How Small Businesses Can Stay Competitive
Getting a new business off the ground can seem like a gargantuan task, so once your enterprise is up and running it may seem like nothing can stop you now. Yet entrepreneurs who let themselves be lulled into a false sense of comfort and let their foot off the pedal well know the perils that this can bring. Managing the pressures of meeting payments to creditors, keeping investors happy and finding and retaining the right talent are just a few of the common challenges you may be up against. So how do you get past these hurdles and make good on your promises to your stakeholders, your employees and yourself?
The pains and perils of a small business
The thrill that accompanies starting or running a small business is balanced in equal measure by some trepidation around things like funding, marketing, brand visibility and acquiring customers. Here are some of the common thorns on that road to bigger things. As you will soon see, your problems are not unique. And thankfully, that means there are ways to get around, over or under these obstacles when they block your way.
Tackling the big guns
First, the good news. Just because you’re small doesn’t mean you’re on weaker footing. Due to your flatter organization structure, less red tape and higher degree of control over all the moving parts, you are considerably more agile than a larger lumbering corporation. What they have in heft, you can make up in swiftness and adaptability.
However, be prepared that a big company will undercut you on pricing, outbid you on big deals and burn up thousands of dollars in advertising and marketing. If you try and match them, it could cause you to burn your entire marketing budget overnight.
Keeping the machinery well oiled a.k.a. ‘The Money Problem’
Yes. Money. Funding is one of the biggest worries for the average small business owner. How do you keep the working capital going? Having the funds to pay vendors/suppliers, partners and employees is vital. It impacts your credibility in the market. Not paying up on time can cost you not just your reputation, but also impact the rates your suppliers or lenders charge you. Money problems can also spill over to impact talent retention, marketing and every other area of your business, making it possibly your single biggest challenge.
Growing the reach of your business can be tough when your pockets don’t run that deep. You will need to compete with older players as well as larger players who have well established brands, websites, and even offline presence. How do you get a consumer to hear about you without splashing advertisements everywhere?
Hiring and retaining quality talent
Getting the best people on board and then retaining them is a huge challenge. A sound recruiting strategy needs to be part of your core business plan. Ensure there is a good rewards and recognition plan in place, have a system of bonuses and share the wealth early on. And under no circumstances should you let money troubles hinder payments to your team. Reputation once ruined cannot be undone.
Early stage growth by virtue of a passionate team, novelty or innovation in your product/service will get you good growth. But how do you keep that going and take growth to the next level?
Tips to put you ahead in the big race
Running a solid small business isn’t a sprint. To create a business that grows and builds lasting value takes time. Ensure your plans and strategy reflect this. Here’s a quick look at some ways you can make the most of being a small business to get a larger share of the customer pie.
- Target sustainable growth. There may be occasions that demand stellar growth to draw investors, but don’t do this at the cost of eroding long term value.
- Have a plan for funding. Don’t rely on investors alone. Services like Kabbage are a good backup plan and safety net. The convenient online/mobile app based platform for small business loans, enables you to get access to working capital in a quick and easy way. This is ideal for small businesses which may not have the credit scores to back big funding, nor the time to wait for the tedious paperwork involved. By following a method of online data analysis, Kabbage is able to evaluate each small business for its particular merits and assess its potential based on the health of the business and not just a credit score. And because it is a line of credit, you’re paying only for what you actually use.
- Find a niche that you’re good at and talk about it. Its important to find a little segment of the market where you establish yourself as the expert. Chances are, the bigger corporate will not want to limit itself to just one area. Let prospective customers know this is your area of expertise.
- Avoid doing what someone else is doing better. Suss out what the competition is doing and avoid choosing something they’re already known to be the best at. Unless you have found a niche that will edge them out. If not, you run the risk of getting into a price war or losing out to them.
- Get smart about your marketing. Hire digital marketing specialists to build your reputation online. Use content to drive your goals of expanding reach and credibility. While online marketing isn’t free, it is likely to give you more bang for your buck if done smartly. Recruit evangelists – people who love your service/product and are happy to talk about it on social media/blogs/videos. And remember, the sooner the better.
- Get on more channels/platforms: One of the big challenges you will face as a small business is one of reach. Thankfully mobile apps and ecommerce have proven to be a big equalizer. Work at building relationships with the big e commerce vendors and niche operators who service your target segment. Some lenders like Kabbage actually accord extra merit to businesses that are present on multiple platforms, because this effectively means better reach and potentially more sales.
- Use your agility. You may not have huge R&D budgets, but you have a passionate team of specialists. Connect with your customers regularly. Identify new problem areas, develop innovative updates and bring them out before your plus sized competition.
- Pace yourself. Don’t try and keep up with the big corporations. They can take a hit in the short run, your business may not be able to survive it. And if you must spend, keep a line of credit open with someone like Kabbage, so it doesn’t hamper working capital for your essentials.
Staying competitive and relevant to your audience in the face of copycat startups and big businesses that have millions to invest to corner you out of the market may seem daunting, but it doesn’t have to be. With the right expertise and some foresight, small businesses can overcome much that comes their way.