When Customers Become Competition- More Tips For Handling Competition and "Copy Cat" Play Cafe Businesses

Running an indoor playground business can be a fulfilling and exciting experience. However, it can also be challenging, as all of you listening likely know, especially when a CUSTOMER expresses an interest in opening a similar business in the same area. 

I talked about this a bit in my YouTube video recently and I was so shocked because I got SO many comments both in play maker society and on YouTube letting me know that hey, I’m not the ONLY one who feels this way. So I wanted to elaborate on that conversation a bit and give you some additional tips since this topic really seemed to resonate with you.

It's natural to feel concerned when one of your customers or someone local to you all of a sudden becomes a potential competitor, but it's important to remember that a copycat business does NOT spell the end for your own facility.

One of my absolute favorite quotes or mantras is, “good for them, does NOT mean “bad for you”. 

Even if that person DOES open up and find success, that doesn’t mean it will detract from yours. 

And even if someone beats you to the punch and opens up their facility before yours– the same applies. And if you are in the planning stages and are worried about this– don’t be. 

In fact I have another youtube video about why it’s actually the MOST difficult for the first play cafe in an area to thrive and why it can take the longest for them compared to their future competition– so I will link that one in the show notes as well if that’s a topic you’d like to explore.

And this is something that's been heavy on my heart lately because I think this is very unique to the play and party business– especially indoor play.

And truthfully, I didn't have this revelation until years after selling my business and ​​​​gaining some experience in different industries. If you don’t already know, before I decided to open my indoor playground I tried my hand at MANY endeavors. 

Just to name a few I started a wedding coordinating business, I worked with my husband reselling wholesale items on amazon, I did social media marketing and facebook ads management for all types of clients– and  I noticed that there is ONE unfortunate reality that is very specific to the indoor play industry. 

Something that not many other entrepreneurs or business owners deal with.

It seems like EVERYONE (or at least a large number of people) that comes through our doors ​thinks they can do what we do.

And many assume they can do it BETTER.

I can't tell you how many people came up to me in person or sent me a message on social media asking for help opening-- in my SAME small town! 

​While I love being open and generous with information, it can be hard to hear that every day, and feel like EVERY customer is actually a potential future competitor.

And it's not like these same people are walking into a carpet store or other local businesses and doing the same thing-- for some reason everyone assumes owning a play cafe is easy and 100% fun all the time.​ 🙄

(And if you watched my video about how hard it is to bring your kiddos to work realistically, you'll know why I had to insert that eye roll!)​​

Even if we are doing great and feeling secure with our businesses-- hearing this constantly can really start to weigh on you.​​​​​​

And honestly? It makes owning this type of business HARD.

Imposter syndrome can creep in, you might start to make decisions out of fear, and overall just NOT want to be in your space as much.​

When I was in this position, it felt like I was constantly looking over my shoulder, waiting for that next spot to launch their go fund me or post a poll in our local moms group. And it caused me to really operate from a place of scarcity and fear and it really contributed to the amount of burnout I was feeling. 

But I am here to tell you, as someone who lived through multiple copycat businesses opening up around me, all of which were led by my former BEST customers, that it is OK.

Even though a few did reach their opening day, their success did not detract from mine. We found ways to collaborate for the most part, and we still stayed booked out enough to eventually open a second location.

And those that actually ended up opening probably accounted for less than 1% of the number of people who at one time expressed interest. Of the dozens and dozens of times per week I would get asked for advice or would see people putting feelers out on social media, it was really that small of a fraction that actually came to fruition. 

If you’re already open, you KNOW how much it takes to get there. So I want you to keep those odds in mind next time you are in this situation.

But in addition to that, I want to give you some tips on how to ensure you remain secure in your business and protect your mental energy as an owner.

1) Remain Calm

First and foremost, it's essential to remain calm and level-headed. Reacting emotionally could potentially damage your business reputation, and may even encourage your competitor to move forward with their plans. Take some time to process your feelings, and then approach the situation with a clear mind. Remember, imitation is the sincerest form of flattery, and you have every right to feel proud of your business.

2) Look at the facts

The next step is to assess the situation objectively. Start by examining the competition in your area, and try to identify what sets your business apart from others. What unique features or services do you offer? What do your customers love about your playground? By understanding your strengths, you can start to devise a strategy for how to handle a copycat business. Remember that while competition can be fierce, there is always room for improvement and innovation.

3) Look at the numbers 

If you’ve taken my book more birthdays challenge, you already know exactly how many birthday parties you need to book per year in order to reach your financial goals. And you’ve likely repeated this same exercise for your other services including memberships, open play passes– all that good stuff. And by the way if you have not taken that challenge, you can binge the replay right now– it’s my FAVORITE challenge ever–just click here to get instant access.

