Editor's Note: Welcome to the first of a six-column series offering advice for beginning entrepreneurs. IU sophomore David Weisburd is the co-founder of Indy Tickets Express LLC, a ticket broker network that connects ticket brokers throughout the United States and Canada. Since the company's reconstruction in May 2005, Indy Tickets Express LLC has grossed more than $190,000 in revenue.\nHe has started multiple companies in the last seven years, including companies in the travel, jewelry and gaming industries. Visit www.davidweisburd.com for more information about Weisburd and his company.
The late, great commentator Earl Nightingale used to say, "Everything begins with an idea." In the same way, every great business begins with a great idea. \nSo what really makes an idea great? The only way a new business can be successful is if it is able to differentiate itself from other businesses. The more positively differentiated the business, the greater chance it has at success.\nDifferentiation is a competitive advantage that one business has over another. This advantage can be price, quality, exclusivity or customer service. If you can hit all four of these advantages, you will be half way there. \nThis means, don't try to open another burrito place in Bloomington that is similar in price, quality, exclusivity and customer service to Chipotle or Laughing Planet Café. Regardless of how enthusiastic and dedicated you are to this business, it will ultimately fail. \nLet's examine the four different competitive advantages: price, quality, exclusivity and customer service.\nPrice and quality are two advantages that are closely related and self-explanatory. The key is raising the quality and lowering the price at the same time. It's easier said than done, but it's possible. \nSouthwest Airlines -- one of the only airlines still making a profit -- has been doing this for decades. With innovative strategies such as getting rid of assigned seating, it determined where other companies in the industry were inefficient and took advantage of it.\nSometimes it's impossible to lower the price and still have a high quality (or vice versa). In this case, pick your battle. It is better to lean toward one extreme than to try and be everything to everyone. Leaning to an extreme creates a niche with which people can associate your business.\nRemember the last time someone said, "Let's go to Taco Bell; it's so cheap"? Most people know Taco Bell uses grade-D meat, one grade below McDonald's, yet they still choose to eat there. The consumer is more educated than many business owners give them credit for. They understand exactly what they are paying for. \nExclusivity is a very powerful advantage. Imagine if there was only one Rolex distributor in the world. The distributor would be able to charge whatever it wished and by lack of other options for consumers, would still get plenty of business. Exclusivity doesn't mean having a unique product per se. It can also mean making a variation to a certain product. \nThis variation can be drastic or very simple. For example, a gift basket company that allows parents to send goodies to their college freshman in time for finals is a small variation of the gift basket service. \nFor my company, Indy Tickets Express LLC, we used a variation overlooked by most people in the industry. We favored suppliers that had unusual ticket quantities, such as three-packs and five-packs. When a customer wanted to take four friends to a game, there would only be a few brokers in the entire world that could offer five-packs to a particular event. Combined with our price advantage, we usually got the sale.\nCustomer service becomes a factor only when you're competing with a business that is toe-to-toe with you on the first three qualities. It can make or break customer relationships. My advice is to always be considerate with customers and always try to educate them. A customer that is patronized and not treated like an equal will never come back. Unless, of course, you have great prices, quality and exclusivity. \nComing next week: Becoming an "E-bay-preneur"
