bizi...competition can be a good thing. it can spread the word faster about what you do. you also have a HUGE edge. you have been in the business for 6 1/2 years!!
now who do you think somebody would rather go to?
it might make you think of things to do that you haven't been doing. maybe get in touch with old clients. send a thank you letter to all and give some type of incentive for referrals?
added:
have you thought of expanding? maybe this lady would make a good employee?
i know this threw you for a loop. i HATE getting calls like this out of the blue. ((((hugs))))