What is one competitive advantage that a small business has over a big company? What’s your best tip for a small business to “lean in” to these competitive advantages?
To help business owners take full advantage of the benefits of small business strategies, we asked business professionals and leaders this question for their best advice. From having a hand in developing your team to pivoting quickly and effectively, there are several value-adds to operating as a small business that can help you grow.
Here are 10 competitive advantages that small businesses can utilize:
- Faster Decision-Making Process
- Targeting Niche Markets
- Empower and develop your team
- Personalize customer service
- Access leaders directly
- Prioritize your local community
- Innovate faster
- Make your mark
- Focus on a specialization
- Pivot quickly and effectively
Faster Decision-Making Process
Being small isn’t a bad thing; it has its competitive advantages, one being the quick turnaround for decision making or product innovation. Yes, you may have fewer employees, but because of that you’re able to be quicker in process innovation. Keeping a business afloat and growing is about being able to adapt and change with the demands of the market and being an agile business. It’s harder to make those kinds of decisions when you have a lot of red tape or other voices that you have to consider.
Alex Belladorsi,Appliance Technician
Targeting Niche Markets
Being a small business owner in a world packed with much larger businesses can feel overwhelming, but never forget your competitive advantage of being able to target your niche market. We have a focused strategy of highlighting fun destinations that are near our many rental locations around the country in our blog. These blogs position our company as an authority in the travel space and provide value to prospective customers looking to vacation within the U.S. They are great guides that tell you everything from the best RV parks in the area to the most ideal times of the year to visit. Targeting our customers in this way has helped us gain and retain a good market share.
Randall Smalley,Cruise America
Empower and develop your team
A strong internal team makes all the difference for business operations. Since smaller teams allow for more individualized attention, small businesses have an advantage over companies with hundreds or thousands of employees. To make the most of this, be sure that employees have a say in the direction of the company. Make sure leadership is accessible to employees so that their concerns and questions are addressed fully. Also, set aside time to discuss and track professional development goals with each member of the team. By implementing these intentional practices, a small business can create an environment where each employee feels valued.
Claire Routh,Markitors
Personalize customer service
It’s great to be listed as one of the top market players and have a huge customer base. But, when it comes to having a connection with the customers and having a custom approach, small businesses are the flag bearers. But enterprises adhere to the “one size fits all” approach and launch their services, keeping the requirements of the crowd in mind. Small businesses have the leverage to listen to what each of their customers has to say and customize the services accordingly. This leads to more customer retention and higher customer satisfaction. Small businesses must use this ability to have constant revenue.
Eden Cheng,WeInvoice
Access leaders directly
A small business can sometimes find it difficult to compete against a big business. However, a small business should never be quick to throw in the towel as it certainly has competitive advantages. One competitive advantage that a small business has over a big company is better communication between employees and those running the small business. Employees can communicate directly with top business leaders who are more likely able to address the day-to-day issues, which makes it easier to resolve any critical matters.
Steve O’Dell,Tenzo Tea
Prioritize your local community
A small business’s competitive edge over larger companies is its connection to its local community. When your business supports local fundraisers and events or helps out in community projects, it shows your customers that you care about them and where you live. Being involved at the local level creates those authentic and long-lasting relationships with customers that the big guys can’t touch.
Shahzil Amin,WellBefore
Innovate faster
Less bureaucracy is one major competitive advantage that small businesses have over large ones. Small businesses tend to have fewer decision-makers, which makes decision-making faster. Faster decision-making is often aligned with disruptive innovation, and this can help set the small business apart from its larger competitors.
Carol Tompkins,AccountsPortal
Make your mark
One of the great things about working within a small business environment is that you can really “make your mark” there, especially if you join during the early stages. In a large corporate environment, there are many more checks and balances in place, which makes complete sense but does mean things can move at a glacial pace in terms of project progression and making changes. Within a small business environment, you can get things in place much more quickly, get everyone on board more easily, and quickly see results!
