Just because your competitor is bigger than you are, doesn’t mean they’ve won. It just means they have an advantage or two, so do you. You might have to work a little harder to out smart, out market and out perform them, but it’s possible if you’re strategic enough.
So what do you do if you find yourself up against an Econet or Pinnacle Properties or some other big business that makes more money in a day than you do in a year?
It’s not as hard (or as easy) as you might think. The main thing is to take stock of the natural competitive advantages a small business has over a large one.
1) Small Businesses Have Tiny Overheads. Keep them that way. Share a car with the driver. Don’t buy a property, rent one. Hire people who can do more than one thing – except where a specialist is absolutely necessary. Make sure you only engage in results based marketing. Pay people for results, not work. Keep your overheads low, it’s a huge advantage.
Why is this an advantage? Because you need to make less sales to break even and make a profit.Over time big businesses get careless about how the spend their money. They buy things, hire people and use strategies that don’t yield maximum results. Take advantage of that.You can take advantage of opportunities that aren’t worth the effort, time or risk for big businesses. Do it.
2) Small Businesses Have Nothing to Lose! Seriously. If you’re tiny or a start-up, you can afford to try things big businesses would not even dream of. You can risk brand, reputation and sales on things they can never try. Big businesses typically have made their money doing certain things, when things change they’re often the last to notice or embrace the change. What will the share holders think? What will our many customers, partners and suppliers think? All you have to do is wake up in the morning and decide.
3) Small Businesses Are Faster. I’ve written before about why speed matters so much in business. Big businesses are like big wrestlers. Slow. Slower than small business. No major decision can be made in a day. The committee only meets on Thursdays. The shareholders will need to vote first. The Marketing manager has to prepare a presentation first – but he can’t present anything until the director comes back from Holiday! All sorts of policies, procedures and systems (and fears) that seem efficient, actually make them slow.
All you have to do is say “Hey Bob, what do you think of this idea?” Ok, let’s do it! For example, most big businesses plan their marketing activities and budgets early in the year. Once those are settled, they’re not very good at taking advantage of things that come up on the fly. You can.
Small Businesses Are Less Wasteful. Why are big businesses typically not very good at marketing? Well besides useless advertising agencies – they also have marketing managers that are too afraid to think outside the box (because the Finance director is too afraid of risk). Not only that but Mr Marketing manager’s salary isn’t aren’t based on results. Yours is. Big businesses are often too big to even notice if an advert they run doesn’t work.
But for a small business, like yours – you feel it immediately. Many times it’s your personal number that goes into the advert so you know and can learn faster what works and what doesn’t. You also have less money to throw around and that naturally makes you keen to make sure you get the best results. Combine all these advantages with solid, results based marketing (something big businesses aren’t very good at)
Of course all the above won’t make it easy, but it’s a lot better than trying to model your business after the big dog, instead of taking advantage of the fact that you’re smaller, leaner, meaner!