Is Competition in Business a Good Thing?
Imagine you’re considering starting a business but as you start to look around in your local market, you notice plenty of others offering the same service. You’ll probably start thinking something along the lines of, “This market is already saturated with XYZ service. I should probably look at other options.” Many aspiring entrepreneurs see competition as a threat, but in my experience -especially in franchising- it’s often a good sign.
I know what you’re thinking, “Competition is a good sign?”
Stick with me here.
When people start exploring franchises, they often worry about oversaturation. Statements like, “Everyone already has a yard service,” or “There are so many preschools/ daycare centers in my city,” are common.
It’s an understandable first impression.
You’re about to invest a substantial amount of capital and time in starting a business, you want to make sure that you’re not setting yourself up for failure by going into an industry that doesn’t have any opportunities left, right?
That’s the general thought process behind it AND it is based solely on emotions rather than facts.
Let’s take lawn care services as an example.
A quick Google search for ‘lawn care near me’ will likely generate at least a couple of pages of Google My Business (GMB) listings in most markets.
The market is too crowded, right?
Maybe not.
Take a closer look at the listings. How many of them don’t even have a functional website? Now, try giving a few of these businesses a call. How many of them don’t answer the phone? Don’t even have a voicemail setup? Answer the phone while they are on a job site?
This is rampant in the service industry and creates massive opportunities for more professional service providers to take advantage of!
Think about it this way:
If there are a lot of businesses offering a similar service in your market, that means there are probably plenty of potential customers who are utilizing these services. There’s a clear market demand for the service offering, which is what you want to see! These competitors have already paved the way by educating the market on the need for these services.
Going into an established market means you’re able to focus your resources on delivering value and differentiating yourself, rather than creating demand from scratch. This allows you to gain faster market entry with less risk, and by tapping into an established franchise brand, you’re able to utilize proven systems and processes, simplifying it even further.
Competition forces you to define your Unique Value Proposition (UVP)- what sets you apart. Sticking with the lawn care example, this could be a professional online presence making it easier for potential customers to find you and learn about all of the services you offer; it could be having a professional call center that answers customer phone calls, books appointments and addresses questions/ concerns; it could be easy billing and payment options so that customers don’t have to rely on cash or checks.
There are a lot of different directions that could go but you get the point.
If you want to make sure you can succeed in a competitive market, there are a few things you can do to stay ahead of the competition:
Research the Competition: Identify what your competitors do well and where they fall short. This will help you position your business effectively.
Focus on Customer Experience: Everyone thinks they provide a great customer experience but going above and beyond is a game changer. Customers will pay for reliability, convenience and a memorable experience.
Leverage Your Franchise’s Support: Unless you are one of the very first franchise owners in a system, you aren’t going to be the first one to enter a new market with established competition. Franchise brands often provide tools and training to help franchisees differentiate. These could come in the form of exclusive products, advanced technology, or marketing strategies.
Build Relationships Locally: Being an active participant in your community can make a huge difference. Sponsor local events, participate in networking groups, find opportunities to give back, and most importantly, build trust.
While competition is usually a good thing in business, it’s still important to assess if the market can sustain another player. If every business in the sector is struggling to stay afloat or the market is shrinking, it might be time to reconsider but you need to make sure you are assessing the competitive landscape objectively.
So, what did we learn here today?
Competition isn’t the enemy- it’s proof of opportunity! Instead of fearing the competition, focus on how you can thrive in an established market. After all, you don’t have to be the first- you just have to be the best.
What’s your take on competition? Have you seen businesses succeed in crowded markets? Let’s discuss in the comments.
About the Author: Brandon Wilson is a Certified Franchise Executive (CFE) and franchise consultant with over 8 years of experience helping professionals transition into business ownership through franchising. Before consulting, Brandon held key roles in franchise development, contributing to the growth of 10 different franchise brands. Today, Brandon specializes in guiding mid-senior level professionals to identify franchise opportunities aligned with their goals, skills, and financial outlook. Passionate about providing alternatives to traditional corporate careers, Brandon brings a wealth of expertise and a personalized approach to every client journey.