How “Competition” Helps Your Business


When we heard of the word competition in a business, an entrepreneur is usually threatened. Why? Because he has a notion that competition kills his business and eats up his profits. He usually assumes that when a competitor arrives, sales and profits of his business will go down.

Let me start by encouraging you that competition helps your business. It is good in your business. That is, if it’s a ‘healthy competition’. You can take advantage of it.

 

Efficiency and Competence. Because of competition, an entrepreneur is always challenged to make sure that his product or service being offered has the highest quality in order to attract more customers in his business. Continuous product and service development is always the key in assuring a constant flow of loyal customers that will drive your business to success.

Competition brings prices lower. Of course, customers prefer cheap products. Competition challenges the entrepreneur to always provide cheap products and services without sacrificing its quality.

Competition discourages further competition. A fellow entrepreneur competitor deters from further entering into a competition as he will battle with the present competition of quality products and lower selling price. Competition is not for the faint-hearted entrepreneur.

Competitors as back up in inventory system. By becoming friendly with competitors, entrepreneurs can use them as their back up in their inventory system. If an entrepreneur runs out of a supply of a particular raw material, he can always borrow temporarily to his competitors thereby not causing delay into his business. This usually happens in some automotive detailing stores.

Competition encourages people to flock. People flock to a group of competing stores. This is the idea behind bazaars or retail malls. People go to these places to buy something. This same flock of people can be a small entrepreneur’s potential customers when they pass by his store on their way out of the bazaar or mall.

Competitor as buffer. An entrepreneur can also use his fellow competitor as a buffer in case there is an overflow of clients or job orders. He can temporarily assign some of these jobs into his competitor. In this way, he can continue to serve his customers. But beware! Be sure though that your competitor does not take your customers away.

So the next time you heard of the word competition, don’t be alarmed.¬†Competition won’t always be the dreadful word that kills your business. Learn how competition helps your business.

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Tyrone is a passionate financial literacy advocate. He started this blog on November 2008 when he watched The Secret which talked about Law of Attraction because he wanted to become a millionaire and wanted to know how a millionaire acts. At the age of 26, he achieved his first million. To find out more about him, click here or follow him at Instagram

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