Running a small business may feel like an uphill battle at times. After all, large companies have some advantages on their side—such as household name recognition and the ability to offer customers a wider selection of products or services, often at lower prices.
That said, small businesses have many natural advantages over large companies that, when used wisely, can help them fend off their larger rivals, says John Jantsch, founder of Duct Tape Marketing, a small business marketing and coaching firm. “It’s important to think about how you execute on the advantages, because advantages can become disadvantages if you’re not careful,” he warns.
So, what are the advantages of being a small business, and how can a business make the most of them? Here are six:
1. Personalized service
Big companies often focus on providing services to a mass audience. Small businesses, on the other hand, can tailor their services to each customer’s or client’s needs. Consider the clothing boutique that helps shoppers find clothes that fit their personal shape and style or the accounting firm that really gets to know its customers’ unique preferences.
Small businesses need to spend time getting to know their customers—either through one-on-one conversations or surveys—so they can identify the types of personalized services that they would value most, Jantsch says.
2. Nimbleness and adaptability
Big companies are often slow to adapt to change in the market or economy, while small businesses can be far more agile. “A large organization has a board of directors and shareholders who often can’t, or won’t, take chances on the new thing, because sometimes what that new thing means is that they have to move away from something that’s been really profitable for them,” Jantsch says.
That gives small companies a head start when, say, a new trend or opportunity arises, because they can seize upon it quickly. It also puts them in a better position to change their marketing, business model or pricing structure when they have to react to a changing market or economy.
The best way to identify opportunities is to stay close to your customers and listen to what they’re asking for. “I always believe that the closer you get to your customers, the more these next opportunities or gaps are going to reveal themselves,” Jantsch adds.
3. Maximizing technology
Small businesses can now access a growing number of technologies that traditionally only large companies could afford. This includes everything from online analytics software to phone systems with advanced calling features to marketing automation platforms to augmented reality tools.
The advantage this offers is that small businesses that really understand their customers’ needs and preferences can often utilize technology in a more effective way, Jantsch says. “The democratization of technology is definitely leveling the playing field” and giving small businesses better ways to optimize their operations and customer experience, he adds.
4. Developing a niche market
Large companies often have to be everything to everybody, but a small business can focus on a much smaller array of products or services or customers. This allows them to specialize in the things they can do better than their competitors—or fill in market gaps. “A small business can survive on part of the market that a big company wouldn’t even spend their time on,” Jantsch says.
5. Depth of Experience
Small businesses are often built around the founders’ expertise. Think about an independent consultant who left a major consulting firm after many years to start their own firm. “Their clients are benefiting from that person’s many years of experience rather than that of, say, a fresh college grad who works for one of the big consulting firms,” Jantsch says. “Experience is a great point for a small business owner to be able to promote.”
More large companies, he adds, are enlisting the services of small firms and independent contractors precisely for that reason: their breadth of experience and expertise.
6. Connecting with their community
Owners of small, locally owned businesses can become mainstays in their communities, participating in events and supporting local causes. This visibility and local connection can be invaluable, but it’s important for a business owner to consider how to support their community in a way that’s meaningful to both the local residents and the business.
“You can’t just say, ‘I’m a local business, buy from me’—that’s not enough,” Jantsch says. “It’s about the total customer experience and how we connect to the brand and what it stands for.”Print this article