Competition in a close-knit community decreases cash flow. When too many businesses share profit, there is not much to gain. It causes frustrations and uncomfortable relationships within the group. There is a lack of trust because others are stealing ideas. It changes the supply and demand and spurs self-interest.
Competition decreases cash flow
According to the financial market, one factor that decreases cash flow is competition. If you are competing with ten other businesses, you will have little cash to cover your bills. You are sharing the profit with others. In a close-knit community, you are relying on everyone to buy your goods and services. But, not everyone will buy whatever it is you are selling.
People have different needs. The select few who are buying have various choices. Some people show loyalty to their merchants and may not want to buy from you. It is nothing personal. If someone likes a certain quality product, it is difficult to get the person to switch. If your competitor is selling diamonds, and you are selling cubic zirconia, you may fall short and lose out.
Causes frustrations and bad relationships
In a close-knit community, business owners get upset when someone steals their ideas. Hard work goes into coming up with a design. When someone else takes your vision, it causes frustrations and awkward relationships within a close-knit community.
Instead of working on your brand, you are wasting time copying someone else. You are not true to yourself with such behavior, and you are distancing yourself from members of the community. You will mistrust others because you fear they might steal another one of your designs.
An article in the Harvard Business Review states if you do not take action in an uncomfortable situation, things will get out of hand. The competition in a close-knit community can be rampant. If no one does anything about it, people become frustrated without knowing what to do. They complain among themselves, but the problem still exists.
Competition affects Supply and demand
If you know your product will sell well, you will keep supplying your customers with your goods. What if several other people are offering the same products? The market will get saturated with the same item, lowering the need for it.
The demand for your product might be high, but you will share the profit with countless businesses selling similar goods. People want to buy, but too many other companies are offering the same item. People will go with their favorites, and some of you will get left out.
Self-Interest and competition in a close-knit community
Does self-interest rule competition in a close-knit community? Do you seek personal gain when you sell to the group? Self-interest does not have to be a bad thing. If you feel passionate about your craft and sell it for profit, there is nothing wrong with offering the service. Your idea may help the people to whom you are transacting despite the personal gain.
According to Adam Smith in the “Wealth of Nations,” self-interest motivates economic activity.
It is not from the benevolence (kindness) of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. ~ Adam Smith “Wealth of Nations.”
When your sole purpose is to copy someone else’s idea, self-interest becomes a problem in a close-knit community. After observing an individual selling a product well, you corner the market and sell the same item. Your selfishness is to reap the benefits by sharing in the profit. It was not your idea, but someone else’s hard work.
Tips for avoiding competition
You can have a successful business without competing. Here are tips to aid you on your journey:
· Set goals
Have an idea what you want to get out of your business. For example, would you like to increase sales by 10 percent within the next year? Research your customer base to see what they want. Get feedback from clients to help you serve them better.
· Quit following the Jones’
What may work for others may not work for you. For example, if a business is losing sales, the owner has to regroup and work to increase sales. Suppose the owner closed its doors for one to two months? Will you close your business too?
You need to use your common sense. If your strategy is working, closing your doors will not help you. Always stay alert when dealing with competitors.
· Have faith in yourself
You are the one who created your brand. Ask yourself, “Why am I offering this service? Do I satisfy a need? How can I help my clients better?” These questions will help you focus on you rather than what others are doing.
Know your self-worth and be confident you can get the job done. Once you stay focused on self while you nurture your brand, you will not have time to copy others.
· Get excited about your brand
When you are excited about something, you will pour your heart into it. If you are copying someone else, your heart will not be in it. You will be too busy trying to make a fast buck. Put a smile on your face when making your moves. It will help to motivate you.
· Ask The Most Highs for guidance
Have faith in The Most Highs and put them first above all else. Prayers go a long way. Pray without ceasing. ~1 Thessalonians 5:17.
Instead of competing against your fellow members, think of products no one else is offering. Review the list of businesses to see what others are selling. Maybe you can provide an item that complements other goods in the commuting that no one else is selling. Competition in a close-knit community leads to frustrations and unpleasant relationships. So, try your best to develop your unique brand and bring something to the table no one else is offering. For example, introduce a new market.
Is competition affecting your business?