Day 6

Create and strengthen barriers!

 

Barriers to entry prevent or deter potential competitors from getting in to your market (your ‘patch’ if you like). So, by creating and strengthening those barriers you’re protecting your business from direct competition and probably helping to secure higher margins and, interestingly, you’re also helping create a situation in which, should another company really want to get in there, on ‘your patch’, the strong barriers to entry could mean that the only or easiest way for them to gain entry is by – yes, you’ve guessed it – buying you!

Licenses and patents are examples of entry barriers – so the more protection you can get in terms of regulatory approval, the better. Other entry barriers include customer loyalty and switching costs; the harder it’s going to be for a competitor or new entrant to take away your customers, the more likely it is that the only way they’ll get access to them is by buying you.