Most people shy away from getting to know other business owners who offer similar services or products. What I have found is that these so called competitors can become your greatest assets (and vice versa).
If you are a small business owner offering a service (think accountant, massage therapist, chiropractor, acupuncturist, lawn maintenance, etc.) finding someone in your industry that you like, know, and trust, who offers a similar service can be a great gift.
Let’s say that you find yourself with an opportunity to travel for a few weeks or more. While you are away you won’t be available to your clients and when they need your help they’ll be “forced” to choose another provider. Now let’s look at an alternative. Let’s say you know you are going away, and you alert your clients far in advance of your time away and you let them know that if they need your help in your absence that you highly recommend another practitioner (or business professional) who can support them until you return. Which option truly provides a higher level of customer service?
Knowing a “friendly competitor” you can refer your clients to during your absence can help you retain your clients by attending to their needs while attending to your own. It’s a win/win.
Business Growth Opportunities
Now let’s look at another scenario. Last year I worked with a client (Let’s call him Frank) who had successfully run his business for 11 years. Still working 12 hour days and working 7 days a week, Frank knew he needed help. A few months into working together we talked about the possibility of him getting to know his competitors on friendly terms. After telling me that it was the worst %@&*!-ing idea that I’d ever given him, Frank reluctantly gave it a try.
I explained that no matter what kind of business you are in, each organization is unique and it excels at differently things based on the experience of the owners, staff, material cost, and other overhead. Also, each business owner has their own areas of passion and interest that might be a little bit different than your own. Therefore, as much as other businesses may offer the same product or service, you truly don’t have any direct competition.
I explained to Frank that small businesses like his were opening and closing each year for one reason or another. Then I asked “Who do you think that the owners are going to recommend their customers to when they close?”
Well, as I said Frank did reach out to a few of the businesses that offered the same or similar service to his own. What he found was that some of them struggled (as he did) to find qualified staff, a few of them had equipment to sell (that might be a good fit for him if the price was right), and a 3rd was considering selling his business.
Within 6 months of reaching out to one of his competitors Frank ended up buying out his competitor for a little more than 15% of what he expected to earn in his first year of taking over his competitor’s accounts.
Your greatest resources just might be the same people you call your competition.
1. Look for business owners who might be a little (or a lot) more successful than you are.
If you are wondering what to say to them, tell them that you want to find out what one another do so if you get a potential client who would be better served by them you can make a referral their way, and vice versa.
2. Connect & learn about each other.
Discover where your competitor’s sweet spot is, where your services overlap, and what else each of you (or your company’s) offer that is unique from one another. Create relationships with the businesses and business owners you would genuinely feel good about referring business to. You may find that even though some of what you do is the same that there is room to refer business to one another when you experience a client who has what the other offers.
3. Consider sharing resources or pooling your efforts to get better pricing on purchases.
Jennifer Martin is Zest Business Consulting’s founder and lead San Francisco Business Coach and Small Business Consultant. She helps small business owners, leaders, and managers worldwide understand how to build thriving companies they love.