It is unfortunate when small businesses close their doors due to increased competition from large brands. The bargaining power of large companies means that they can keep their costs low by negotiating better deals on leases, taxes, goods, and services. The bottom line is that their dollars go further than yours, which in turn, means they can offer better price points or upgrades that your small business cannot.
The words “we offer great service” are meaningless when the service does not come with the price and convenience of a big store. Factor in the marketing reach of larger companies, and it simply makes it impossible to stay afloat when the competition literally overshadows you. There are things that you can and should do to keep your business relevant in the era of big business. Here are a few to get you started.
Adjust to Your Clients’ Needs
I am often surprised by many small business owners’ unwillingness to adjust their business models. Instead, the make the assumption that everything is working just fine and blame the competition for their loss of business. While most customers have “shiny object” syndrome, there is a reason why the shiny object keeps their attention. The most obvious reason is that you gave customers the option to look away. Based on the changing needs of your customer, you should be able to adjust.
But to know what needs adjusting you must talk to your customers. Simply asking questions about why they do business with you can make a big difference. If the reason is convenience and another store opens next door to you, then there is nothing to separate you. Therefore, it is important to hit your customer on many levels.
If you have a small retail store, simply asking questions during check-out can go a long way. It is cost effective and does not require the customer to do anything extra. If you have a service company, you have more connection with your client and you can ask their thoughts about your business.
Adjust to Your New Environment
The one thing I see often when big businesses move into the territory of a small business is that small business gives up too easily. Frightened by the vastness of the big company, a small business owner is intimidated and assumes they cannot compete. But the truth is, you can. You have to be willing to fight for the survival of your company.
That may mean that you need to downsize and become more of a boutique. Or it may mean that you need to expand your offerings. It could mean that your target market may need to change.
If you are unsure of what to do, hire a consultant. Before you roll your eyes, let me just say that some consultants are very good at this sort of thing. They understand how to adjust a business that is being outmaneuvered by big business. Having the viewpoint of an outsider can provide a better perspective for you as a business owner.
Adjust Your Finances
Spending more or spending less is a difficult choice to make. I think the more appropriate decision is knowing where to spend more and spend less. You should focus on investments that will make your business more efficient and marketable.
Perhaps your business needs new equipment that will make it more competitive. Spending more in this area could benefit you in the long run even if the result is not immediate. Such investments can also mean that you end up spending less in wasted time and money because you can be more efficient. You can finish projects in a shorter amount of time or have fewer employees to complete a certain task.
Spending less in wages, interest, or taxes can free up additional capital. Auditing your own finances to find where you are “wasting” money can be a helpful tool to keep you from being cash poor as you invest in your company. Working with trade associations or collaborating with other small businesses in your industry can provide more bargaining power when negotiating with vendors.
At the end of the day, you have to be willing to adjust, adjust, and adjust some more. That does not mean you need to change everything good about your business. It just means that you need to be willing to make changes (as necessary) to help your business stay competitive with larger businesses.