Entrepreneur magazine, December 1999
Do you see your competitors simply as your worst rivals? Did you know they may actually be your best source for ideas?
Part of starting a business includes studying the competition--if they're doing something that's working, look for a way to do the same thing, or better, in your own business.
That's what Amy Ratekin, 30, did when she started Little Elf, an event decor, balloon sculpture and gift basket service in West Des Moines, Iowa, in 1996. She studied not just local businesses that offered similar products and services, but also balloon and gift basket companies in other states. "I wanted to learn from the best," she says. "By discovering what other businesses in the industry do, finding out what works in other parts of the country and even other parts of the world, and using those ideas in my business, I've become very successful."
For example, Ratekin copied inventory management and production techniques from retailers and adapted them to her homebased business. And, after determining that other balloon and basket services arranged their items on shelves with a combined purpose of storage and display in mind, Ratekin solved her inventory storage issue the same way. Her facility uses a shelving system that allows all items to be easily seen and reached, letting her rotate stock efficiently.
Next, she visited two local balloon companies and examined the custom-built workstations they used to assemble their baskets and bouquets, then reproduced the design in her own shop, having her husband complete the construction at a substantially lower cost.
Studying competitors that were faltering also taught her what not to do. "I learned I needed to stay on the cutting edge of the balloon industry," she says. She attends seminars and conventions, reads trade publications, and networks to avoid stagnancy.
And Ratekin's examination of businesses outside her area showed her that local stores had been lax in educating the public. Ratekin realized she could gain an edge simply by showing people the many creative ways they could use her service. "People don't know what's available," she says. "By teaching them, you increase your business."
Little Elf, (515) 225-3439