Teamwork: How to work together with competitors to make BIG moneyUncategorized, 02/02/18
Competitors are going to pop up in your niche no matter how good you are at running your business.
While many business owners get annoyed or whine a lot about competition, many forget about one solution that not only solves the competition, but also opens up channels for larger revenues.
What is that?
By working together – it’s that simple.
Small business owners may feel like it’s very harsh out there in the business world. If you fall behind, even for a mere second, a more robust business with greater resources could swoop in and take your customers overnight.
However, competition doesn’t always have to be war and it shouldn’t. Instead of viewing other companies only as competitors, we believe that you should look at them as potential collaborators.
Now, collaboration is vital to every business but business owners often don’t think about their competitors when they think of collaboration. There are so many opportunities out there for businesses to work together to exchange ideas and increase sales by forgetting the animosity of competition.
We like to call this the neighbor principle to describe teamwork among competitors. Imagine this, you head over to your neighbour’s home to borrow some milk because you’re don’t have any left. The next day, you help him wash his porch after a windy day that scattered leaves all over his house.
When you apply this principle to business, you and your competitors can leverage each other’s strengths at little or no cost to grow which is always great.
For example, a web design agency can offer their web development services to other local businesses in exchange for a link and mention of their business. Physical product businesses with almost similar inventory needs can also combine their orders to save shipping and storage costs.
These are just several examples to prove that working for and with other small businesses can be more powerful than working against them.
Why is competition good?
1) Competition makes you a better person
As humans, it is very common for us to fail to critically evaluate our personal and business weaknesses, which leaves weak spots exposed to being overtaken by competitors.
You are likely to be aware that competitors identify and strike at your greatest weaknesses without mercy. That is a scary wake-up call, courtesy of a competitor, that forces us to recognize those problem areas and find ways to fix them.
Without competition, we would get complacent and the business would never grow because there’s no fear of getting one-upped by anyone!
2) Competition makes you focus
History is filled with stories of individuals and businesses that successfully achieved some goals only to fall into no-man’s land because they lost sight of what was necessary to further continue their success.
As a business owner (especially in marketing), you should know the fear of losing something is a greater motivator than the desire to gain something. There’s an ancient proverb that says even a foolish king would have protected his land if he had known when the invaders were coming.
This is why businesses often focus on a consumer’s fear to sell their products; fear is a strong factor in taking action and the same fear is also the motivator to you pushing hard to overtake your competitors.
Once success is achieved, businesses at every level and scale need to be extremely careful to quickly identify and deal with issues both within the business and outside it.
Remember, at the end of the day, competitors sharpen your focus on the priorities of your business, identify the proper markets and channels to pursue, as well as making sure that focus 100% on customer satisfaction.
3) Competition lets you achieve your best
Entrepreneurs and most business owners in general have a competitive side in them; want to compete and beat the best.
That ambition also applies in business, because a victory doesn’t mean anything if there’s nothing at stake because of non-existent competitors. A monopoly will also never last long because competitors will ultimately recognise the opportunity in front of their eyes and pursue a share of the market.
If you don’t have competitors now, you will in a few years from now.
While competition may scare some, confident leaders welcome the chance to test their skills against the market and prove their dominance as a business. Confident leaders see competition as a way to hone their business skills instead of being a nuisance.
Hence, without competition, you won’t truly know where your peak potential is. Sure, you may be doing extremely well in a field with no competitors – but do you know how much more you can achieve if you had some?
Here are 5 reasons why we think we’re not insane for asking you to work with your competitors
We know that working with your competitor sounds illogical at first, but here are 5 reasons why it’s not.
You don’t burn bridges
In business, it is never good to burn a bridge simply because you do not know what will happen with your company down the road.
Google, for example, is as successful as it is because it got help and assistance from the industry’s smartest people, many of whom came from competitors of various sizes.
At the same time, there are many automobiles and large companies out there that frequently work together despite being direct rivals because there is always something to gain from a mutual relationship.
Another reason to not burn bridges is that you may exit or get acquired one day. This means your business could get bought over in a multi-million dollar deal (which may or may not be your wish), but it could happen.
Not all business relationships and acquisitions occur on that scale, but the idea is that you simply never know whom you will be working for or working with later in your career. Hence, making sure that your communication is open and friendly is a good policy to practice always in business.
Sharing information is always good
While every strong business does some things well, there are always going to be weaknesses where a competitor can step in and help.
If you are able to exchange information that a competitor needs for some of its own troubles, it is very likely your company will receive something in return.
