If you are intimidated by competition, you are not thinking in the right way. Yes, when a giant store like Wal-Mart opened up in a small town many local stores went out of business. But if you look around, some still managed to survive. How did they manage?
The secret to their success is simple. Small businesses are nimble. They can move fast. They can make significant changes overnight. They are also personable. They make friends fast and keep them for a long time.
“Big Businesses Are Like Dinosaurs”
By contrast, big businesses are like dinosaurs. They appear impressive, but they don’t adjust to a climate change well. It takes a lot of upper management meetings before they can agree to make any significant changes. Even when they do make a change, they roll these changes with caution. This is because there is a lot of money riding on these changes, and if they make a mistake it can cost a fortune. When Coke moved fast to wipe out Pepsi, they lost millions introducing the New Coke. Customers preferred the way Coca Cola used to taste. Coke had to introduce Classic Coke to regain lost market share.
Additionally, big businesses are not warm and friendly. They can’t afford to be. They have big payrolls and they need employees to get to work to keep the wheels of enterprise rolling. There are just too many people doing too many things to take time out to get to know their customers better. If a clerk spends too long with a customer, a supervisor will have a word with them as soon as the customer leaves.
Small Business Advantages
So, yes, a big business does have a big budget. It does have a longer marketing reach. And it does have more influence on the community. What’s more, it can serve hundreds of people a day. Yet none of this is not enough to wipe out a small business. Provided, of course, the small business handles the situation with wisdom.
When small businesses fail after a big business moves in is because they try to take the big business head on. This is rather like a Chihuahua facing up to an American Pit Bull Terrier. Sure, it’s impressive, but foolhardy. As a small business, what you lack in size, you have to make for in cunning and negotiation.
With that said, here are 3 ways you can thrive when you’re competing with a big business.
Provide Unbeatable Customer Service
As the owner of a small business, your first job is not to count the inventory. It is not to clean the counters. It is not to check up on what is happening in the backroom. And it is not to make that the vendor’s agent gets your full attention. Your first job is to make customers fall in love with your business.
Do what a big business is not willing to do—get to know your customers well and build up loyalty. Friendliness is much more than asking about a customer’s family. It can include many small details. Talk to every customer. Listen to every suggestion. Answer every phone call. Go the extra mile to fix a mistake in their order.
Wouldn’t you rather buy from a store where everyone knows you by name and goes out of their way to help you. A large business can survive losing a few customers here and there, but you don’t have the same luxury.
Go After Big Business
Small businesses should not shy away from pursuing business with large clients. Big businesses still value the personalized customer service that a small business affords. Small business owners can benefit from that. If you produce enough product for big clients, that will equal the same amount of revenue from multiple small businesses. This is one of the best ways for small businesses to stay competitive.
Use Technology To Level The Playing Field
Gone are the days when small businesses just could not afford to have the same equipment as a big business. In the industrial era, the company with the most sophisticated machines won. But now, we are in the digital age.
The computer on your desk can do the same work as the computer on the desk of a top CEO of a multinational corporation. What about software? Just access the power of cloud computing. Using Software as a Service (SaaS), you can afford to rent out the best software in your industry. The same thing applies if you need a sophisticated telephone for communication. Cloud telephone systems allow you to work smart by employing VoIP technology. When it comes to electronics, computers, communications and collaboration, you compete on an even playing field.
Make Direct Competition Irrelevant
Often, a big company can buy in bulk, making their prices cheaper. Further, they manage to seize the best locations in town, making it easier to shop there. They can also afford to advertise in a big way, making it hard to compete without a similarly impressive Scanlon plan.
How do you make this level of competition irrelevant?
While you can’t compete on price for some items, you can carry be more niche focused. Carry things that they don’t carry. Another way to make price irrelevant is by offering superior customer experience. Many people are willing to pay a little more to enjoy a little pampering.
Sometimes even location doesn’t matter. If customers prefer to do business with you, they will drive an extra mile.
As for advertising, your lower overheads make it easier to hit your bottom line. It’s easier to make a big profit. Also, there is nothing more effective than word-of-mouth advertising.
Learn From Your Competition
There is absolutely no reason to ever worry about business competition. Do you want to know why? It is simple. Competitive businesses allow you the opportunity to learn! While this may seem like an overly optimistic take on the situation, it is actually quite true. If you did not have competition, you would not ever have a way to improve your operations for maximum productivity and efficiency. This is just like public speaking – if you never do it, you can never get better at it.
Whatever you see your competition doing well, do not try to replicate it. Instead, try to learn why a particular method or process is working for them. When you know why something is working, you are better prepared to improve on that process. That will sway customers your way when they see you are offering something for a lower price or in a shorter amount of time. If you want to obliterate the competition, forget trying to replicate that process yourself. Instead, figure out why that method is working for them and find a way to make it even better. Doing so will certainly give you the leg up.