Business Advantages To Being Small & How To Leverage Them
Naz Daud
As a small business, you have many disadvantages over bigger players. You have less money to play around with, perhaps less in-house skills, and you wont have as much power when it comes to negotiation either. Although there are certainly disadvantages to being a small business, there are also benefits too. In this article we take a look at what factors may be working in your favour, and how you can leverage them as a small business owner.
Know Your Customers
When youre a small business, you can get to know your customers intimately. This is something that simply isnt possible for a larger business, and is therefore something you can use to your advantage. Try to get to know your customers, what makes them tick, and what they like about the service you provide. When they get in touch, and someone who knows them always answers the phone, you have an advantage over larger companies. To make sure youre taking full advantage of this, make sure you talk to your customers and demonstrate that you understand and remember their needs.
Tailored Service
When a bigger business is asked for a service by a customer, and they dont provide it, it probably wont be worth the effort of tailoring a product or service to suit their needs. However, when youre a small business this can be perfectly feasible.
To give an example, as a t-shirt design company you might not make football shirts. And when youre a large business, it might not be worth diverging from your core focus to help someone with this need. However, as a small business, you could do this for the customer. Not only does it give you a future revenue stream, but it also provides a method for you to make money through catering to your customers needs. The ability to act fast is a great benefit of being a small business. Are you taking advantage of it?
Charge Less In The Services Industry
As a small business in retail and manufacturing, the cost of buying products and raw materials will usually outstrip labour costs. And, for that reason, a larger business will usually be able to benefit from having economies of scale. But, in certain industries, the opposite happens smaller businesses have higher margins than their competitors.
For example, a small design agency with two partners only needs to make enough money to cover the partners wages. With a larger design agency, theyll have management costs, receptionists, sales staff, marketing costs, and lots more. Therefore, as a small business in the services industry, it is possible to compete on price.
While it can be good to compete on price, especially as you try to build a customer base, its also important that your business is able to grow in the future. This means if you charge too little now, your customers might not be willing to pay more when you flourish into a big company.
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