For example, you might share with your competitor on how to acquire customers on Pinterest. The same day, they also teach you how to overcome high margin costs for your product service which is one of your weaknesses.
In the end, both businesses could benefit from the give-and-take practice instead of being all greedy and quite about information.
It’s good for the industry
Trade organisations and teams exist solely to help businesses work together to ensure their respective industry is well-represented and positively regarded by the public.
Sharing information with businesses in your same industry can help ensure that everyone is working toward similar business goals as well as providing a positive growth in the business. If your industry as a whole looks good, so will your individual business.
For example, if the marketing industry was all about keeping information to yourself, do you think today’s marketing and sales process would become so detailed and accurate?
Teaching is always better than keeping quiet
You should know that teaching accomplishes more than holding back knowledge. On one hand, it is important to be smart and not give away everything that truly makes you different from your competitors.
Yet if you can help someone in a way that does not compromise your business or your reputation, the industry and the marketplace will be better off than it was before.
For example, we all had teachers who made us better people, the same way business classes and speeches give you knowledge on how to become a better boss. If you have knowledge, remember to spread some of it around!
Helping up-and-comers or even fierce competitors can occasionally be a hard thing to do, but there’s always a right time to do it. Your help may not seem useful today but trust us, you will have your kindness repaid one day.
8 things you should accomplish to work together with your competitors
Stop talking negatives about other companies
One of the biggest pet peeves we have is when business owners constantly bash other companies. This happens a lot at many networking functions, public speeches, and business groups.
Whenever someones make a statement putting down another business, they should be ashamed and embarrassed at what they’re doing.
You know what happens when you do that? People will most likely not do business with the company bashing others because they give off a poor vibe.
Even if you know another company has a poor reputation, you should not go out and say they are a terrible company to everyone you know – that’s just childish.
Instead, focus on why your business is great instead of focusing on why your competitor sucks.
You should take the high road because your prospects will be more than likely to go with you because they see you as an honest and humble person for not bashing others.
Let’s be real; there are probably 10 other businesses out there that offer the same services as yours and do it better in many different areas that your business is not very good at.
By not putting down other companies, you focus more on how to make your business better instead of focusing on why other businesses are not as good as yours.
Remember, you are growing YOUR business, not the others.
Focus on areas your competition needs work on
As a business owner, you may encounter prospects who let you know that they were unhappy with your competitor’s service or quality, and that they’d like to hear more about what you can offer them.
They might criticise your competitors hard but remember, never tell them not to use them or say they are a bad business because that’s their decision, not yours!
You shouldn’t bash your competitors because you don’t know the situation over at the other business and can’t speak on their behalf. For example, a marketing coach may lose his clients in a week but did you know that he lost his significant other a month ago?
That’s why you don’t want to spread rumors or bad feedback about other companies. Simply acknowledge the information and let the client know how you will do your best to create a positive experience for them.
Sometimes you’ll hear feedback about a competitor. It might be good, or it might not sound so nice. If it is good feedback, send a note to the other company or tell the owner that you’ve heard good things about them lately.
If it isn’t great feedback, think about what you’ve heard and make sure your business doesn’t have the same pitfalls as your competition. Excel in those areas and you will win business from your competition quickly.
Again, if you’ve heard an abundance of negative feedback about another company, use it to your advantage and improve your business from it because that is a sign that the market is looking for a solution that hasn’t exist yet.
You can acknowledge your clients’ experiences and mention that you’ve heard negative feedback about the competition if they tell you about it, but stop being immature and don’t continue to bring up negative points about the other company.
Build strategic plans with your competitors
Building collaborations and alliances with competitors in your industry will also help your overall marketing process. For example, you may be in the same niche as John, your competitor, but both of you offer different services.
When you can’t offer a particular service, a good thing to do is to refer the client to another company that does provide the service. Referring a little business to your competitors won’t hurt; instead, you build good connections and you will get referrals back to your business!
For example, if you were running a t-shirt business, you may run of ink or clothing to complete your orders. If you’ve kept good relationships with your competitors, you can ask help from them by lending you some materials in the meantime.
The same advice can also be applied to service businesses. If you have too many clients or are facing an issue that you’re having trouble solving, don’t be afraid to get on the phone and seek for assistance from your competitors.
Give more referrals and compliment your competitors more
Referrals are a great way to work together and compliments are even better in a sense that they help build good relationships without much effort.
An example that illustrates the importance of working together is in the medical field. Before, it is common to see a great deal of arguments back and forth between medical doctors, physical therapists, chiropractors, and so on.
