You rarely hear anyone say that they want to be the next MySpace. The same goes for Borders Books, Circuit City, and the compact disc.

Where did these businesses and ideas go wrong? Quite simply, they failed to adapt when competition moved in on their market. By the time Facebook’s ‘wall’ had cemented itself, MySpace was simply too late to adapt and regain market share (although a recent push by MySpace in October 2012 could force me to eat my words).

Let’s face it — just like kids steal answers off the smart student’s math test, business owners deal with the same sort of copy cats.

A cousin of mine owns a kayak rental and guide shop in South Carolina. She was the first company of the type to open on the beach where she lives, and for the first two years, she watched business steadily grow.

Last spring, two more companies moved in, offering near identical services. One of the competitors added stand up paddleboards to their fleet, a move my cousin had considered but decided against.

Guess who’s doing the most business now? Unfortunately for my cousin, she fell behind the times when she decided against incorporating paddleboards. More vacationing families want to try this new activity-of-the-moment, overlooking the easier, breezier experience of paddling a traditional kayak.

Nonetheless, my Solopreneur cuz has picked up a few pointers and kept her business strong, despite the new kids in town. She’s now offering more generous family packages, striking a deal with the local vacation rental companies to get her fliers posted in their condos on the refrigerator. Because she already had those relationships and level of trust, she was able to fall back on her reputation as a solid provider of eco-tours.

If my cousin had never opened a kayak shop, would another person have done that in her town after two years? Maybe so, maybe not. The bottom line is, she opened up a new market, which is what any entrepreneur hopes to do. When this happens, however, it comes with the territory that others will follow in your wake.

Whatever sort of business you’re in, here’s how to stay on top when competition sets up shop next door.

  1. Stay Calm

You’ve worked so hard to get where you’re at, and here comes a competitor looking to snag a chunk of your market share. Don’t get mad! Chances are, if someone is in the same business as you, you’ve likely got even more similarities than just your work interest. More importantly, your customers come from the same demographic. If you get mad, your words and actions could come back to haunt you. Don’t give your new competition anything bad to say about you. Always take the high road!

  1. Embrace Synergy

One of my favorite restaurants is about fifteen minutes from my house, in a direction I almost never drive otherwise. When it first opened, I heard they had great BBQ, but I never made the extra effort to get over there. About a year later, an Irish tavern opened next door. Some friends invited me out, and I decided to make an evening of it, grabbing some BBQ before hitting the pub.

Since then, two more restaurants have opened up on that block, as well as an art gallery and a handful of small shops. It’s become a go-to area, with the businesses partnering together to host street festivals a few times a year.

I asked the owner of the BBQ joint if he’d experienced a drop in business after the competitor opened next door, and he said it was the exact opposite. When another option arrived, their business soared.

Whether it’s a geographic area of town or a new product, having multiple options for consumers draws more people into the market. Synergy can be a win-win for everyone.

  1. Roll With the Punches

Let’s say you own a small stationary shop, catering to both weddings and informal affairs. For years, you’ve enjoyed being the only local offering for these types of invitations and cards.

All of the sudden, a national chain opens up in your neighborhood. Their access to huge volumes of inventory allows them to undercut your prices by almost half, and you see your walk-in business plummet in a matter of weeks.

Remember, stay calm! Embrace your status as the ’boutique’ provider. If you’re community has a ‘shop local’ campaign, sign up for it. Offer free workshops on choosing the right typography and card design for your event.

In short, be the local resource that you are, and offer something that your chain competitor simply cannot: personalized service.

If you’re the first business in town with a great idea, chances are you won’t be the last. Expect competition to follow in your shoes, and focus on providing quality service and products that will stand out and create word-of-mouth loyalty, the most valuable kind of marketing there is.

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