But if paranoia is not the way forward, what is? How should you respond to the prospect of another company selling the same thing as you to the same market?
Think about why the competition has opened up
The first thing you should grapple with is why the competition has arrived at this time. The reason so many business owners have to deal with competitors, is that quite simply very few products or services are completely original and impossible to replicate.
If you saw the opportunity in your market, others will too. Alternatively there may be other explanations: changing patterns within your industry or community, new products arriving, or even changing demographics or a disgruntled employee could fuel an attempt to enter the same market.
Consider the positives
Having a similar business open is not always negative. If another savvy business owner has recognised the same business opportunity as you, is that necessarily a bad thing? Perhaps both of you can do well with no effect on each other? In many cases multiple businesses competing can actually increase the size of the market, meaning each participant gains, for example where multiple restaurants open on the same high street.The increased choice and range means more people come, which means that everyone does well.
Refocus on your business distinctives
As every business evolves, it naturally begins to sell an increasing range of products or services. It may increase its reach through more locations. But often there is one thing about your business that keeps customers coming back year after year. Is it your great prices? Is it your unique range of products or services? Is it the quality service you offer? When competition springs up alongside you, it is a great chance to re-examine what your business's unique selling points are.
Think about customer loyalty
Most people who buy a product or service regularly dislike changing their supplier. This is a natural instinct: it is inconvenient because it requires change and it can often feel disloyal on a personal level. So think about what level of customer loyalty you may have. Do you have a friendly smile or a kind word for your customers? Do you make every effort to get things done as quickly and as well as possible?
Review your marketing
Whether you have street signage or advertising or some other way of promoting your business, when the competition arrives, it is a wonderful chance to take a fresh look at what you have been doing. Sometimes it is a good idea to get a third party to take a look - a fresh pair of eyes can often see what we cannot after many years.
Christian Nellemann,
CEO of XLN Telecom
