Why Competition is Good For Business

While it might sound strange, competition is actually healthy for growing your small business.  Many entrepreneurs might actually think it’s easier to market their new ventures without the hassle of dealing with competitors but in fact, the opposite is true.  In truth, you can’t afford to ignore your competitors and in all honesty, you don’t want to.  If you do, you are actually doing yourself a disservice.  There are many reasons competition is good for business and I will outline them below.

Competition fosters innovation.  By keeping an eye on your competitors, it will force you to consistently look at your core business strategies and goals for the future and enable you to make changes, should you need to.  Additionally, it will allow you to better evaluate what you’re doing well, what you’re not doing well and how you can make improvements to better serve your customers and clients alike.

Competition validates your ideas.  If you see that others are trying to position themselves in the market with a similar idea, it will lead you to know that maybe you are in fact on the right track and are really in touch with the target audience you are trying to reach.  It will show you that there are indeed customers that want the product you are selling.  If those competitors are failing, you are either leading the pack or maybe it will allow you to realize that, unfortunately, your idea isn’t working and lead you to further evaluate your business plan.  This is a good thing!

Competition forces focus.  Without competitors it’s often easy to lose focus on what your customers’ needs and wants are along with your goals and vision for the brand you are selling. Competitors help you build a better business by opening your eyes to what you need to spend the most time working on and what you should highlight in your business plan and objectives.

Competition drives down business costs.  You can benefit from your competitors’ research results and use them as secondary data to your own to either update your strategy or develop more innovative ideas.  Basically, this allows you to allocate less funds towards market research as you are in essence, getting it for free when you pay attention to your competitors.

Competition helps improve customer service.  Your competitors motivate you to set a higher standard in meeting the needs of your customers and clients.  While you don’t always need to have the lowest prices, competition can motivate you to care more about your clientele.  Helping build customer satisfaction is key to the success of any new venture and competition can help you keep your eye on this and not lose focus that it is always essential to be in touch with what your customers want, need and expect from you.

Competition encourages creativity.  Seeing your competitors make a name for themselves in the marketplace, actually allows you to better position yourself for success.  To be the best, you always have to find new ways of thinking and continue to grow and reevaluate your vision.  Competition helps point out flaws in your business model and therefore, forces you to think in more new and innovative ways.

Competition helps point out your strengths and weaknesses.  You can always look at your competitors and see what you are doing better than them or what they are doing better than you and then work to grow your strengths and readjust your weaknesses.

Competition helps you identify potential threats to your business.  If a competitor fails, you can look seriously at what led them to that point and make sure you stay clear of making the same mistakes.  This will help you decipher what plans are in fact detrimental to your business.  You may have thought an idea or product was working and then by looking at the failure of a competitor that was doing the same, you can make adjustments so that you don’t repeat their mistakes and end up hurting your business and its growth potential in the long run.

Competition stops complacency.  In essence, competition forces you out of your comfort zone and makes you think in more innovative ways and challenges you to keep pushing forward with new ideas and products.  Competition forces you to continually look at the marketplace you are targeting and make sure you are servicing it well.

As strange as it may sound, competition also allows you to get rid of customers that are actually a hindrance to your business.  You can’t please everyone and often some difficult customers can hold you back so sometimes it’s often best to let the competition deal with them and take away an unnecessary headache that you certainly don’t need and that hinders growth and you reaching your goals and objectives.

Competition makes seeking knowledge about your customers and the marketplace key.  You always want to keep ahead of the competition or at very least stay current with them so that your business doesn’t lose relevancy.  It shows you the true value of always doing market research and really staying on top of what your customers are truly asking of you to help better service their needs.

Lastly, competition helps you learn how to improve your employees’ performance on a daily basis which is obviously needed to help any business grow, succeed and stay relevant in the marketplace you are targeting.  By asking your employees to stay up-to-date on the competition, they will become more knowledgeable of the overall industry you are focused on in general and may lead them to come up with more innovative and effective ways to do their jobs better which, of course, enhances the success of your business.

If you haven’t thought about the benefits of competition, I sincerely hope you will because you really should.  Not only should you always know what your competitors are up to but you really can learn and grow from having competition and I hope I’ve proven that here today.

So what are some of your thoughts on why competition is good for business?  Have you used some of the ideas I’ve pointed out today or are there others you have used successfully in the past that weren’t mentioned?

Here are some articles you might want to check out on why competition is good for business:

“Competition is Good For Business (Plans)”: http://smallbusiness.foxbusiness.com/entrepreneurs/2012/09/24/competition-is-good-for-business-plans/

“7 Solid Reasons Why Market Competition is Good For Small Business”: http://tweakyourbiz.com/marketing/2013/05/31/7-solid-reasons-why-market-competition-is-good-for-small-businesses/

“Why Competition is Good For Business”: http://expensereduction.com/blog/why-competition-good-business#.UmaIdBAcQs4

“Competition Good for Small Businesses”: http://money.usnews.com/money/blogs/outside-voices-small-business/2009/01/29/competition-good-for-small-businesses

Until next time…