10 Ways Small Businesses Can Compete With the Big Boys

When mass marketers like Wal-Mart and Home Depot move into town, many
small businesses become fearful for their very survival, particularly
if these businesses become direct competition. Yet despite the emergence
of these multi-million dollar businesses, many small businesses
continue to thrive and profit in the highly competitive marketplace.





You may not be able to compete with the big boys
head-on, but who says you can’t make big money? The key is to do things
that they do not do. Here are some strategies your “little” business
can survive and thrive against the big boys:

1. Provide exceptional customer service.

Treat every customer as your best customer 
and you will be BETTER than the big guys. As a small business owner,
you can concentrate on small details — every client is important, every
suggestion is heard, every phone call is important. A larger company can
afford to throw away clients if they complain. They may also not feel
the pinch of losing three or four clients a week; since they figure that
they will get them back next week –  or so they think.


Read the article “How to Knock the Socks Off Your Customers.”

2. Pamper your existing customers.

When the big boys and mass merchandisers come to town, now is the time to strengthen the loyalty of your existing customers.
One way is to develop loyalty programs designed to increase overall
satisfaction and customer loyalty. You can focus on rewarding customers
who have repeat purchases, such as discounts for frequent purchases,
special “loyal customer only” sales, or gifts to frequent buyers.


However, it is important to realize that not all freebies will work —
a free t-shirt may work for one business but customers of another
business may not find it meaningful. You must choose a program that your
clients would want and respond to positively.


Read the article “Membership Programs: Turning Occasional Buyers Into Loyal Customers.”

3. Consider collaborating with similar businesses.

Join with small rivals to form a ‘cluster’ that can act as one body to rival bigger competitors. Forming an alliance or partnership with other businesses,
even your rivals, is one of the best way to level the playing field and
compete with major players without being at a disadvantage because of
their superior size. As an alliance, you can harness some of the buying
power of mass merchandisers by teaming up with other businesses, even
just for basic supplies. This will allow you to cut down your costs and
get cheaper inventory. By teaming up with other small operators, you can
compete with big rivals by sharing the cost of marketing, such as
getting a stand in a major industry trade show – something that you may
not be able to afford on your own.


Read the article “How to Cultivate Strategic Alliances and Win-Win Partnerships“.

4. Use “loss leaders.”

A “loss leader” is defined as a product on which you lose money-but
through which you also generate sales of other products in your mix. The
idea is to price selected items at cost (or even below) in order to
entice customers to go to your store; and then hope that these customers
will buy more once they are inside the store. Another approach would be
to sell a product at a loss, bundled with another that is profitable,
such as offering “two for the price of one.” The goal is to entice
customers in with irresistible offers, that they will buy other things
more profitable to your business.


Read the article 60 Time-Tested Marketing Offers

5. Develop a niche and focus on it.

Big Boys like Wal-Mart or Best Buy have a little of everything; while
you can have a little of most things and everything of one or two types
of products. This will establish your store as the place to go when
buying those items. The way small businesses can compete is to carry
extensive items in one or two product areas. Specialize or focus on a
narrow, deep but profitable niche. 
You can win against the giants by looking for gaps in the market that
are either neglected or poorly covered by big companies. For example,
you can be the only florist in your area that has all the supplies
necessary for elegant parties — and the staff that knows how to pull it
together.


Read the article “How to Create a Profitable Niche for Your Business“.

6. Take care of your employees.

Pay attention to your employees and treat them right.
Treating employees fairly is much more crucial for a small firm. Even
with the rising unemployment, finding quality personnel is not fairly
easy for a small business. If one decides to leave your business, there
is no reserve or pool of talent. Even with a complete staff, you may
find that numerous aspects of management or operations may fall into the
lap of one person, which tends to make extreme time demands on that
person.


Read the article How to Manage Employees

7. Use technology to your advantage.

Technology, now more advanced and affordable to small and large
companies, provides the tools and power for small businesses to compete
on an equal basis wit the big boys. It is the biggest improvement to
level the field between the big and small boys. Voice mail, broadband
Internet access and two-way radios, for examples, can increase
efficiency by allowing small business owners to get more done in a
timely and professional manner. Computers also allow for more efficient
and professional customer invoicing, job pricing, and inventory
tracking. If you are still not on the Web, better start now as a web
site can provide you with an inexpensive, comprehensive, and
professional advertising in front of your customers.

8. Present a very professional image.

Small firms competing with big businesses will find that first
impressions are vital. Image is crucial to winning the trust of
potential customers and retaining the ones that you have. You must be
professional, even if you are working from your kitchen table.
Professionalism should be seen from every aspect of your business —
 from the way you dress, answer the phone, or design your business
cards. Plus, always give the impression that your business is thriving,
well established and efficient. Many customers do not mind that they are
dealing with small specialist firms; as long as the business has the
credibility that they are looking for. Think big and chances are your
customers will too.

9. Emphasize the uniqueness of your products.

People are often attracted to the idea of getting something unique
from a smaller, independently owned business, but are used to the larger
selection a chain store can offer. In your marketing and advertising
messages, highlight the originality of your stock as compared to the
universal stock a chain store offers.


Read the article Successful Brand Development: Branding Strategies for Your Small Business

10. Give your store character.

Most big retailers have the same look, often impersonal, in every
city. Make your store stand out by giving it an inviting character. Make
shopping in your place relaxing. Greet customers as they enter the
door, and let them know that you and your staff are nearby if they need
any help. Never let customers wander around the store not finding what
they need and no one to help them.


When a big boy moves into town, don’t be afraid. You may not be able
to fight big rivals on their own ground because you simply don’t have
the resources; but you can often steal a march on them by being more
agile, creative and committed.