Do you compete or collaborate?

We are brought up to believe that competition in business is important. If there is no competition there is a monopoly and prices go up. The sole supplier can charge whatever they like.

There are even government departments to regulate and control anti-competitive practices.

But all that focuses on price and choice. If you can choose between suppliers it keeps them all on their toes. If there is no collusion on price, prices are likely to be lower and fairer.

Competition can be good

So competition is there to protect the consumer of the product or service. But it can also be good to grow the market.

Mcdonald's and Burger King os a classic high street rivalry. Each vies with the other for market share on price and small differences in offerings. But their competition at the mass market level has opened up the high-end burger opportunities. Would Five Guys and Gourmet Burger Kitchen have grown as much or as fast without the giants? Competition opened up new niches.

When Coca-Cola launched it fiercely protected its brand and name, especially the cola bit. But it didn't fight Pepsi-Cola.

Maybe the authorities stepped in. Or maybe having another strong brand to compete against grew the market's awareness of the product benefiting both companies? Collaboration through competition perhaps?

Competition for small businesses

In the small business market competition can be fierce. Unique products or services are rare. So small businesses have to differentiate themselves in other ways.

Competing on price is generally bad news for a small business. It's a race to the bottom. There's always somebody else that will do it or sell it cheaper. If there isn't, it's because they went bust for charging too little.

So you compete on features or service, or some other USP.

The reality in the small business market is most people buy based on relationships. They buy from people they trust, they know, they like.

So building trust is crucial for your business. At the upcoming SURREY BUSINESS EXPOS my whole stand and LinkedIn workshop is focused on using LinkedIn to build trust.

Collaboration grows trust and markets

That's where collaboration kicks in. If two competing businesses trust each other enough to work together, isn't that a good sign?

Why would you work with a competitor rather than compete with them? In any particular sector, one small business is unlikely to cover all the bases for all customer needs. It might be price point, it might be job size, it might be specialist skills or it might just be a personality fit thing. Better to pass the job to the right business and ensure the customer is happy, knowing your collaborating competitor is going to do the same for you.

Growing the pie

This type of healthy collaboration is likely to grow the market for both businesses. You may end up with the same proportion of the pie, but the pie has grown and so has your business. Even if your proportion goes down, the overall size of your piece of the pie can have grown. More people will know about your niche and your specialism.

Doing things you couldn't do alone

Collaboration allows you to punch above your weight. That's the principle for Business Expos. I couldn't put on a one-business show and get a thousand attendees. But being an active participant in an Expo gets me in front of a thousand potential customers.

I work a lot with small local charities to help them get traction on LinkedIn. It's one of the ways I give back (I don't charge small charities - get in touch if you are involved with one and need LinkedIn help). I'm part of the Surrey Charity Network which brings together lots of small local charities. One of the key aims is to get them to collaborate.

Yes, they all need volunteers. Yes, they all need to raise funds. But most people volunteer for or donate to a specific charity for very personal reasons. I am a volunteer with Samaritans and Oakleaf Enterprise because I lost a friend to suicide after he struggled with his mental health.

Charities that put aside that fear of competing can collaborate to do good. As a Samaritan, I promote Oakleaf and the services it provides. They can also collaborate on events. A favorite fundraiser in Guildford is to get people to abseil down the outside of the cathedral. But to cover the costs and raise a worthwhile amount you need a lot of volunteers and abseillers. Too many for smaller charities. But if several collaborate, everything changes.

In Summary

Competition is healthy and important. But collaboration can take your business to heights you never thought possible.

And it all starts with trust and relationships.

If you are at the SURREY BUSINESS EXPOS on the 27th of March drop by stand 132 and have a chat and a chocolate. Take our quiz on whether your LinkedIn presence builds trust and you could win a really useful prize for your business.