There's an interesting situation developing in a small country town, and small business owners, particularly those who are just starting out, can learn a lot from what is happening.

For months several shops have been empty. Then, within weeks of each other, two new tenants moved in. Everyone watched to see what new businesses were coming to town and the rumours flew!

Both put covers over their windows so locals couldn't see inside. Fresh paint went on the walls inside and out and people came and went, and two weeks later one owner put up a sign advertising the opening of a new Indian restaurant. Now the town was really excited because there had never been an Indian restaurant there before.

A few days later a sign went up in the second shop advertising a second Indian restaurant. The town watched to see what would happen and the second restaurant was first to open to the public.

Those who ate there reported that the food was great, but the décor was pretty bland, they didn't serve any drinks except water and everything appeared to have been put together in a hurry. They wouldn't be rushing back to eat in that restaurant, but they might try the take away.

It seems that the owners wanted to be the first to open and rushed their preparations. Apparently, they had moved from the city and knew very little about living in a country town and they had not done any market research.

Hastily repainted décor, furniture that made the room very crowded, and no ability to service their customers' need for either alcohol or soft drinks made the eating experience uncomfortable to say the least. Locals will usually only try a restaurant once, so the proprietors may have lost quite a few customers in the first couple of weeks.

Now, a month later, the other restaurant has not opened. It could be that they've changed their mind, but more likely they will be watching their competitor to see what they are doing. This is a wise decision because it's always better to have a point of difference and by letting the other business become established, the second business can modify their plans and their products to create their own market. In this way they can value add to their service and product, by operating at different hours, operating a home delivery service for take away or specializing in catering for parties.

It's important to acknowledge your competition. Find out what they are doing and what you can do better. Ensure that every customer that chooses to purchase from you leaves you wanting to come back and ask them for feedback to be sure. Be flexible in how you do things - to provide that extra little value for your customer. Don't be afraid to try new things and see what works. Keep talking - to your staff, your customers and your competition so you know what they are doing and can take action to attract a different group of customers.

Competition challenges us to be more creative, more aware of our customers' requirements and much better at service. By accepting that challenge, many leading businesses have increased their earnings a hundred percent, but if you are afraid of competition you can only see the negative things in your business and it becomes really hard to make it work.

Penny Paxman coaches small business owners in rural areas. She has introduced a program called Fit for Business to help business start ups lay the foundations that will help their businesses to grow. Contact her at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or visit www.tickslife.com.au