There’s a lot of small businesses out there. You might even be one of them. And sure, there’s a lot of headaches, such as limited resources and finances. It’s likely that part of your business plan is to become bigger.
Sometimes it can seem like the bigger companies in a market place have an unfair advantage – they can spend more on marketing, can bundle more services, have more cash for SEO, social media and other paid advertising.
And yet, all is not lost. There is a hell of a lot to be said for being a small business. Arguably, there are some clear advantages that small businesses have over their bigger rivals.
In fact, here’s our killer list of 12 commercial advantages that small businesses have over larger organisations. You can use these as part of your thinking about where you add unique value for your customers.
Let’s get to it!
1. Faster Decision Making Processes
As a smaller business, you’re more agile and can make decisions faster than a larger company. This is a huge advantage, as it means you can react to changes in the market or customer needs much quicker. You’re also not bogged down by bureaucracy – decisions can be made at a lower level, without having to go through multiple channels.
All of this means that you can be more responsive to your customers and stay ahead of the competition. This can lead to innovative products and services that larger companies may not be willing to try.
So, how can you make sure that your decision making process is as fast as possible? Here are a few tips:
- Keep communication lines open and ensure everyone has access to the information they need
- Make sure that decisions are made by the right people – those who have the knowledge and authority to make them
- Avoid indecision by setting deadlines and sticking to them
- Use technology to help you make decisions quickly and efficiently
2. Ability to Adopt New Technology Quickly
Technology is constantly evolving, and businesses that don’t keep up will quickly find themselves at a disadvantage. This is especially true for small businesses, which can typically adopt new technology faster than bigger companies.
There are several reasons for this. Firstly, small businesses are more agile and can make decisions more quickly. Typically, there won’t be lots of layers in the decision making process, which can lead to quick implementations of the right software solutions. Additionally, small businesses often have a great understanding of which technology can impact their bottom line.
Bigger companies often struggle to adopt new technology because they’re risk averse and slow to make decisions. They also have a lot of legacy systems that need to be taken into account, which can slow down the process.
So, how can small businesses adopt new technology faster than their competitors? Here are a few tips:
- Make sure you have the right team in place who are able to implement and manage new technology
- Be willing to experiment and try out new things
- Train your staff in how to use new technology
- Be proactive in seeking out new technologies that can help your business grow
- Develop a culture of innovation and learning
3. More Nimble Services
When it comes to delivering services, small businesses are often more nimble than their larger competitors. This can be a major advantage, as it allows them to react quickly to customer needs.
They are often nimbler at delivering services because they can adopt a more flexible approach to problem solving. This is due, in part, to their smaller size which allows them to be more responsive to change. Additionally, small companies typically have fewer layers of bureaucracy and can make decisions more quickly.
This nimbleness can be used to the advantage of small companies against bigger competitors. By being able to quickly adapt to the needs of their customers, small companies can stay ahead of the competition. Additionally, small companies can be more agile in their pricing, offering lower rates than larger competitors. This can help them attract new customers and retain existing ones.
All of this means that small businesses can be more responsive and stay ahead of the bigger competition. This can lead to innovative products and services that larger companies may not be willing to try.
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4. More Personalised Service
Delivering a personalised service is one of the key ways that smaller companies can compete with larger businesses. By taking the time to get to know their customers, and understanding what they need and want, small businesses can create a more tailored experience that larger companies often can’t match.
There are several factors that contribute to this advantage. Firstly, small businesses often have a more hands-on approach, with employees who are more directly involved in the day-to-day operations. This means they’re better able to understand customer needs and respond to them quickly and effectively.
Secondly, small businesses are often more agile, meaning they can adapt their services more quickly to meet changing customer demands. And finally, because they’re typically family-owned and operated, small businesses often have a more personalised approach that customers appreciate.
5. Less Process Driven
In any business, big or small, there needs to be some level of process in order to ensure that tasks are completed efficiently and effectively. However, larger companies often tend to be more process driven than small businesses. There are a few reasons for this:
Larger companies have more employees, which means that they need to have more structured processes in order to ensure that everyone is on the same page.
They typically have more complex operations, which means that they need to have more detailed processes in order to avoid any overlap or confusion.
Big organisations are often dealing with bigger budgets and more complex projects, so they need to have tighter controls in place to make sure that everything is running smoothly.
Small businesses can use this to their advantage by creating simple, streamlined processes that are easy to follow.
There’s more scope for human interaction, human intervention and human judgement in your small business.
One amusing example is from a restaurant chain that refused to change the number of pieces of popcorn on a pudding as the manual said it must have exactly 5. The customer being told they couldn’t have more popcorn because of a set of instructions in a manual wasn’t having much fun dealing with the big company.
6. More Opportunities for Growth and Expansion
Small businesses have more opportunities for growth and expansion because they can be more innovative with lower risks. They can also change their products and services more quickly to meet the needs of their customers.
Larger businesses are often bogged down by bureaucracy and red tape. They can’t pivot as quickly to take advantage of new opportunities. They are also less likely to experiment with new products or services.
Small businesses also have the advantage of being closer to their customers. They can get feedback from customers quickly and make changes based on that feedback. This is not possible for larger businesses, which are often separated from their customers by layers of management.
Small businesses also have lower overhead costs. This allows them to be more competitive in the market. They can also afford to take risks with new products and services.
