Competition makes you better and will always be in the race. By Gary Shotton #000064

Click Here to download in audio (.mp3 format); right click on link and select “save as”

Click Here to download in video (.mp4 format); right click on link and select “save as”

Competition

By Gary Shotton

Today, I’m going to talk about competition. I feel very fortunate that I’ve been able to talk to literally hundreds of people that have wanted to get in the business in one way or another. I’ve been fortunate to travel to some 30, 35, or 40 countries, foreign countries in almost every continent and talk on business, and many of them come because they want to get in business. They’re tired of working for somebody else or maybe there’s no jobs and that’s their only option, and so I love to help and be involved with business startups and business on a small scale.

I’m not that good. You’ve got 500 employees and $50,000,000 in sales. I’m not comfortable in that realm. That’s not my niche, and so I’m down in, “Let’s get started with little or nothing,” and, “Let’s go row that to a million a year or something in that size.” In those discussions, I have from time to time heard people tell me, “Wow, I got to get into this because nobody else is in this.” In other words, there’s no competition. “I want to be in there, so that I can be the first in, and that way, I’ll have no competition.” Let’s just dispel that bubble and pop it because there’s no such thing as no competition.

I’ve had people that tell me, “This is the only … I’ve got the only person that has this idea to make something or sell something,” and I said, “You know what? Did you Google search that?” Just pop the bubble here and recognize that whatever you think you’re the only person doing, there’s probably hundreds if not thousands of people who are doing something very similar. You may have a little niche, and yes, you may have an edge for a while, but even if you do have an edge, and you do have a niche, and the word gets out that you’re doing really well with this idea, somebody is going to try to copy it. Somebody is going to try to compete with you. You have to be a good enough business person to stay on the cutting edge, and be aware of your competition.

Now, early on, this has been in the late ‘90s, 1990’s, 1989, ‘90, ’91, right in there sometime. I had the late now Sam Walton. He passed away probably 10 years ago, but I read his book “Made in America,” and he talked about this subject. Yeah, it’s a little dated, but he talked about competition, and it was so impactful. I can tell you a little bit about the story. See, he was the little guy. He worked basically indirectly or directly for Sears. He worked for somebody that didn’t have the vision that Walmart had, and he had the vision that the book is a great read even today, but at one point, Kmart was the big giant and Walmart was the little bitty company.

You know what? He shopped Kmart. He shopped his competition. He went in personally and asked questions. He looked how they merchandise things. He asked what their computer system would … he got all the information he could. He went in as a customer and just analyzed. Today, you can send in go-shoppers and see what your competition is selling something for if it was a retail item. He studied and knew his company, not with the idea that he undermine them or just undercut them, but he wanted to know where his niche was and how he could fit in.

In your business, you got to recognize 2 things. Number one, you will have competition, and number two, how can you be a better service? How can you be a better product than your competition so people have a choice? At least in America, we do. You can buy things at different prices. What’s going to compel somebody to choose you? I just really strive hard on asking question, knowing your competition. In my particular case, I was an owner of a moving and storage company for more than 17 years, and here are some things I did.

Word got out, but our prices are too expensive. That’s why people weren’t using us, or maybe we thought our prices were too low, so about once a year, I hired somebody within our company to be a go-shopper. Now, I didn’t tell them to lie. I didn’t tell them, “Hey, I’m moving to Detroit.” I said, “I’m interested in the prices to move to Detroit,” or, “I’m interested in a local move.” He would just call up and never did give them their name, never did give them their phone number, and they’re just running through the process and say, “Hey, what’s your hourly rate? Does that include a truck? Does that include insurance? Do you bill from when we leave our place of business to where you arrive? Do you? How do you bill that time? How would I get an estimate from you?”

I pay this about once a year, someone to call everyone that was advertising and a similar business with us, and I ask them to make me a little report, a very simple report. One column said, “What’s their hourly rate?” Another column said, “Do they charge a truck fee?” Whatever your business is, analyze that data. Make sure you know what your competition is charging if at all possible. It is very valuable to that.

I also had a map. I had a map of my city, and so I put dots on my map. I knew where … if I was new at some place, I knew where they were located. It didn’t give them much of an edge of where they were located, but when it came time for me to buy or build a building, I knew, “Do I need this place on the main highway where everybody can see me, or is it okay to be back in the cheap seats where it doesn’t cost so much?” I just add the key, asking questions. Get out of that chair, out of the office. Ask questions. You can ask some of those questions through another person, but at the end of the day, you yourself probably as owner probably need to ask some of those questions, so you know you’re getting good information.

Now, I’m in a machine shop. I can’t visit the other shops. It would be unethical to visit the other shops, so I have a different approach about knowing what my competition is doing. I’m not, first of all, overly worried about my competition. I know that if I continue to provide the best product for the best price, and good service, and on-time delivery that my customers want that. My customers in the manufacturing business do not necessarily shop for the cheapest deal. They want the overall best value for their money, and I can find that out from talking to my customers and a little bit of street knowledge, and I can continue to focus in on my customers.

In fact, tomorrow, I’ll meet … every other week. On Tuesday at lunchtime, I’ll meet with my biggest customer. Tomorrow, I’ll meet with my other big customer in the morning. They’re in different fields, so I won’t have a conflict there. I choose not to work for 2 companies that are directly competitors with each other. I think that creates too much of a conflict of interest because they’re in competition, and if I have knowledge from both of them, what’s the risk of me sharing some of that confidential information?

There’s all levels of competition, and so at the end of the day, I think we need to know about our competition. I think we should shop our competition. I think we should be knowledgeable. I think we should be asking questions. I think we should be the best that we possibly can be, and that includes knowing who’s competing against us.