Having a small business may seem to put you at a disadvantage over the big ones. Unfortunately, drawbacks including insufficient funding, resources, cash flow, manpower, etc. can be valid reasons for small business owners to worry. However, there is another side to the coin. These businesses come with a set of unique competitive advantages. Competitive advantages are the benefits that set you ahead of other competitors in the market. Making the best use of the unique advantages, as many small businesses have already done, it has been globally seen how it is possible to outrun even some big brands.
Some Examples of Competitive Advantages of Small Businesses
More Scope to Focus on Unique Products
While the bigger brands mostly focus on meeting the needs of the larger group of audience, smaller businesses are more into delivering unique products to a smaller targeted consumer base. This gives the business the scope to focus more on the development of products and to give them more attention. This allows the organization to have a limited but more satisfied audience base and the customers feel more included. While on the other hand, the bigger brands have way less chance to focus on uniqueness to serve the bigger crowd.
Delivering Better Quality
In addition to the uniqueness, the smaller companies have the advantage of serving the clients with better quality service or products. Not having to worry about producing in bigger bulks, gives them the chance to improve the quality of the service. Small businesses can focus on quality rather than quality, which sets them out from bigger ones.
Focus on a Specific Niche
Bigger brands such as Apple and Microsoft produce in bulk and mostly have to design their product line in a way that can be of good use to the mass. In the process, they have to concentrate more on being a jack of all trades rather than being masters of one specific niche. On the other hand, if you have a small business, you can work on finding out the niche that suits your goal and interest the most. This opens up countless doors for you to make one single niche your expertise and to be a master of that.
Build a Better Consumer-Business Relationship
Let’s look at a real-life example. Think of the relationship you and your local grocery business owner share. In most cases, it is a reliable and well-communicated relationship shared. Now, on the other hand, think of the CEO of the brand your mobile phone is of. The CEO does not even know you exist and you never have a chance to talk to the CEO. This is where small businesses have an extra perk. These kinds of organizations make the customers feel included and can afford to have a more personal relationship.
Have a More Customer-Oriented Business
As a continuation of the previous para, small businesses maintain a more personal connection with the consumers. With the chance of having a frequent business owner-customer connection, the business gains the opportunity to get constant feedback on the use of the service or the product. This helps the business to improve in every aspect.
Accountability To the Customers
Going back to the example given, if you have an issue going on with your mobile phone and want to hold the authority accountable, it may take a long time and a long process to reach them and get your problem solved. Even with this, no one can ensure you will be able to get your voice heard. On the contrary, your local grocery owner has a bigger responsibility and accountability towards you. The businesses concentrate on limited and unique clients, which gives the customers an assurance of the business has a bigger liability.
Quick Decision-Making Process
In big corporates, for an order to be executed or to take a decision, it has to go through the chain of command and multiple filter processes. This lengthens the decision-making process of the bigger businesses. On the other hand, the smaller ones do not usually follow a strict chain of commands and as most of the time the owner is more connected to the customers, it does not take much time to take a quick decision if the situation demands it.
Get to Know Your Local Customers Better
If you have a small yet local business, you have the benefit to study your local buyers in a lot of depth. You may not have a massive client to serve, but you can have a well-established and reliable business owner in your locality. Understanding your local niche and customers puts you in a better position to excel in a smaller area.
Experiment and Innovate
If you are someone who loves to experiment with new ways and always look to try something new for your business, a small business will have a competitive advantage over your big business competitors. On a bigger aspect, it is hard to take risks and try new processes, methods, and ways to experiment. However, in your small business, you can try multiple ways to make your business stand out in the crowd.
Have a Deeper Connection with Your Workers
In a business, it is vital that you maintain a more personal connection with your workers or employees. In small businesses, it is easier for the owner to keep in touch with the human resources as they are of a limited number. This helps them feel more important and accountable. Additionally, you can take opinions from your employees in decision-making. It is proven constantly that productivity goes up when the workers are happy. This advantage can also be your strength compared with your bigger competitors.
Now we hope you understand how even smaller businesses possess some competitive advantages over the bigger brands. It is not feasible to try to directly compete against the big businesses at the first. Rather, you should study them and try to understand how and which of them can be included in a unique way to your business that suits it the best. Remember, every business is different. For starters, work on understanding the small niche or the target consumer base and try to build deeper connections with your users and workers. In the end, do not be afraid to try new ideas.
Reference
https://corporatefinanceinstitute.com/resources/knowledge/strategy/competitive-advantage/
https://www.ownr.co/blog/competitive-advantage/
https://www.engage2connect.com/2016/09/27/competitive-advantages-of-small-business/
Nishat Tarannum Mridula is a contributing writer at The Strategy Watch. She has been contributing for last two years.
Nishat is currently studying at the University of Dhaka. Even though her major is in Banking, she enjoys writing on diverse topics, starting from appliances to blogposts. She is in the middle of completing her BBA from University of Dhaka. Alongside that, she writes different types of business articles for The Strategy Watch.