Many communities argue against big companies like Wal-Mart moving into their areas because they believe that these big corporations will eradicate local mom and pop stores. Granted, big, burly businesses can intimidate their smaller counterparts. But David brought a slingshot and a bag of stones to the battle. Then, he found a hole in Goliath’s armor and brought him down with a single stone. The “David’s” in the small business world are small but limber. By recognizing the holes in large competitors’ armor, you can turn your business into an effective slingshot that earns its own piece of the pie.
Smaller Can Be Better
By necessity, most large companies require vast amounts of red tape to do anything out of the norm (and often, things within the norm too). They may have more employees, but each one performs a specific task, following the company rules every step of the way. In other words, procedures, overhead and red tape all mark major holes in the big business armor.
Your small business is nimble. It can turn on a dime to respond to unique customer needs. You can shuffle your priority list to place a last-minute rush consulting project at the top of your list. You can even personally drive an emergency widget order after receiving a call to your cell phone from a frantic customer on Sunday. You are in complete control of the level of service that you provide. Your hands are not bound by red tape and that allows you to provide superior service.
Offer Value Over Low Prices
Small businesses can recognize and embrace the difference between low price and value in your customers’ eyes. Behemoth competitors like the big box stores and large banks may offer better prices, but low cost is not the best way to compete, especially for attracting loyal customers who aren’t swayed to switch companies based on the latest and greatest discount.
Customers will pay more for superior service and products. For example, you can provide additional value by offering products made in the US, beautifully packaged products, services with enhanced customer service support and more. You, as a small business owner, are uniquely able to compete on value.
Own Your Special Niche
Why would anyone want to open a coffee shop that competes with Starbucks, a company that clearly does no wrong anywhere in the world? Not so fast: in 2000, Starbucks closed 61 of the 84 stores they opened in Australia because they failed to compete with the small independent shops! They could not adjust to local market demand.
Starbucks may offer everything related to coffee, but their in-store drinks and atmosphere currently do not match the experience of the smaller shops. Like the Italian model (a country that boasts no Starbuck stores, by the way), the Australian independents offer quality over quantity — a niche that local customers want.
As a small business owner, you have the luxury of getting to know what your customers really want. Whether you provide green products or services, custom-fit the clothes sold in your store or even drive customers home on a rainy day, you can craft a differentiated selling point. Make sure that potential customers know the qualities that make your business unique and that existing customers love those points of differentiation so that they can spread the word.
Form Alliances with Other Small Businesses
Goliath competitors may have the resources to offer a full range of goods or services that you find hard to match, but you don’t have to go it alone. Networking is a powerful tool that can address the convenient, cost-effective solutions that busy customers need.
Your print shop may offer high-quality, reasonably-priced services, but perhaps it does not sport the excess real estate that allows big bruiser shops to warehouse customer brochures — often for a hefty price. But you can negotiate storage discounts with a local facility so that you can handle your customer’s printing and storage needs at a lower combined price than the competition offers.
Alliances definitely help you give customers the full services that they need. But they can also expand your customer base through referrals from your small business network. One call to your local Chamber of Commerce is a great way to set out on the road to valuable alliances.
There’s Room for Everyone
As a small business owner, you don’t need to fear major competitors. There’s plenty of room in the marketplace to provide business opportunities for businesses of all sizes. By identifying the holes in their armor and taking advantage of your unique strengths, you can carve out your own business success, even if Goliath & Associates is right across the street.