It's good to know your competition —their weaknesses and best practices — so you can improve your own business. But should you be friendly with your competitors? Yes, says Victoria Downing, consultant to the remodeling industry, author, and REMODELING contributor.

Take Art Elliott, owner of Shelter Associates, and Rudy Klein, owner of Klein's Home Improvement, for example. Their Coeur d'Alene, Idaho, market is small, and competition for business can be tough.

The two became friendly in the early 1990s when Klein was relatively new to the area. “I got tired of trying to make money in this town, and I had coffee with Art,” Klein says. “I asked him, ‘Do you have the same problem I have — making money?'”

Once Klein broke the ice, the two began exchanging information about subs, referring clients to each other, offering advice on construction problems, and sharing information gleaned at conferences. “The key,” Klein says, “is mutual respect.”

Elliott does more new-home building than remodeling and Klein has a restoration division, so each remodeler benefits from the other's particular knowledge. But they do bid against each other at times. Elliott is alright with that: “We know we're comparing apples to apples,” he says. “The clients will get the same level of quality regardless of who does the work. Everyone is better served by us being friends.”

Downing agrees. “Sharing information with friendly competitors helps you understand the market movement better — ‘Is it just me who's seeing the downturn or is everyone?' And it can open up new resources for subs and suppliers,” she adds. “It's usually better to be friendly and supportive since it raises the standards for everyone in the market.”