It always pays to keep an eye on the competition. And if you watch with a critical eye, you can often figure out a lot about your own business and prevent problems before they arise.
For example, some competition may not be performing as well as you are. Does this mean you should ignore them? On the contrary, think about it and figure out why their business isn't succeeding. Is your own business at risk for following down the same path? Are your future vulnerabilities the same as their current ones? If so, what can you do different that will prevent history from repeating itself?
What about competition that's thriving? Assess their business model. You may discover that their service offerings are more refined than yours are, allowing for a better end result with each customer. Or perhaps the opposite is true and their service offerings are more diversified, bringing in more income with each customer and by serving more needs.
And don't forget to notice the marketing and advertising strategy your competition is using. Is it clever? Is it stupid? Each time a direct competitor spends money on advertising, you're getting a free look at what not to do or what type of strategy works. Use their money to spend your own money more wisely.
Your competition can teach you endlessly if you open up your eyes. If you're a smart business owner, you'll take full advantage.