How entrepreneurs can stay ahead of the competition

Entrepreneurs in Illinois may want to keep on eye on what the competition is doing to be certain they are responding appropriately. However, this should drive innovation rather than reactive behavior. For example, in a bid to keep pace with budget airlines, Delta, American and United Airlines are all offering some version of a "basic economy" class. A better approach would be to innovate ahead of the competition instead of in reaction to it.

It used to be more difficult to obtain information about the competition, but today, it is more likely that a company will have more information than it needs and will need a way to identify what is most critical. There are a number of ways to do this. Keeping a friendly relationship with other entrepreneurs can be one. Discussion about the industry, mistakes made and what went right can be beneficial on all sides.

Entrepreneurs should not hesitate to invest in business intelligence. Furthermore, they should keep an eye on potential up-and-coming competitors no matter how secure their position may appear to be. Just as MySpace lost to Facebook and Spoke lost to LinkedIn, even a company that is the only significant player in an industry may be vulnerable.

In addition to thinking about competitors, an entrepreneur who is setting up a new business may also want to think about business formation and the different types of business entities. Depending on the nature of the business, how many people are involved and other factors, some entities may be more advantageous for tax or legal reasons. These choices might include a limited liability company, an S corp or a partnership. An individual might want to discuss these options with an attorney as well as other issues such as employment agreements and other contracts.

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