In the previous post we mentioned that it is possible to beat your larger competitors and own a successful small business. Many small business owners are scared of their large competitors because of their wrongful perception that large companies can use their size and vast resources to drive smaller rivals out of business.
We described why this is not true in the last post. Here we will take it one step further and show how you can beat those larger rivals.
- Find a niche – While Wal-Mart excels at selling everything under the sun at low price they do have gaps in their business model that small businesses can exploit. You just have to look carefully to uncover them. The gaps could come from many different directions. They could be in terms of product selection, target customer base, distribution, price and so on. You are bound to find opportunities if you pay careful attention. Many large, successful businesses of today got their start by focusing on a niche not fulfilled by larger rivals. Whole Foods succeeded by targeting upscale customer base with exotic and organic selection of foods. Dell beat IBM by letting customers build their custom computers and selling them by mail order instead of in stores. Here are more examples of companies that succeeded by finding and exploiting a niche.
- Think different – This goes in conjunction with the earlier strategy. You cannot win the game by mimicking what your larger rivals are doing and trying to outdo them. You will never win. You cannot offer your products at a lower price than Wal-Mart. You just don’t have scale required to do that. You can win, however, by changing the rules of the game. You have to think out of the box and build your business on alternate framework. This is what Amazon did when they started by selling books online without keeping the inventory in the warehouse and instead delivering them directly from publishers.
- Focus on customer service – As mentioned in the previous post t large companies can never provide friendly and personalized customer service at a level that you as a small business can provide. Do whatever you can to keep your customer happy and they will keep coming to your business. Look at this post for ideas on how to focus on customer service.
- Involve in the community – You can improve sales significantly by getting involved in the community as shown in earlier post. Customers want to patronize businesses that they feel are part of their community. When they see your business sponsorship in various events, schools, library, etc. it will create positive image for your business in their minds. Community involvement is more than just donating money. It is about being part of the committee, providing free seminars, participating in fund raisers and so on.
Have you succeeded against large rivals by using these or any other strategies? Let us know in the comments.
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