From my experience as a small business marketing consultant, and one of the reasons I began to help small business (apart from the lack of quality competition) was that small businesses generally don't consider their competion in the decisions regarding their general business offering, day to day operations and further to that, their communication.
Quite often we deal with businesses in full day strategy session and people ask me why I get so involved in their actual business and not just "marketing". I then respond by explaining to them that the reason I'm here is to assist them in their general communication of their business.
When considering what a business does in its day to day operations, it needs to consider the competition more often and competition needs to play a key role in their business going forward. Why would someone choose me over the competition, what piece of the potential clients mind do I own versus the competition. How can we expect people to choose us over the competition if we don't know what they do, and more importantly, what we do differently.