How to Research Your Competitors

Identify Your Direct Competitors First

Direct competitors sell essentially the same product or service to the same customers you're targeting. List every business you can find that a potential customer would also consider, not just the one or two names that come to mind first; a local search, industry directories, and mapping apps typically surface competitors you'd otherwise miss.

Then Identify Your Indirect Competitors

Per the SBA's competitive analysis approach, indirect competitors solve the same underlying customer problem in a different way, and they can affect a new business just as much as direct competitors do. A meal-kit delivery service competes directly with other meal-kit services, but also indirectly with grocery delivery, restaurants, and simply cooking from scratch. Leaving indirect competitors out of the research understates how much of the customer's attention and budget is already being competed for.

Evaluate Each Competitor on the Same Factors

For each competitor identified, the SBA recommends looking at market share (how large a piece of the market they hold), strengths and weaknesses (what they do well and poorly), pricing, and how they position themselves to customers. Evaluating every competitor against the same short list of factors makes it much easier to compare them side by side and spot where a gap actually exists, rather than forming a vague impression of "a lot of competition" or "not much competition."

Use Free Federal Data for the Broader Picture

Before relying only on what individual competitors show publicly, the SBA points to several free federal sources for sizing up a market: the U.S. Census Bureau for demographics and business classification data, the Bureau of Labor Statistics for employment, wage, and industry trends, the Federal Reserve for consumer credit and interest rate data, and the Bureau of Economic Analysis for GDP and consumer spending figures. These sources won't name your specific competitors, but they frame how large the overall market is and whether it's growing, which affects how much room there is for everyone already competing in it.

Research What Competitors Publish Themselves

A competitor's own website, pricing pages, product listings, and public customer reviews are legitimate, freely available sources, and reviewing them directly is a normal and legal part of competitive research. Look specifically at what they charge, what they include at each price point, how they describe their own strengths, and what customers say in public reviews, both positive and negative, since complaints often point directly at a gap your business could fill.

Reassess Barriers to Entry

The SBA also recommends evaluating barriers to entry: the cost of starting, licensing or regulatory requirements, brand loyalty, and how easily an existing competitor could match a new entrant's prices or features. A market with low barriers to entry is easier to get into, but that also means competitors can follow quickly if your idea works, so weigh both sides before assuming low barriers are purely a positive.

Keep the Research Current

Competitor pricing, offerings, and market share shift over time, so treat this as an ongoing habit rather than a one-time project completed before launch. Revisiting the same factors every few months after opening keeps the comparison useful instead of describing a market that's already moved on.

Don't Copy a Competitor's Pricing Without Understanding Their Costs

A competitor's price reflects their own cost structure, scale, and strategy, which may be very different from yours. Use competitor pricing as one data point among several, including your own actual costs, rather than copying it directly.

A Saturated Market Isn't Automatically a Reason to Walk Away

Many competitors in a space can mean real, proven demand exists, not that there's no room left. What matters more is whether you can identify a specific, defensible difference, whether on price, service, location, or audience, rather than entering with an identical offer.

Watch for Information That Changes Quickly

Pricing, promotions, and inventory can change far more often than a company's general market position, so note the date you gathered any specific figure and plan to recheck it before relying on it for a major decision like setting your own price.

Keep Your Own Research Methods Legal and Ethical

Reviewing public pricing, marketing, and reviews is normal competitive research; misrepresenting yourself to obtain non-public information, or copying a competitor's copyrighted material or trademarked branding, is not. If a specific tactic feels like it's crossing a line, it probably is.

This Is Not Legal or Financial Advice

Competitive research reduces uncertainty but doesn't guarantee an outcome. A mentor through your local Small Business Development Center can help interpret what the research means for your specific plans.