Small Business Advice
While we are focusing on fear, worry, or hate, it is not possible for us to be experiencing happiness, enthusiasm or love.
— Bo Bennett, "Year to Success"
One entrepreneur we were helping was debating a really tough decision. A competitor was moving in only one block away, and this had her very concerned. After 20 years of business without any real competition, she feared that this new competitor would threaten her livelihood and her business. Before the competition opened up, they came to her and told her that they would not open if she paid them $50,000.
The competitor’s offer placed the entrepreneur in a difficult situation. She thought it would be wrong to pay a price to appease this competitor, but her livelihood and plan for retirement depended on maintaining a viable business. These types of situations are what make being an entrepreneur so tough.
She finally decided not to pay the money, and after a few years, she was grateful for her decision. It allowed her to both take the high road and to serve a customer base that she did not realize she had not been serving. As it turns out, going with her gut feeling was a good choice in other ways too. Had she accepted the potential competitor’s proposal, she may have committed a violation of the antitrust laws, which prohibit actual or potential competitors from divvying up geographic markets.
Being fearful of competition is natural, but it is also a good thing to have. Competition forces an entrepreneur to be much more efficient, and frequently, necessary staff changes only happen when a competitor enters the market. Additionally, competition enables us to see where we might be falling short in serving our markets.
If a competitor comes in, it is probably a sign that they see a market that is not being served. For this reason, each and every entrepreneur should frequently ask themselves, “Where am I not serving customers, and where could competition come in and take some of my market?”
Fear is a natural human emotion that probably originated from the “fight or flight” reflex. This reflex was necessary when the caveman had to decide who was friend or foe in order to survive. When chased by lions, it was mandatory that he flee. Now, however, I just do not believe that this emotion serves us especially well. Fear inhibits us from acting appropriately, and frequently, fearful people fail to act. Most of us tend to overestimate the impact of the consequences that we fear, especially with the passing of time.
When I was considering taking over the entrepreneurship program at FSU, it took me six months to make the decision as I was so fearful of the change. I had to switch from being a finance professor with over 20 years of experience to running a small program in another discipline. It was like jumping out of familiar territory into a forest I did not know how to navigate. Now, when I look back, I wonder why it took me so long to make the decision.
Now go out and make sure that you are assessing your vulnerability to competition and are not letting fear hold you hostage.
You can do this!
Jerry Osteryoung is the Jim Moran Professor of Entrepreneurship in the College of Business at Florida State University. He is also the Director of the Entrepreneurship Program at FSU and Executive Director of the Jim Moran Institute of Global Entrepreneurship. He can be reached by e-mail at firstname.lastname@example.org or by phone at 850-644-3372.