In a small business owner’s niche, one of the toughest things about getting a great foothold is by getting ahead of the competition. He can dominate his niche and improve his revenues if he can beat his competitors. Nevertheless, the competition is highly challenging, and many business owners wish they have no competitors. They can have the complete market for themselves with less competition, and they can be sure of success in their business with less competition.

Surprisingly, it is not the best for a small business. A considerable level of competition is necessary for a small business to achieve a greater level of success. Let us consider the below factors stating the significance of competition for a small business.

Prevents Complacency

Complacency may seem difficult to overcome, especially when success is attained early on in the life of a small business. When a business owner sticks with something that works very well for him, he may then experience complacency. This implies he can double down and can be certain about the success of his products or services.

Very soon, he will find no reason to fix anything as he knows that his customers are there. This is not good for a business owner and more importantly, his clients and his business. Thanks to Uber and e-Commerce, this kind of attitude is killing so many small businesses today including taxi and, brick and mortar industries.

The advantage of competition is that it pushes the business owners out of their comfort zone and they are driven to take a closer look at their services or products, their customer service, marketing, business structure, and more. A business becomes better when it is on its toes, and this is the mantra for succeeding quickly.

Stimulates Innovation

Being on their toes doesn’t just help the business owners in fixing the broken parts of their business, services or products, etc., but also can be useful in finding innovative ways to deliver those services or goods.

With a good level of competition, the business owners are driven to provide their services or products in a much better way when compared with their competitors. This is not only limited to a service or a product, but it could also be in customer interaction, marketing, delivery, and many other parts.

For a successful business, innovation can be considered as the lifeblood, and this is the reason why Apple and Airbnb are such massive successes. If they had no competition, their innovation would have been minimal.

Enables Business Owners to Stay Away from Committing Mistakes

The competition enables a small business owner to avoid committing the same mistakes their forebears have committed. The competitors will be trying different strategies and tactics to magnify their success. The business owner would have used these tactics and strategies already on his start-up journey. However, by examining his competition, he will understand which things worked for the competitors and use them.

More importantly, he can avoid the things that didn’t work for the competitors. This indicates that he can save a significant amount of time, money and energy by avoiding the implementation of wrong or bad strategies that could irreparably or profoundly impact the business. Thanks to the competition, business owners can skip making those mistakes.

Lets Business Owners know they are on the Right Path

How does one know that his business idea will be a highly successful one? How can he ensure that the path chosen for his small business is not only good for it but also something that people need? One simple answer to this is “competition.”

If the market in which the business owner is operating doesn’t have any serious competition in it (with such a globalized, competitive market we are living in), then that implies something is wrong.

The wrong thing may be that it is highly difficult to find customers for his niche or it could be that the profit margins are very or the products are too expensive or maybe various other reasons.

Nevertheless, the opposite is true probably if he has a higher level of competition.

There is a lot of room for newcomers, the products have higher profit margins, and there are lots of customers.

This is useful in letting him know that he is in fact on the correct path and his small business has a perfect chance of success with the right marketing strategy.

Allows Business Owners to think like their Customers

This is related to complacency. The business owner can reflect on how his customer experiences his services or products with the help of competition as he will be continuously on the lookout for advances that his competitor is making. If he wants to increase his market share or hold on to it, he will need to stay a few steps ahead of his competition.

This implies that he has to understand what areas of his business model the customers love, and what areas need some work. This can be the products, marketing, customer acquisition and retention, customer service personalization, and pricing strategy.

Instead of only considering the profits, the competition enables him to understand what is best for the customers and this, in turn, increases the profits to a greater extent.


For a small business, the competition does not have to be a death knell. In fact, it is one of the major causes why a small business survives in the first place. With the right amount of competition, focus, strategy, perspective and innovation, a small business can become big in no time. Thus, competition plays a significant role in the evolvement of any small business.

Read more: