One of the biggest "killers" of small businesses is complacency. Resting on your laurels and believing you have made is a step toward failure. Complacency is like an insidious disease; it slowly permeates the organization. Owners and employees become less motivated. Attitudes toward customers change for the worse. There is little innovation. There is resistance to change. A leading accounting and consulting firm ran a striking television ad showing a weathered and deteriorating large sign on the roof of a factory with the words: "We Are Number One." Some of the letters were missing. The message was clear. Management stopped caring. Another example is Kodak's loss of market share of the film market to Fuji. Kodak so dominated the market, controlling distribution throughout the film industry, it may have become complacent. Any place that sold film or cameras sold Kodak film. Agfa, a well-established German company, after a series of attempts, abandoned the United States film market because it was unable to displace Kodak. Kodak's management may have assumed they could also ignore Fuji's sales efforts as well. It appears to have been a mistake. Future profits depend on your business being competitive. Profitable firms welcome competition. Incompetent firms hate competition. Over two hundred years ago, the economist Adam Smith wrote his lengthy treatise on capitalism and the need for competition. According to Smith, without competition we get lazy and assume our infallibility. In many ways, it is easier for a smaller firm to remain more competitive than larger corporations. Decisions can be immediate with a smaller business. There is little, if any, of the red tape associated with multi-levels of management of larger entities. Turf wars are minimal. Policies and procedures are shorter and simpler. Hence, there is flexibility inherent in well-run smaller companies that major firms find difficult to compete with. Another way small businesses thrive is that their owners are close to the actual market. They are able to see opportunities that cloistered executives miss. These opportunities may lead to discovering the "market niche" that results in finding a comfortable market place for a small business. I hope that you will learn that by staying competitive big frogs in small ponds may live very well. Copyright 1999 Paul E. Adams