Create a unique point of difference
To compete, you’ll need to have a key competitive advantage or unique point of difference. A competitive advantage is a superior attribute that keeps bringing your customers back for repeat purchases.
Some attributes your small business could have over its bigger competitors include:
- The ability to make instant decisions as an owner-operator.
- Greater flexibility by adapting quickly to customer needs. For example, by changing products rapidly without needing to change the entire organization.
- An ideal location where foot traffic is consistently heavy.
- A pro-environmental stance that distinguishes how customers view your business in contrast to the competition.
Consult your customers
You’ll certainly have a few regulars who buy from your business often. Talk to them and ask them why they choose your business? Remember, it’s their perspective that’s important. They may be shopping with you for reasons you didn’t even consider.
Position away from your competitors
It’s important that you know who your competitors are and what they offer if you want your business to be able to compete with them, and position itself differently in the eyes of consumers. Information is power, so aim to:
- Gather data on their products, services, prices and terms of payment.
- Conduct a SWOT analysis to find out their strengths, weaknesses, opportunities and potential threats.
- Undergo their shopping experience to gain a firsthand idea of what their customers feel like when purchasing from them.
For example, if you run a small takeout pizza business, try ordering online (and over the phone) from the big players like Pizza Hut and Domino’s. Take notes on the ease of their websites and manner of their phone staff. Pick up your pizzas and deliberately arrive early to get a feel for their customer service and in-store environment.
Adopt technology earlier
If your business can take advantage of the rapid advances in online and mobile technology faster than your larger competitors, you’ll have a better chance of competing. Taking the core of your business virtual could be an option if you’re a web-based organization.
As a small business, you won’t be worried about who owns certain IP — like third-party apps, for example — whereas a larger corporation is more likely to want to develop a personalized app themselves.
In recent times, cloud-based systems for accounts, project management and storage have changed the game. What technology is on the horizon that your business could adopt early to give it a competitive advantage against larger companies in your industry?
Employ smarter tactics
You probably won’t be able to rival the financial power and access to resources of your larger competitors, so aim to be smarter by enticing customers to stick with your business for life.
A few tactics you could utilize to achieve this include:
- Promoting your products or services on the internet is one of the most cost-effective ways you can find. After all, you’ll be competing against big business advertising budgets so you’ll need to be more resourceful.
- Stocking diverse goods or offering add-on services. For example, if you owned a small convenience store, how will you compete against the giant supermarket chains? Perhaps by stocking a more niche selection of products that are harder to find in the big chains.
- Building up direct email correspondence with loyal, repeat customers. Personal communication could be a key factor here, so come up with an email strategy to keep contact with your customers and to offer special deals.
Build a strong reputation
If you’re selling B2B, aim to build a close rapport with the owners of other businesses. You could do this by ensuring you’re present at important industry events. As an owner-operator you should be able to find the time to attend such events, whereas the CEO of a larger business probably can’t.
If you are a B2C company, customers will become more and more familiar with your business and its offerings if you can develop a presence at as many major events around town as possible.
Whether that involves offering trials or samples, selling your products or services, sponsorship, or speaking engagements, it can become a simple numbers game for making your business seem bigger than it is.
If you need to travel to look larger than you are, be prepared to do so. Meeting business partners in person helps to build trust, and your reputation.
Set up an advisory group
Think about enlisting a small board of a few people (perhaps a mentor and a business partner) to keep you focused on long-term planning and to advise you on the big decisions.
You could consider meeting quarterly to discuss your larger competitors, anything new they’re doing or offering, and how you plan to continue being competitive against them.
Next steps
- Get in contact with us at Comerica if you’re planning to start up a small business.
