Did you know that, on average, a professional sports team wins around ¾ of their home games?

Ask any sports team if the home-court advantage is real and they will happily confirm it for you, as well as tell you that same advantage can be put to work for your business.

Face the Denver Nuggets on the road, for instance, and they are nothing special. Face off against them at their Mile High stadium and suddenly they’ve got a 5280-foot home-court advantage that you have to overcome.

If a team like the Nuggets can face down the best in the NBA, just on the back of their home-court advantage, there is no reason your business can’t do the same thing.

The evidence for the home-court advantage isn’t just anecdotal either, there is some real science behind it. A recent survey by the prestigious School of Management at Yale University surveyed over thirteen thousand recently incepted businesses and found that business people that started their businesses in areas where they have extensive connections made greater earnings and had a reduced failure rate compared to those who started their business in previously unknown locations.”

On average, the study found that a business operated by someone located in the same area for five years made almost $6,400 more in yearly revenues and was 6% less likely to fold.

In this article, we’ll be looking at how you use your local home-court advantage to help you business flourish.

What Causes the Home-court Advantage?

Before you can turn the home-court advantage into something you can benefit from, the first thing you need to understand, is how it works. For sports fans, there are a lot of different theories on the matter, such as referee bias, crowd size, and even elevation.

For business purposes, we’ll be sticking to the results of the Sorenson and Dahl survey from Yale:

“We speculate that two factors play a role: First, homegrown entrepreneurs know the territory; they understand which products and services their regions need and can spot opportunities,” the survey concluded. “Second, they have connections. Their well-established networks of contacts likely gives them better access to financing and to potential employees and business partners.”

From these conclusions, we can narrow down the roots of the home-court advantage to three factors:

• Knowledge of local territory

• Well-established networks of contacts

• Additional resources

Let’s explore these factors in a little more detail.

Knowledge of Local Territory

If you’ve based your business in a place you are familiar with or have even grown up in, you have a significant advantage when it comes to finding a gap in the market, or an underserved community of potential customers that you can become a product or service provider for.

If you’ve ever so much as walked down your high street and thought “we could really do with an ‘X’ here,” then you are already using that local knowledge to identify business opportunities.

Keep doing that.

As you move around your local area and interact with your community, always be on the lookout for opportunities to provide a product or service that people are crying out for.

Well-established Networks of Contacts

In business, communication is everything, so it’s no surprise that part of the home-court advantage is having a preexisting network of contacts.

Before even starting a business, most people already have a web of local suppliers and know which businesses can be trusted. This gives you a leg up that other businesses don’t have – you don’t have to worry about being let down by unreliable suppliers or forging new business contact because they are already in place.

Don’t be afraid to use the fact that you’re local to push for discounted rates. If you can promise regular business to a smaller supplier, you’ll often find they’ll be able to give you better rates and service than a national supplier who doesn’t value your business as much.

You may also be able to find sources of funding for your startup that are specifically for local businesses, such as local government funding and lending circles.

Additional Resources

When it comes to actually closing a deal or selling a product, doing it on home ground means you can bring all your resources to bear.

You might find yourself making prospective visits to other companies to create sales opportunities, but always try to bring the actual negotiations or presentation back to your home office in order to give yourself the greatest access to your team and resources.

Home-Court Tips

Now that we have established how the home-court advantage works for you, here are some tips to help you maximize it:

• • Make things personal – When someone is visiting your home office, make a special effort to personalize their visit. You have time and resources at your disposal, so use them to make sure that whoever is visiting doesn’t feel like this is just one a long line of generic sales visits.
    If you have a team, make sure they know the visitor’s name and use it. You might even want to use one of those local suppliers we talked about to create something for your guests, such as a personalized gift, agenda, etc.
  • Practice business hospitality – Make sure you guest has a phone and a desk, if possible, waiting for them. Few, if any, of us have the opportunity to go a whole meeting without being interrupted by other business and showing that you understand that creates an immediate bond with a prospective client.
  • Plan for everything – President Dwight D. Eisenhower once said that  “Plans are useless, but planning is indispensable.” Even if things don’t go exactly to plan on the day, the fact that you’ve spent time planning for contingencies means you won’t be caught on the hop and there is a good chance that you can recover without falling apart in front of your guest.
  • Look busy – If you have a team, make sure they look busy. Focussed bustle gives off the impression of success, and people are more comfortable with doing business with people who seem successful.  Even if this is your first client, there is no harm in faking it until you make it.