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Handling Competition: Do’s and Don’ts

By: Rick Gossett



Almost every small business owner has to deal with competition, no matter what industry you’re in. Perhaps the competition is local, just down the street. Or maybe it’s an online competitor. Knowing how to handle competition is vital to the small business owner, especially new competitors.

When you first started your business, you probably took a look at your competition. You looked at what they were doing, which customers they were targeting, and how they differentiated themselves.

But what do you do about a new competitor who enters and disrupts your market? The new competitor is not only trying to draw in brand new customers to the market; they are also looking at some of your competitors’ customers—and yours, too. They might even draw some of your employees.

The new entrant to the marketplace forces you to react—but you don’t want to make a mistake. Small Biz Viewpoints came up with some advice for how to respond to a new competitor—and how not to.

Let’s look at their list of do’s and don’ts.


  • Panic
  • Reduce Prices
  • Slack on Customer Service
  • Kick Off a Large Marketing Campaign
  • Badmouth the New Competitor
It’s very likely that many customers will want to at least check out the new business once. You want to continue to put your best foot forward, but don’t blindly overreact when people look at the new entrant.


  • Study the Strengths and Weaknesses of the New Competitor
  • Improve Your Quality and Customer Service
  • Monitor Your Business Closely
  • Ensure Key Employees are Happy
  • Ask Customers About the New Business
Treat the new competitor like (it might seem obvious) a competitor. Find out what they do well and what they don’t do well, and how their business is likely to impact your own. Find out what people think about the new business, and keep a close eye on your sales numbers and other major metrics. And above all, operate at your best, to give the best impression for both customers and employees.
Published: December 19, 2012

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Rick Gossett

As COO of Tarkenton Companies for more than 20 years, Rick has been responsible for business software development, unique partnerships, business educational content and consulting, and more. Rick was the originator of Tarkenton Companies’s consulting service and initially handled all of the questions himself. Prior to joining Tarkenton Companies, Rick owned and operated a private practice as a CPA. Prior to that, he was a Senior Manager at Pannell Kerr Forster in tax and audit, as well as Principal in Ernst & Young's small business advisory group.

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