Competing against big companies is intimidating even for the most experienced entrepreneurs. But bigger isn't always better.
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Small businesses can compete - and win - against bigger companies by leveraging the strengths and strategies that distinguish them from their larger peers.
Small businesses can compete against the big boys by focusing on niches within the larger market. These niches can be based on geography, product lines, or other market segments. What you specialize in isn't nearly as important as making sure it is profitable and that your company delivers it better than anyone else. Large companies may have larger product lines, but on a product by product basis they cannot compete with smaller businesses who have cornered a market niche.
2. Customer service
Large companies frequently struggle to provide personalized attention to their customers. On the other hand, small businesses have earned a reputation for their ability to treat their customers with a personal touch. Leverage that ability in your advertising and customer referral programs to differentiate yourself from larger competitors.
3. Long-term customer relationships
Another small business advantage is their ability to create long term relationships with their customer base. Big companies sometimes find it difficult to develop long term relationships with their base simply because customers tend to relate to people rather than organizations. But small businesses are all about people. That makes it easy for customers to put a face on your business, thus facilitating the development of long term relationships.
4. Loss leaders
Big companies aren't the only ones who can play the "loss leader" game. Small businesses can do the same thing. By taking a loss on a few select products you can increase customer traffic and expose new customers to the big advantages your small business has to offer. You may also want to consider bundling a loss leader product with another more profitable product to minimize the overall loss.
5. Professional excellence
Small business owners possess the unique ability to exert hands-on control over the professionalism of their employees and the quality of their services. In large companies, the people at the top are often separated from the people who interface with customers by several levels of middle managers. But in smaller companies, the owners have the opportunity to regularly interface with all their employees and observe their employees' interaction with their customers. This is a tremendous advantage because your first level employees can hear directly from you what you expect from them. It also gives you the opportunity to model professionalism to your employees and encourage them to do the same.
6. Employee retention
Small businesses also have the advantage of being able to retain a much higher percentage of employees than their big company counterparts. The result is lower training costs, better service, and a healthier company overall. By taking time to develop relationships with your employees you will foster loyalty in your employees and give your business the edge you need to compete in the marketplace.