“I want to start a new business in the city that will compete with an existing one. I think there are enough customers for both of them. Should I talk to the business owner about my intentions before starting?”
That is the real world group of a reader. In small cities, we think of things like this. We do not do it because to hurt someone we often know them, or we know their family.
I have never personally asked anyone at the beginning of a possible competitive business or a leg ceased by anyone (except my sister, but that is a long history). While some people get angry about that, I think competition is good, only in a small town. And I say it from personal experience in business.
I discussed this question with my colleague Deb Brown, a former director and entrepreneur of the Chamber of Commerce, to obtain additional ideas.
In general, we do not believe it is necessary to talk to them first. Nor is it out of discussion, if you feel firmly by the person involved, if you know them or the size of the city.
Test your first idea
The main council that Deb and I would sacrifice is to make small tests first to measure the market. This is how you will know with certainty if there is enough demand to support another business.
You can do this for a retail business through emerging windows, rental of cabins at festivals or events, or through tests that sell some articles online or within another business. For services, you can start online offers, a mobile location such as a trailer or with some temporary tests. Once those little steps begin, you will learn a lot about what people want to buy, what you will pay and why they are hungry.
You can find that there is no demand, so that awkward conversation does not have to go after all.
Look for cooperation opportunities
Small businesses in small villages have more cooperation opportunities. Even a direct competitor could cooperate with you. This makes a much more important conversation than to seem to ask for your permission to start. Instead, go to them with ideas for ways of working together.
Here is an example advertisement of three retail businesses, two or that are direct competitors. The three were along the same block in a center.
Three local stores cooperated in this joint announcement, marketing their stores together. Photo of Becky McCray.
Ask your company from your little city here
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