The way I see it, competitors are everywhere. Whether you’re a startup owner or veteran, you need to know how to deal with competitors in business.
After being a business owner for over 30 years, I’ve learned how to handle the competition. I know first hand how important it is to pay attention to businesses in your industry but also to not make them your priority.
You don’t want to be completely oblivious to your competition. You should put your energy into your own entrepreneurial tasks above all else.
Why you shouldn’t ignore the competition
Ever hear the saying, Never underestimate your opponent? The same holds true for business.
I have a general idea of where my competitors are, where they’re going, and how fast they’re going to get there. Other than that, I don’t lose sleep over them.
At my current company, Patriot Software, I try not to worry too much about having competitors in the online accounting and payroll software space. It took me awhile to find a balance between turning a deaf ear to the competition and focusing too much on them.
In the 1990’s, I had been in business a few years and was getting the hang of entrepreneurship. The “ignore the competition” philosophy nearly cost me my business. Back then, when the internet was getting popular, my recruiting solutions company began to dominate its niche market.
But, a one-man shop created a product similar to mine. He built a graphical-looking system that used icons and visuals instead of a text-based interface like my software.
I ignored my new competitor because I felt my software was technically stronger. I thought the market would reward me for a “deeper” product, even though his system had a better appearance.
I was wrong. My customers liked his product’s new look over my product’s outdated interface. I began losing customers to the competitor I’d underestimated. That can be the nature of competition in business.
I sounded the alarm within my company. We needed a strategy to compete with competitors. I asked the best minds to help me dissect what my competitor was doing right and what we were doing wrong. We put a new look on our software, which stopped our customers from leaving. Selling my competition short caused me unnecessary headaches and unexpected changes to my product.
The same concept can apply to your small business. Take notice of what other businesses in your industry are up to. You want to be able to react to new competitors with better products and service quickly. You can stay at the top of your game by keeping up with your industry’s trends.
Facing the competition
Sometimes, talking with the competition helps you. You need to know your competition, so don’t be afraid to reach out to other business owners in your industry. Be courteous, even if the competition is not. If you’re like me, you might even gain some friends out of a healthy rivalry.
As I began my second startup company in 1988, I introduced myself to the two major competitors in the market. I wanted to understand the industry I was getting into. One business was 20 years old, and the other had been around for a whopping 40 years!
My business was only a few months old with a handful of customers, but I introduced myself as a friendly competitor.
The first business owner was pleasant during the initial phone call. We instantly developed a mutually-beneficial relationship that has lasted to this day. The other competitor scoffed at me at first. As we showed that we operate with integrity and continued to grow, that business owner and I also built a friendly relationship.
There are different types of competition in business, both courteous and discourteous. Though you’re in the same market, interacting with competitors doesn’t have to be hostile. Small businesses need allies. A little friendly competition can often give you an advantage. Don’t be afraid to take the initiative and form a little camaraderie with similar business owners.
Benefits of friendly competition
In business, there’s nothing wrong with a little friendly competition. In fact, competition can benefit your company. Just how can competition be a good thing?
It keeps you from getting complacent
In my experience, competition keeps you on your toes. That constant alertness helps you provide superior service and unique solutions for customers. You can’t get lazy with your business operations because you don’t want your competitors to surpass you.
For example, runners tend to finish with faster times when there is a competitor on their heels. You can’t lag behind during the race if you want to win. Competition motivates you to produce top-notch results.
Friendly competitors help each other
By establishing yourself as a friendly competitor, you can learn from established businesses in your industry. Some veteran entrepreneurs don’t mind offering advice to new business owners. Feel out your first introductions to see who is willing to form a relationship.
After you’ve established rapport with some competitors, you can create a mutually beneficial arrangement. For example, a community could plan an event that brings people to the local eateries. By joining forces with your competition, both of you can reap the rewards.
Source: Mike Kappel - <https://www.forbes.com/sites/mikekappel/2016/10/19/deal-with-competition-in-business/#42ecefff3a60> Accessed 10 th Feb 2019
