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Can a small business really beat a large competitor moving in next door?

(ENTREPRENEUR) How do you stand out when a big competitor moves to your neighborhood? Reddit has a few suggestions – some obvious, some not so much.

small restaurant competitor

Small businesses, especially restaurants have been hit hard by lockdowns. Many closed for good this year, and those that are still hanging on are in a precarious position as their local economies shift. Can a small business really beat a large competitor moving in next door?

A user on r/smallbusiness asked a timeless question that is especially relevant right now. Reddit user longbottomjr writes:

“We have a strong competitor moving in next door in a few months. Our restaurant is one that pays the bills but […] I feel that if this new competitor takes up enough market share we will lose our restaurant. Can anyone chime in with resources/ideas I can use to help put together our plan of action?”

Comments quickly pointed out what common sense would dictate.

First, ensure the basics are covered. Being clean, quick, friendly, and high quality will take you far, no matter what competition you’re up against. And as u/horsemullet said,

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“Customer service also happens before someone walks through the door!” So make sure that your online hours, contact info, menus and social media accounts are up to date and accurate.

Another point emerged that is less intuitive: Competing businesses will naturally gravitate towards similar locations. This is a well-established phenomenon known within game theory as Nash’s Equilibrium. In the restaurant industry, this is actually a good thing. It brings entirely new customers to the area and ultimately benefits all the other nearby businesses, too.

Take advantage of the attention by offering something other spots don’t, like loyalty rewards, specials, unique offerings, or meal deals.

Speaking of the area, a great way to stand out from larger competitors is to build relationships with the community you serve, as u/sugarface2134 emphasized,

“In my city there are two Italian restaurants in the same location – just across the parking lot from each other. We always pick the smaller one because the owner truly makes you feel like a member of the family.”

That’s an advantage of being a small, local business that all the money in the world couldn’t buy. Get to know your customers personally and you will not only create loyal regulars, but friends as well.

One of the top rated responses, from u/seefooddiet2200, made an often overlooked but critically important point.

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“Talk to your staff and see if they have any ideas. These are the people that are working every single day and may know one or two ‘annoying’ things that if they were switched would make things easier. Or maybe they see that there’s specific things people ask for that you don’t serve. Every single [one] of your employees is a gold mine of insight, you just need to be open to listening to them.”

That is applicable to any business owner who wants to improve their practices.

Ask employees what they think, especially the ones who have stuck around a long time. Not only do they know the ins-and-outs of their jobs, but this builds rapport and trust with your staff. A good boss realizes that employees are more than their job descriptions. They have valuable thoughts about what’s working and not working, and direct access to customer’s opinions.

Good luck, u/longbottomjr! We’ll be rooting for you.

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Desmond Meagley is an award-winning writer, graphic artist and cultural commentator in D.C. A proud YR Media alumn, Desmond's writing and illustrations have been featured in the SF Chronicle, HuffPost, Teen Vogue, The Daily Cal, and NPR among others. In their spare time, Desmond enjoys vegetarian cooking and vigorous bike rides.

5 Comments

5 Comments

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  4. Marina Teramond @ N.M.P.L.

    April 19, 2022 at 6:33 am

    To tell the truth, I think that it is really important to take all the details into account in order to stay afloat and be truly competitive. I think that offering something that is not available in other spots is a key to success because you will draw attention to your restaurant by doing that. It is the rightest strategy to move forward and show that you have a restaurant with an original concept. Of course, providing clients with unique or special offers will help you to increase demand and stand out from your competitors. Also, this advice to make your guest feel like a member of the family is so effective because an atmosphere has a huge value and people pay a huge attention to this factor. Without any doubts, if you try to get closer to your visitors, creating a cozy atmosphere, you will increase the chances that your restaurant will be a special place for them.

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