Like a pesky fly that you swat, small businesses have an advantage over bigger corporations. They can target niche markets, offer specialized products/services, and build loyal customer bases.
Many people decide to start a business because they enjoy the sense of fulfillment that comes with running their own enterprise. They know they are helping the community and enhancing the lives of their customers.
Flexibility
As a small business, you have a more narrow focus which means you are much more in tune with developments within your sector. This is good because if market conditions change, you’ll be aware of it faster than a big corporation would, meaning you can take action quicker.
Small businesses also tend to be less bound by policies. This is because a policy can be amended much easier than at a large company. This can allow for a quick response to customer feedback as well as make the process of getting a job with a certain company much easier.
Being flexible as a team is vital for success. It means that everyone can work on their own terms. This is important because it makes employees feel more engaged and valued.
Independence
Independent businesses can be started without a large capital investment. For example, a small business owner making different cooking sauces can start by selling them out of her home to friends and family, then move on to farmer’s markets or retail stores. By contrast, buying a franchise or opening an existing business requires significant initial development costs.
Moreover, the employees of a small business often know each other and are familiar with their customers. This can help create a positive atmosphere in the workplace and improve employee happiness. Employee satisfaction is a major contributor to customer satisfaction, which in turn drives business growth.
Forbes Coaches Council members discuss some of the advantages that small businesses have over their larger competition and how these can be leveraged to improve their success.
Scalability
Scalability is the ability to maintain a high profit margin as production and revenue grow. This includes processes and procedures that optimize efficiency to allow growth while minimizing any negative effects. This is the hallmark of a well-managed business.
From a technical standpoint, scalability is the ability for hardware or software to respond quickly to increasing product demand, workload or scope without significant refactoring or rearchitecting activity.
From a software engineering perspective, scalability involves two key types: horizontal and vertical scalability. Horizontal scalability allows for additional resources to be added to a system, such as adding more computing power or memory, to handle an increased load. In contrast, vertical scalability requires upgrading a physical component of a system, such as replacing a less-capable server with a more powerful one.
Reputation
Often, small businesses are much closer to customers than larger companies. Consequently, it’s easier for them to spot changes in the market and respond to those changes more quickly.
Additionally, most employees in a small business know each other and a good number of customers. This personal relationship helps to create customer satisfaction, which is vital for any small business’s growth.
With less bureaucracy, it’s also more likely that small business owners are able to address customer issues directly and resolve them quickly. This is an advantage that large companies often struggle to compete with. It also gives them a reputation advantage that they can use to differentiate themselves in the marketplace. A positive reputation can attract customers to products, investors to securities and employees to jobs.
Competitiveness
Competitiveness is a measure of the ability of a nation or region to sustain high living standards. It is usually evaluated by measuring a nation’s terms of trade, which takes into account government “discounts” for exports and import barriers.
In the case of a small business, competitiveness also includes the ability to respond to customers quickly and to innovate. Small companies may be able to detect market niches that larger businesses are not able to, and they can react faster to customer problems, because of the close relationship between them.
Entrepreneurs should regularly evaluate their competitiveness by looking at the experience that they offer to their customers, the perks they have to attract and retain talent and how they can capitalize on inspiration. This will ensure that they stay ahead of the curve and that they can continue to thrive, even when faced with competition from large chains.