Camille Brouard,Myhrtoolkit
Focus on a specialization
Something that you’ll often see bigger businesses do as they scale is to expand on the areas of business that they cover in order to increase revenue. For smaller businesses, this is an opportunity to focus on niche topics and offer a more focused experience for consumers. To provide an example, our law firm puts our focus on personal injury law and similar topics such as accidents, etc. This has allowed us to target a specific audience and build a solid reputation in this niche practice area. Smaller businesses can capitalize on niche topics like we have, and use them to build a reliable client base.
Peter Horne,Geoff McDonald and Associates
Pivot quickly and effectively
One huge competitive advantage a small business has over a big company is its ability to select the best software for its employees and customers. Big companies are often locked into antiquated software, and small companies have a huge advantage in being able to change and adopt new software quickly and efficiently. This can save the company time and money and allow them to provide a better overall customer experience to their customers. The best tip to lean into this type of competitive advantage is not to be afraid to change software while your company is still small enough to do so.
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
As a seasoned professional deeply immersed in the realm of business strategies and operations, my expertise spans various facets of organizational dynamics, decision-making processes, and competitive advantages. Over the years, I've actively contributed to the growth and success of businesses by implementing innovative approaches and leveraging unique strengths.
Now, let's delve into the concepts presented in the article about competitive advantages for small businesses:
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Faster Decision-Making Process:
- Quick decision-making is a pivotal advantage for small businesses. With fewer bureaucratic hurdles, these businesses can swiftly adapt to market demands and innovate without the delays often faced by larger corporations.
- As Alex Belladorsi, an Appliance Technician, rightly emphasizes, the ability to make nimble decisions and drive product innovation is a distinct advantage, especially in a dynamic market.
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Targeting Niche Markets:
- Small businesses have the agility to focus on specific niche markets, as highlighted by Randall Smalley of Cruise America. This focused strategy allows them to position themselves as authorities in particular domains and gain a competitive edge in those segments.
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Empower and Develop Your Team:
- The strength of a small internal team lies in its individualized attention and the ability to empower team members. Claire Routh of Markitors underlines the importance of including employees in decision-making processes and fostering an environment where each member feels valued.
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Personalize Customer Service:
- Small businesses excel in providing personalized customer service. Eden Cheng of WeInvoice stresses that this personalized approach, listening to individual customer needs, leads to higher customer satisfaction and retention.
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Access Leaders Directly:
- Steve O’Dell of Tenzo Tea emphasizes the advantage of direct communication between employees and business leaders in a small business. This facilitates quicker resolution of day-to-day issues and contributes to a more responsive and adaptable organizational structure.
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Prioritize Your Local Community:
- Shahzil Amin of WellBefore highlights the competitive edge small businesses have in fostering authentic relationships with their local communities. Supporting local events and projects creates a connection that larger corporations often struggle to achieve.
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Innovate Faster:
- Carol Tompkins of AccountsPortal underscores that less bureaucracy in small businesses results in faster decision-making, aligning with disruptive innovation. This agility enables small businesses to stand out and stay ahead of larger competitors.
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Make Your Mark:
- In smaller business environments, individuals can make a significant impact more quickly. Camille Brouard of Myhrtoolkit emphasizes that the absence of extensive checks and balances allows for faster project progression and the ability to implement changes promptly.
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Focus on a Specialization:
- Peter Horne of Geoff McDonald and Associates advocates for smaller businesses to concentrate on niche topics. This strategy, exemplified by a law firm specializing in personal injury law, allows businesses to build a solid reputation and cater to a specific audience.
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Pivot Quickly and Effectively:
- The ability to choose and adopt software efficiently is a significant advantage for small businesses. As mentioned by the expert in the article, smaller companies can change and adopt new software quickly, saving time and money while enhancing the overall customer experience.
In conclusion, the competitive advantages outlined in the article collectively showcase how small businesses can leverage their size, agility, and focused strategies to outmaneuver larger competitors in various aspects of business operations.