7. Implement Feedback Faster
Small businesses can implement customer feedback quickly. They can change what they are doing faster than larger businesses. Larger businesses might be slower to implement customer feedback because they have more employees and it is harder to make changes.
Your sources of feedback may be less formal as a small business. For example, if you own the company and 7 or 8 customers give you similar feedback in quick succession, you might take a decision to act on it immediately. This could be something as simple as adding a follow up call after the service has been delivered.
Larger companies have more complex processes, which means they have to think through the impact on resources, budgets, projects and other workflows whenever they bring in a new change.
You can use this to your advantage.
8. Stronger Customer Relationships
One area where small businesses shine is in customer relationships. With the power of technology and creativity, SMEs can create meaningful relationships with their customers that will help them to stand out from their larger competitors.
Small businesses tend to be more agile and responsive when it comes to customer service. They are also often better equipped to personalise the customer experience due to their smaller size and limited resources.
This allows them to focus on building strong relationships with their customers, rather than simply providing generic services or products.
Furthermore, smaller businesses are typically more community-oriented, which means they can provide a sense of belonging that larger companies cannot match.
It is important to remember that customers want to feel valued and appreciated; not just given a product or service without any emotional connection.
By providing personalised services, responding quickly to inquiries or complaints, and offering unique experiences such as special events or loyalty programs, you can create strong bonds with their customers that will keep them coming back for more.
9. Lower Overhead Costs
Overhead costs, such as rent, utilities, and payroll, can be a significant expense for any business. But did you know that small businesses tend to have lower overhead costs than larger businesses? This is because small businesses often don’t need to pay for expensive office space or hire large amounts of full-time employees.
When it comes to rent, smaller companies can usually save money. This is because they don’t need as much space; they may only need a few offices or desks rather than an entire building or floor of an office building. Or they can quickly adopt more flexible working practices, such as working from home.
Additionally, they may be able to find cheaper office space in less desirable locations since their needs are not as extensive as those of larger companies.
As a result, they typically pay less in rent each month.
The cost of payroll is one of the biggest expenses for any business; fortunately, smaller companies can often avoid this expense by relying on freelancers or part-time workers instead of full-time employees.
This allows them to keep their labour costs low while still getting the job done efficiently and professionally. Additionally, smaller companies can take advantage of tax credits and deductions that are available specifically for small business owners in the UK.
10. Thinking More Creatively
When it comes to business, creativity is key. And small businesses have a distinct advantage over their larger competitors when it comes to this.
This is because small businesses often have less bureaucracy and red tape, which means they can move quickly and make decisions without having to go through a long and complicated approval process.
If it sounds right, looks right, doesn’t cost too much and could yield a good return on investment, then do it!
Additionally, small businesses typically have fewer resources, which means they are forced to be more creative in order to survive. They need to find ways to stand out from the competition and attract customers by offering unique products or services that cannot be found elsewhere.
Larger companies may have more money, but this also means they are bogged down by unnecessary expenses and procedures. This can lead to stagnation and a lack of innovation.
Small businesses are not afraid to take risks; in fact, they often rely on risk-taking in order to succeed. They know that if they don’t try something new, they will eventually become irrelevant.
This can be seen in the way they approach marketing, product development, customer service, and even office culture.
By being more creative in these areas, you can not only survive, but thrive in today’s competitive marketplace.
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11. Be More Involved with Other Local Businesses
Small businesses have a unique opportunity to become more involved in their local business community. This can be done through networking events, meetups, and other activities that allow businesses to connect with one another.
Networking is a great way to build relationships with other business owners and learn from their experiences. It can also help you create partnerships that can benefit both businesses.
Attending local business events is another way to get involved in your community. These events are often hosted by local Chambers of Commerce or other organisations that support small businesses.
At these events, you can meet other business owners, learn about new programs and services that are available to small businesses, and get advice from experts on various topics related to running a business.
You can also find out about upcoming events by subscribing to local business newsletters or following them on social media. This will keep you up-to-date on the latest news and information about the local business community.
By becoming more involved in your local business community, you can build strong relationships with other business owners, learn from their experiences, and gain access to valuable resources that can help you grow your business.
12. The Power to Disrupt
Small businesses are the dominant force in the UK economy.
Giants like Amazon and Google are still around and thriving, but it is the small businesses that are truly innovating and disrupting markets.
There are a few key reasons for this: first, small businesses can move quickly and implement ideas more quickly than their larger rivals. They have a greater understanding of their customers and what they want and are able to adapt to changes in the market more quickly.
Airbnb, Brewdog are a couple of examples of businesses that grew quickly to disrupt big industries. But you don’t need to have global domination in mind to disrupt your marketplace.
Focus on delivering greater value than your larger rivals. And offer a more convenient or affordable alternative. Both of these points are important for small businesses that want to disrupt markets.
Small Business Advantages Over Big Business - Final Thoughts
It’s not so much about the cards in your hand, but how you play them. Sometimes thinking through your points of distinction so you can emphasise these during a sale can be enough to take advantage of your size.
Other times, you might want to act on your inherent advantages – move quickly on a new product, enter a new market place, reward high performing staff.
One thing is for you – larger businesses may have more money and be better resourced, but they cannot compete with your speed. So make the most of it!