 But to simplify it– let’s say you need to make $20,000 a month in order to be profitable. And let’s say your birthday parties account for 30% of your revenue. Without getting into all the cost and profit margin calculations we do in the challenge, I am just going to assume all of your profit margins are healthy here for the sake of time and simplification, that means you basically need to make around $6,000 per month in parties to reach your goal. 

If each of your parties brings in, on average, $500, you’ll need to do about 12 parties per month.

That’s 144 parties a year. Even in the tiniest town, I am sure each of you can find enough parties to fill your calendar.

We needed to do around 200 parties per year and maintain 100 members as our two main sources of revenue in a given year to not only break even but make enough to reinvest in our business and to pay me as the owner. Of course we had other revenue streams but those were the main 2 we focused on.

Looking at these numbers and realizing we were not a VOLUME business, made me feel so much more confident. And even with multiple new competitors we were still able to hit those numbers without a struggle once we nailed down our marketing strategy. 

You don’t need to serve every single person in your community or be the one stop shop in order to be successful, especially if you focus on big ticket and recurring revenue like I just mentioned.

It really puts the numbers in your favor when it comes to handling competition.

4) Look for ways to collaborate

Once you've taken stock of the situation, consider reaching out to the customer who expressed an interest in opening a similar business. You may find that they are more open to collaboration than you initially thought. 

Schedule a meeting with them and try to get a better understanding of their plans. Perhaps they are willing to work with you in some way, whether it's through joint marketing efforts or sharing each other's unique services that are not in competition. You might be surprised by how much common ground you have, and how your businesses may complement, not compete with, each other. 

Having said all that, if the customer is still committed to opening their own business, it's time to start differentiating yourself. Look for ways to stand out from the competition and provide your customers with an experience they won't find anywhere else. 

Consider investing in new equipment or amenities, hosting special events or themed parties, or offering classes or workshops. Focus on providing an experience that is unique, engaging, and memorable. 

Keep in mind that what sets you apart from the competition will depend on your target audience. So engage your members and your best customers and make sure you’re making decisions NOT based on fear but based on who you’re meant to serve– because again, it will NOT be everyone.

Another way to differentiate yourself is to focus on customer service. 

Provide your customers with exceptional service, and they will be more likely to return and recommend your playground to others. Train your staff to be friendly, knowledgeable, and attentive to the needs of your customers. 

Take time to engage with your customers, whether it's through social media, email newsletters, or in-person interactions. Encourage them to leave reviews and feedback, and take that feedback seriously. 

By continuously improving your business based on customer feedback, you can show your customers that you value their opinions and are committed to providing the best experience possible.

Finally, don't forget about your loyal customers. This includes your members but it can also be customers that consistently book your classes, parties– all of that 

They are the backbone of your business, and they can be your biggest advocates– when you know, they are NOT your potential future competition.

Make sure you are doing everything you can to retain their loyalty. Consider offering loyalty programs, special discounts, or other incentives to encourage repeat business. 

Engage with them on social media and encourage them to share their experiences with others– like we talk about in episode 185 all about getting your customers to create UGC or user generated content for you to use in your marketing. 

As we discussed in that episode, authentic word-of-mouth marketing can be incredibly effective, especially in the age of social media. 

By cultivating a loyal customer base, you can help insulate your business from the effects of competition.

Before I wrap this article up, I just want to remind you ONE more time– dealing with a copycat business can be a challenging experience, but it doesn't NOT mean the end of your business. 

And a teeny tiny fraction of those people expressing interest– will actually even BECOME future competition.

By staying calm, assessing the situation objectively, reaching out to them, differentiating yourself, and focusing on customer service and loyalty, you can continue to thrive in your community.

And also just remember that if this aspect of play cafe ownership makes it feel really hard and mentally draining, you are NOT alone. 

It IS hard and not many other entrepreneurs out there can really relate to this as much as we can.

One more thing to keep in mind because I know I will get questions about it– is the legal aspect of the situation.

 It's important to protect your intellectual property, including your business name, logo, and branding. If you feel that your competitor is infringing on your intellectual property, consult with a lawyer to explore your options. Depending on the circumstances, you may be able to take legal action to protect your business.

Also, make sure you're complying with all local laws and regulations. This includes obtaining the necessary licenses and permits, following safety guidelines, and adhering to zoning and land use regulations. By doing so, you can demonstrate your commitment to operating a safe and responsible business, which can help you stand out from the competition.

Alright, now that we had this little mindset adjustment together, I hope you can breathe a little sigh of relief. I wish I had done this before I sold, so I hope I was able to give YOU some comfort instead if you needed to hear it.