I’m big on leveraging partnerships and existing resources in the community. In a rural area, it’s not just a neighborly; it’s a survival technique. Reach-ing out to your neighbor can be a very smart move if your goals are aligned. Nonprofits, for example, might look to work with the government or with another nonprofit to receive joint funding in an effort to increase the impact on their similar client base; this in turn does away with competition for funding and the risk the loser will face by not serving a section of their population (if they don’t win).
But what about competition between small business owners? What happens when a business opens in direct competition with another business? In a rural area, this can be lethal. A new business selling the same or similar product can mean this new venture will become a substitute, or even a replacement, for an existing business’s good or service.
Competition is a scary thing for small business owners, especially in rural communities, and rightfully so. However, competition can be extremely valuable to the consumer. Theoretically, competition means that providers of a good or service need to be on their A game in order to run a successful, competitive operation. Consumers know that they are going to receive great service, quality, growth, variety and cost efficiency when two or more businesses operate in the same market with similar and substitute goods and services.
As a consumer, can you think of a local business that is still in operation that is lacking in quality product, customer service, or variety? If you can, think of who might be in direct competition with that business. What comes to mind? Now try and think of a local business that may have closed. Did they lack in quality of product, customer service, variety, marketing, cost savings, etc.? Do you think shutting their doors was a result of this inability to stand up to the competition?
Note: To be fair, standing up to the competition is not always a reason a business shuts its doors. There are many other reasons this may happen.
Sometimes in rural communities it’s not same-county businesses that are competing with each other, it’s the entire small business community that competes with larger neighboring towns and cities. Maybe one restaurant has more to fear from a similar establishment two cities over than they do from the one 10 miles away. So how does the rural small business community support fellow business owners, even their competitors? When is a little competition healthy because it’s going to keep consumers shopping local rather than leaving the community all together?
Consumers like choice and variety (to an extent). For example, two or three women’s apparel stores might view each other as direct competitors because they’re all in the same rural county. On the flipside, a consumer might be more likely to shop for her clothes in that county because there is more than one store to choose from. If there were just one store in a community, why wouldn’t the consumer just hop on the interstate and go to the mall that’s a simple 40-minute drive away? The creation and growth of the interstate highway system has been a huge obstacle for small town growth and revitalization.
Ever hear of the broken window theory? Vacant buildings are often seen as a threat to public safety, but what do they do to the appeal of a small town main street and the businesses that operate there? A small business owner might not like a competitor opening next door, but there’s no arguing that it looks better to have a bustling street rather than an abandoned one.
I’m not claiming to have it all figured out, but can it be that a little healthy competition never hurt anyone?
Chamber Connections is a monthly column by the Chamber of Commerce of Warren County.