How to Deal With Copycat Competitors

Imitation may be a form of flattery, but for a small business, it is also a threat.
stealing business idea
Don’t let “Johnny-come-lately” competitors steal your ideas or copy your strategies. Protect your brand’s interests with these tips. (Photo: Shutterstock/Mavadee)

You’ve put time, money and a lot of love into building a great business — so great, in fact, that others are trying to steal your ideas or copy your strategies.

Imitation may be a form of flattery, but for a small business, it can also be a threat. Copycats often wait on the sidelines while you put in the hard work and endless hours to build your company, but as soon as your idea succeeds, they want a slice of the pie.

As a small business owner, how do you deal with a competitor who starts to mimic what you’re doing? Follow these tips to stay ahead of the game and protect your interests.

What is intellectual property?

Ben Byrd

“The most important thing is to look very carefully at your business before you have a copycat and identify what it is that makes your business valuable,” said business attorney Ben Byrd. (Photo: Ben Byrd)

The word “property” brings to mind a physical or tangible asset, like a building, piece of land or inventory. But, according to business attorney Ben Byrd of Friend, Hudak & Harris LLP, property can also be understood as a bundle of legal rights.

Related: How to Manage Your Small Business’s Fixed Assets

“Intellectual property is a cluster of rights that apply to products of the human intellect,” he explained. “We normally think of intellectual property rights as patents, copyrights and trademarks, but there are other rights that can be thought of as intellectual property, such as trade secrets [like secret recipes, innovative processes, etc.].”

Identify what makes your business valuable

The first step to protecting your business ideas and products from copycats is by building a strong brand.

“The most important thing is to look very carefully at your business before you have a copycat and identify what it is that makes your business valuable,” said Byrd.

Related: 7 Small Businesses with Killer Value Propositions

Travis Lindsay is an entrepreneur in residence for the Center for Entrepreneurship and CSUF Startup Incubator at California State University, Fullerton. Lindsay has worked with hundreds of entrepreneurs to move successful startup strategies from concept to launch. The key, he said, is building a solid brand and being innovative.

“When you are building your brand, make sure to boil what your company represents down to its essence. As Simon Sinek says, ‘People don’t buy what you do, they buy why you do it.’”

First focus on what makes your small business unique, then follow that up with a strong brand image, Lindsay advised. He gave the example of a business that makes homemade hot sauce.

“The flavor of that hot sauce may not be obviously different from the flavor of other hot sauces on the market. But effective marketing and branding can create a tremendous amount of demand for a particular brand of hot sauce.”

Related: 4 Tips for Showcasing Your Brand’s Personality

lawyer business card

Entrepreneurs should pursue any legal protections reasonable for your business, so if a copycat arrives on the scene, you’re ready to seek a legal remedy. (Photo: Shutterstock/Africa Studio)

Consult with an attorney

Intellectual property laws are intricate and complex, so your best bet is to get advice from your small business lawyer.

Added Byrd: “The best course of action is to engage an attorney to help you identify and protect your potential intellectual property long before a copycat is on the scene. If there is already a competitor that poses a threat, it is never too early to get an attorney involved.”

Once you’ve identified a unique element of your business you wish to protect, an attorney will help you determine if it is protectable by law and help you follow the proper steps for safeguarding your property.

“For example,” said Byrd, “if your business’ success rests on your family’s hot sauce recipe, you probably aren’t going find a lot of protection in patent law. However, a good lawyer may be able to help you put in place confidentiality agreements with key employees that reduce the risk that someone will be able to walk off with your recipe and start a competing business.”

Your attorney can also secure the proper trademarks, service marks and copyrights to help ensure your brand is protected.

Related: 3 Ways Your Business Might Be Violating Copyright or Trademark Laws

“When it comes to marketing, the most important right would be the right to a trademark or service mark,” Lindsay said. “Trademarks and service marks allow a business to give their business, and the products or services they provide, a unique identity that separates them from competitors’ products and services, especially those that might be very similar in form or function. Trademarks can also protect slogans and logos that are an important part of marketing.”

He advised entrepreneurs to “pursue all of the legal protections that are reasonable for your business.” That way, if (or when) a copycat arrives on the scene, you’re ready and obligated to seek a legal remedy.

“None of this guarantees success,” he said, “but by being innovative and having a strong brand, you will give your business its best chance.”

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