteed turnaround within 24 hours.

“Aligning with modern consumer expectations and then delivering on your promises are both vital,” he says.

Dimitrov bootstrapped his business into profitability before raising £2m in angel funding, and in 2019 Laundryheap was named Deloitte's 18th fastest-growing tech company in the UK.

“My most valuable tip would be to find something your competitors would have trouble emulating,” he says. “This could be a personal touch, a focus on sustainability, or a different price point. Additionally, don’t be scared by competition. We don’t live in a monopoly market and there is space for more than one offering at a time.”

The successes of Dimitrov and Grossi show that even when a market looks overcrowded, it can contain untapped opportunities. Similarly, Fodor found success by spotting that within the competitive beauty industry, the needs of older women were not being met.

Grossi says: “I’ve spent most of my career working in the beauty industry and realised, as I hit my 40s, that the products pitched at me were simply dressed-up versions of mainstream products. They just didn’t work for mature skins.”

She believes that the success of her business comes from its distinct offering and identity.

“Be clear about your point of difference,” she says. “Whether it’s a product format, brand personality, service experience, delivery channel or all four – be creative, fresh and distinctive, so that customers can’t help but sit up and take notice.”

Celia Gaze, author of the book Why Put a Bow Tie On A Llama?, achieved this in a novel way. She transformed a neglected hill farm in Bolton, Lancashire, into an award-winning wedding and events venue, partly by photographing one of the farm’s llamas in a bow tie and using the pictures in its marketing efforts.

“The wedding venue industry is incredibly competitive,” she says. “My way of standing out was the bow-tie-wearing llamas and also studying industry trends: I made the decision to focus on well-being, sustainability and llamas 10 years ago, when these areas were barely mentioned.”

Ultimately, it’s your unique offering, and your ability to communicate it, that will drive your success.

“You need to identify your equivalent of a bow tie on a llama,” says Gaze.

1. Identify the weaknesses of your competition: “In our case, the competition had made little effort in simplifying a complex product,” says Grossi.
2. Examine how consumers are changing: “Offer a product/service that the market will be needing in the future, not what everyone is supplying now,” says Wolf-Murray.
3. Think outside the box. “Look to other industries for new ways of working you could adapt,” says Wolf-Murray.
4. Find out what your USP is and push it to the forefront of your offering: “Think about how you’re going to communicate that added value: if you can’t explain your business in a few snappy words, customers will lose interest,” says Dimitrov.
5. If you are a B2B business, work out how you will have credibility and de-risk your offering: “This could be through securing a couple of pioneer clients well in advance, having a wealthy big-brand backer or by getting a credible industry figure on the advisory board,” says Prizeman.
6. Get your service absolutely right: “Make experiencing your product and brand as simple as possible,” says Fodor. “Even better, make your customers’ lives simpler if you can.”
7. Focus on building a profitable business from day one: “It's easy to get caught up in the idea of focusing on revenue and worrying about profitability in five years. However, I've seen few businesses succeed with this mentality,” says Grossi.