Feuds indefinitely arise from time to time between clinics and offices because they don’t want to work together.
Often times a doctor will tell a patient that another doctor doesn’t know what he’s talking about. The patient will hear this and relay the message to someone else. This creates enemies and is not good for both the trained professionals or the patient because everyone hates each other!
If the doctors and professionals could work together, everyone would be better off especially in a field where immediate care is important. Instead of talking negatives about each other, why not focus on your skills and leave the ones where you can’t handle to your competitors?
Working together also increases the amount of leads gathered among businesses. If you notice, people who work together and realise the benefits of their competitor’s services are always more successful.
For example, when a general doctor sees a patient that potentially has a critical eye disease, they should recommend a skilled eye doctor to the patient. That’s how businesses should work; give referrals always and you’ll get more leads for your business.
Realising the benefits of each other’s services will help your business, build trust, and provide the best possible service for your prospects
Talk honestly to the competition
Collaboration starts with a conversation. You might decide it’s too early to establish formal partnerships and so, despite being told to avoid the competition at all costs, grab a drink and talk about the big picture with some of your competitors.
Not only is it likely they will be experiencing the same challenges as you (or better still, they have overcome them and can offer advice), there might be an opportunity to work together and come up with strategies for developing key areas of the market in order to grab a bigger share of the market.
Sure you may lose a piece of business to the opposition, however in the long-term both you and the competitor will win.
Understand where the partnership can actually add value
If you’re going to formally pair up with someone, unless it’s a merger or acquisition, it’s unlikely that you’re going to join forces with someone who offers the very same product as you.
So, if you’re running a Facebook ads management business, it’s unlikely for you to form a partnership with another Facebook ads management business.
However there are many small or micro organisations that can offer a service which sits alongside yours and allows you to offer added value to clients. For example, a marketing business could join forces with a graphic design company to create wonderful visuals for clients.
To find out what your partnership needs, ask your clients:
- What additional products or services may benefit your clients
- Find a way to collaborate with your competitors
- Figure out a good way to execute the plan
A great plan with no solid execution is no better than no plans at all!
Make sure they have the same idea as you
For a partnership, similar culture and values are vital. Anyone who joins the business, whether as a partner or a collaborator, they have to think the same way as you and vice versa.
It won’t work if they don’t; you’ll waste time and conflicting views can have a detrimental impact upon your business when both of you cannot make a unanimous decision.
Before jumping into any joint ventures, make sure you understand who you are and what you stand for and ensure you express that clearly to your partners. At the same time, you should understand what your partner’s values are and identify what they really want to do with your business.
Then, listen carefully before you make a judgment call on your potential partner. Personalities play a key part of any business relationship and you need to be honest about your compatibility.
Be firm and set rules from the start
A collaborative partnership is all about benefiting together. You will need to be transparent with things like your client base and target prospects, working together to secure new projects and expand those already in existence.
It’s vital that you continue to discuss and agree joint objectives as things move forward to ensure the partnership remains mutually beneficial.
It’s best to put this into a contractual agreement so both parties are clear and agree on the relationship, although this doesn’t have to be complicated. Without a contract, nothing is set in stone and nothing is stopping anyone from breaking the rules.
If you want to be safe, make sure everything is confirmed in writing, even if it is in an email, including items such as actions, dates and responsibilities. Then, should any issues occur, you can review the original agreement and refocus.
Before you make any joint ventures, figure out these beforehand:
The first step to creating a joint venture is to set your goals and decide what you want your joint venture to do.
Then it’s time to look for people who share the same goals as you; you can find them online through networking groups or through conferences for your industry. Having a cup of coffee with other bosses can also be a good choice.
When you have a list of partners to go on a project with, keep these in mind:
- Do they have resources that are ideal for the partnership?
- Are they financially secure and stable?
- Do they have a good reputation with customers and other businesses they may be involved with?
Once you start talking to other people about what you might do together, a joint venture idea you haven’t even thought of might pop up – one with a lot of potential.
Once you’ve found the people to share in a joint venture, be sure to have it all put into writing in a joint venture agreement. Again, professional advice is highly recommended here so don’t skip out on that.
The agreement should cover issues such as:
- The goals and structure of the joint venture
- The roles, responsibilities, and decision making aspects of the partnership
- The financial roles of each partner
- The division of profits, losses, expenses, liabilities, and all other business costs
- The ownership and protection of IP like content
- Finally, the length and termination date or terms of the partnership
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