Business owners in general avoid locations where there are competitive businesses, wrongfully assuming that the more similar businesses there are in the area the fewer clients/customers there will be for them. And naturally, fewer clients or customers translates more often than not into lower profits.
But even though this conviction may make sense at a first glance, it’s not entirely true. On the contrary, it has been proven that having competitors nearby can actually be beneficial and help your business grow.
Here are a few examples how you can benefit from choosing a business location within a short distance of your ‘business rivals’:
Attract more clients/customers
Areas with high concentration of similar businesses within a short distance from one another often tend to be associated with those particular businesses. For example, banking, legal, financial, retail, hospitality, etc. Combined with geographical proximity of similar businesses, this makes the areas highly attractive to customers. As a result, these areas tend to attract more clients/customers and despite more intense competition, everyone (or at least most businesses) tend to get more clients/customers.
Facilitate the recruitment of skilled workers
In addition to attracting more clients/customers, areas with a high concentration of similar businesses also tend to be more attractive to skilled workers. A higher concentration also means tougher competition for the best ones, but in general, companies located in so-called clusters find skilled, experienced and talented workers a lot easier than businesses whose premises are further away from their respective centres.
Stimulate innovation, research and development
Having competitors nearby can be beneficial and help your business grow by attracting more clients/customers and facilitating the recruitment of skilled workers but only if you keep step with rival companies. As a result, proximity of competition has been shown to reduce complacency while stimulating innovation, research and development which in turn are of utmost importance for continued business growth and prosperity.
As you can see, being near your fiercest business competitors doesn’t necessarily mean you should look for a commercial property to rent or buy elsewhere. However, to truly benefit from the proximity of competition, it is crucial to be just as good or ideally, even better than your rivals. While having competitors close by may help you attract more clients/customers and find skilled workers, it also makes it easier for them to go elsewhere they are if not happy with your products, services or working conditions.