Utilize your specific set of skills
Trying to be all things for all people simply doesn’t work. You work yourself to death, worry about competition all the time and often don’t truly meet the needs of your clients at a level that makes them loyal. On the other hand, when you specialize, you get to do work you love, have loyal clients who are happy to refer you to others and your competitors become collaborators! I refer potential clients to other CPAs all the time. This might seem crazy on its surface because many people would say: “Those other CPAs are your competition. Why would you send them work?”
The simple answer is because I specialize! I do what I do really well. If someone else does their thing really well, I am more than happy to let them do that work. By specializing, the client wins because they go to the professional who has a skill set that's perfectly matched to them. The practitioners also win, because they can do what they do best more efficiently, which allows them to profit more from their work.
If you're a wedding photographer, someone who specializes in high school portraits isn't a competitor. Instead, they can be a good collaborator and referral source. They can send engaged couples to you because they don't know how to do weddings. And you can send families with graduating seniors to them too. Each specialty has different requirements, and the process is quite different even though they're both photography. Everyone wins! You each get to specialize – improving with each engagement, do the work that you really enjoy, and produce better results for your clients.
View competition as potential collaborators
Even businesses that are direct competitors can collaborate for greater profitability. W. Edwards Deming wrote that if we view supposed competitors as potential collaborators, all parties win every time. He shared an example of this in action with towing companies. A small town has two local towing companies, both of which are open 24 hours a day, seven days a week so they can respond whenever breakdowns occur. He postulated that it would make more sense if the two companies collaborated, each opening every other day for 24 hours. Each company would get the same number of clients on average, but they would only have to staff for half as much time each week. The end result would benefit both companies.
These two small businesses would then have more revenue to reinvest into their company and the community, ultimately helping the consumers in town. Maybe they can reduce their prices because they don't have to spend as much on labor. Or they can buy newer trucks and better equipment because they have more cash on hand. They can pay higher wages, creating happier employees who will perform their jobs better too. Everyone wins and the community benefits.
Create goodwill with prospects
Going back to our photography example, how do you handle a situation where you are already booked for a wedding and another prospect wants to book you for the same weekend? You can’t be in two places at once, so you need a good “competitor” to refer them to, right? Sure, it helps build their business, but you can’t do the work anyway so why not create goodwill with the prospect by helping them find a good alternative to photograph their wedding? On top of that, you increase your chances of getting referrals from this photographer in the future when she is faced with a similar situation. Everyone wins again!
How can your business better collaborate instead of competing? Instead of viewing others in your industry as your competition, consider how you can both win by specializing and working together.