Little Guy vs. Big Guy

August 25, 2015

How does a small, privately owned business or SME (small to medium-sized enterprise) compete against a national company? Is it even possible? Considering the following statistics reported by the U.S. Small Business Administration, it must be possible:

  • US small businesses employ about half of the nations private workforce.
  • Over 99% of all businesses with employees are small.
  • Businesses with fewer than 100 employees have the largest share of small-business employment.

Whether a business is a small retailer trying to compete against a national chain or big box store, an independently owned service business trying to compete against a national service provider, or a small locally owned manufacturer trying to compete with a multi-national company importing foreign made goods, the solution to competing profitably is not going head-to-head with the “big guys.” Small businesses will never win with this type of “combat” style approach. A small business will never have an equal marketing budget, same number of suppliers, distribution network, lowest cost, or number of employees to remain open for the same number of hours as national competitors.

Small businesses, therefore, must compete in other ways that are normally “out-of-reach” for the nationals. Customers and clients thrive on feeling special. Rather than a small business trying to compete on a level playing field with larger competitors, the goal should be to make the playing field “not so level” by taking a different approach to business operations.

Customer service - What can be lost in dealing with a national company can be gained by dealing with a small business. When a small business adopts a “customer first” philosophy, it can beat most nationals that do not operate with the same attitude. Customer service might be following up after a sale, calls or emails when new products or services are available, or handling customer issues on a priority basis. Overall, excellent customer service is treating customers with appreciation and respect…as if, they are the reason the business is in existence!

Customer service, of course, does not come automatically. It must be instilled in employees. They must be taught how to treat customers. Small businesses can excel in this category and far outshine a national competitor when owners and employees understand that customers are the sole reason a business opens its doors every day.

Specialized services - Although it is not possible for many nationals to offer specialized services, small businesses can do this quite easily depending on the products or services offered. Products may be specially designed or modified in some way to meet particular customer requests. Services may, likewise, be tailor-made to be more adaptable to exactly what a customer needs. Along with specialized services comes a higher price. Customers are willing to pay more for quality, i.e. specialized services.

Uniqueness - A competitive advantage is not achieved by being the same. The marketplace rewards businesses that demonstrate they are better or different than their competitors. Uniqueness shines for small businesses that concentrate on quality and distinctiveness...and promote these qualities in their marketing efforts.

Adaptability - The marketplace is a fast-changing environment, and a small business can use this to its advantage. With social media, research capabilities, and communication through technology, a small business can make quick decisions to adapt to changing markets. Avoiding multiple levels of organizational approval, an owner can decide in an "instant" to change products or services, promotions, marketing campaigns, pricing, or warranties. Whatever is important to the marketplace at the time, a small business owner can rapidly adapt to reap the profits.

So, the little guy can compete with the big guy and win, but there must be a distinction between the two. If you're a small business owner, understand what is necessary to gain a competitive edge over a larger competitor. You might be in the same arena but that doesn't mean the fight has to remain the same.