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In most situations, the business with the highest potential strategic advantage is going to be the business that requires the most capital or involves the most risk of failure. For example, in Table 2-1 earlier in this chapter, the business with the highest number of yeses in the strategic column is the toddler safety business. This business has the advantages of being a new idea, and something that clearly adds value for customers, but involves fairly substantial risks. Because this is a new service, people aren’t going to look around thinking to hire someone to make their home toddler-proof. This business will have to invest significantly in marketing to make consumers aware of its services and may yet find that demand is so weak that the business idea is unsustainable.

In contrast, lawn mowing has few potential strategic advantages but probably the lowest risk of all. (The cost for Leila to set up her business could be as low as placing an ad on Facebook Marketplace.) The reason that strategic advantages are hard to find for Leila’s business is that a lawn is only ever a lawn, and Leila is limited in what she can offer that others can’t.

However, I still include ‘maybe’ against three possible strategic advantages for Leila’s lawn mowing business:

 Added value: Maybe Leila has some specialist horticultural knowledge that could differentiate her from her competitors.

 Location: Maybe Leila would be providing the only service in her suburb, or maybe she lives in a very exclusive suburb with lots of high-income earners.

 Lower costs: Maybe Leila’s teenage son works for her at low hourly rates, enabling Leila to afford very competitive prices.

If your business is very similar to many others, you may find it’s tricky to identify strategic advantages and to stand out from your competitors. The upside of a business that’s very similar to many others is that the risks are usually lower; the downside of a low-risk business is that it’s always going to be tricky to charge premium rates or make above-average profits.