A question I am often asked is; “How can a small business compete with the larger chains and multi-nationals?”
This is a dilemma for small businesses when they can’t match the budgets and resources of larger businesses. What small business operators underestimate, even larger businesses have their challenges as well. Just a different set of challenges.
Having owned a small business and worked in the corporate world in general management and as a senior executive in larger corporations, I learnt that it’s not about the size of the business, or the budget, it’s about the quality of the leadership and the quality of the people that makes a business great.
Small businesses can compete.
Small businesses can make better hiring decisions
Like many government organizations, larger businesses can be seeped in bureaucracy, particularly around the recruitment process. The larger the business, the more gaps there are in the recruitment process. Here’s an example.
I once worked for a government organization who had hundreds of policies and procedures one of which was their recruitment process.
Because it was a government organization, preference was often given to existing employees when new roles became available. What this meant was, for many years existing employees held onto their roles for they believed they couldn’t be fired. Because there was a preference to recruit from within, there was a complete lack of new blood recruited into the organization bringing alternative ideas and current market experience.
By comparison, a small business can readily go to the open market and employ fresh blood with market savvy ideas and experience. Small businesses are more nibble when it comes to recruitment and able to make hiring decisions more quickly based on your specific needs.
To compete, hire the best people you can and continually invest in their training and personal development.
Small businesses can offer different employee benefits
You might be forgiven for thinking that larger businesses have better remuneration packages. Research tells us that employees are not always motivated by money. A small business can offer other rewards such as, days in lieu, birthdays off, flexible hours that fit both the needs of the business and the employees. Employee benefits can be more flexible to attract and retain the right talent.
To compete, find out what is important to your employees, it’s not always about money. What benefits can you offer a larger business can’t?
Small businesses can empower their people
When dealing with larger organizations, you may not always get to deal with the same people depending on rostering and employee turn-over. Often you get the run-around due to lack of training and product knowledge or bureaucracy itself where employees on the ground must refer to their managers for decisions which can be time consuming. Unlike a smaller business, changing something in a larger business often involves red-tape and bureaucratic processes. Employees in the coal face are usually not empowered to make customer centric decisions. From a customer’s perspective, this can be frustrating whereas with a smaller business, decisions can be made on the spot.
To compete, learn to delegate and empower your people to make decisions on the ground without having to refer to management. Your customers will appreciate this.
Small businesses can create a passionate workforce
Passion is the key to job satisfaction regardless of the size of an organization. Creating a culture of committed employees is much more difficult with a larger business where office politics and personal agendas often get in the way. This does not translate well into providing the best customer experience.
A small business can create a passionate workforce by hiring people with great attitudes who are prepared to go the extra mile – because of the culture. Employees become like family.
They also can forge on-on-one relationships with their customers remembering, people buy from people not companies. If a small business develops personal relationships with their customers, and remembers their name, needs and wants, those customers will continue to do business with them. With larger businesses, often the service is more impersonal.
When you create a united workforce that is committed and passionate about their role, this flows over to how employees treat the customer. Their passion will demonstrate your superiority and make you a company people want to do business with.
To compete, inspire your people and give them credit for their contribution. Involve them on a weekly basis who did well and what you do better as a collective workforce.
Small businesses are more agile
Imagine you are traveling along the highway behind a huge truck and there is a roadblock ahead. It takes time for a large truck to stop, turn around and pick up speed again. A small car can stop, turn on a dime and hit the road again more quickly. It’s the same with a larger business. For them to change their strategy, it takes time whereas a smaller business is more nimble and agile.
When the market changes, savvy business people either anticipate the change or are quick to adapt to change. This is true of small business operators as they don’t have to go through a lot of red tape to bring about change. If things are going in the wrong direction, a small business can adapt to market conditions without a negative impact in a way larger businesses can’t.
To compete, stay abreast of current market trends either through industry groups, forums including networking events.
Smaller businesses can create their own niche
Larger business can’t be everything to everyone. If a small business operates in a niche market, in a unique location or offers a unique service, this can help them stand out from bigger competitors. This is one of the reasons why developing a buyer persona and value proposition is so valuable as it helps smaller businesses understand who their ideal customers are and how they can differentiate themselves from their competitors.
To compete, differentiate yourself. Carry items that are not readily available somewhere else. If you are a service business, offer a service that’s hard for larger businesses to replicate.
Smaller businesses can deliver greater level of customer service
If you believe people buy on price alone, why do some people buy a $1,000 watch when they can buy a $10 watch. Why do others buy a $1,000 suit when they can buy a $100 suit? Consider your own buying patterns. Do you always go for the cheapest, the most convenient, the best quality or do you buy because of the person serving you?
Where a big business can outspend you on marketing, it’s your ability to provide superior levels of customer service which is the real differentiator. When competing with larger businesses, remember, it’s the personal touch that counts. Remembering customers name, remembering their buying preferences, going the extra mile and thinking outside the box. Smaller businesses are not locked into one way of delivering a service. When you deliver a high quality of service, customers trust and want to support you.
To offer exceptional levels of service, ensure you involve all your employees asking for their ideas. If they are part of the solution, they will perform better at the coalface. Employees like feeling part of a team, part of a family and knowing how they perform in their role makes a difference.
To compete, involve your people in designing a customer service charter, a charter that serves as a guiding compass on how to deliver exceptional customer service.
On a final note
By using these strategies, you can compete with the big guys and still remain profitable.
In a nutshell
- Hire the best people you can and continually invest in their training and personal development.
- Find out what is important to your employees, it’s not always about money. What benefits can you offer a larger business can’t?
- Learn to delegate and empower your people to make decisions on the ground without having to refer to management. Your customers will appreciate this.
- Inspire your people and give them credit for their contribution. Involve them on a weekly basis who did well and what you do better as a collective workforce.
- Stay abreast of current market trends either through industry groups, forums including networking events.
- Differentiate yourself. Carry items that are not readily available somewhere else. If you are a service business, offer a service that’s hard for larger businesses to replicate.
- Involve your people in designing a customer service charter, a charter that serves as a guiding compass on how to deliver exceptional customer service.