If you’re working on a start-up or have an established company, there will come a time when you’ll need to evaluate your competitors. There are three components to a good competitive analysis: (1) defining the metrics and identifying the competitors you’re comparing, (2) gathering the data, and (3) the analysis.

[NOTE: This post is a shorter version of a post I wrote for my personal blog last week. You can read the longer post - which goes into much more detail about evaluating your competitors when doing competitive analysis and compares TechCruch and Mashable to illustrate each of the tips].

How do you begin? What are the relevant factors that you should be comparing? And what conclusions can/should you draw from the data? Below, I offer 10 tips (from my own experience) for evaluating your competitors. Remember that this post isn’t intended to be the complete guide to competitive analysis – I wanted to share a bit of what I’ve learned and to help you build a foundation.

1. Define WHAT metrics are important. Before you start looking at data, you must understand what metrics are important. Are you interested in comparing revenues? Unique visitors? Total visits? Traffic rank? Pick a set of metrics that are important to you and measure the data based on those metrics. If you pick the wrong metrics, you can still make a competitive analysis – but it will not be particularly meaningful to you. Don’t worry if you’re not sure whether you’ve defined all of the relevant metrics. As you start looking at the data, you’ll no doubt see other good comparisons.

2. Look at recent trends. Recent trends are important because they paint a picture of what’s happening now. This is particularly important if your start-up is brand new – since you won’t have any historical data for comparison. Use a tool like http://www.compete.com for this comparison.

3. Evaluate historical trends. Historical trends are important because they help you to understand not only the speed of growth but also to see if the same events impact both entities equally. For example, if two competitors are in the same industry you might see complementary growth spurts and down spurts. If there are down spurts, you’ll most likely want to understand the causes of the dips. Were the dips caused by external events unique to the entity you’re evaluating, or something else that should have impacted everyone? Were the events one time events (such as a hurricane) or annual events (such as the holidays in December).

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