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Prospering in the Shadow of the Giants: How to Compete with Big Business

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It's never been tougher for small, independently-owned companies to do business. Between super malls, discount warehouses and boutique franchise operations, the competition has become fierce. Many small-business owners have become lost in the shuffle. In come areas, entire downtown districts have gone under.

The Silver Lining
For some small businesses, however, life has never been better. That's because they've learned how to do more than just survive in the shadow of the giants. They've learned how to thrive.

The explanation goes beyond the realization that competition, as unwelcome as it may be, challenges us to rise to our fullest potential and helps us turn lemons into lemonade.

Big discount stores and chains can act as magnets that draw more customers to an area than ever before. And that's good news for local merchants, who stand to benefit significantly. Unfortunately, these potential blessings won't just fall in your lap by themselves. There are a number of things that you as a business owner must do to capitalize on these well-disguised opportunities. (Note: Even if you're not struggling against competition from big business, what follows may still be sound advice for strengthening your company's financial position.)

Ten Ideas
Following are some practical ideas that can help you position your operations in our changing business environment.

  1. Don't just stick your head in the sand — instead, take the offense. Keep your eye on what's happening in the area and adjust to the changing playing field. Too often, when a big discounter or warehouse moves into the area, the small-business community takes either a wait-and-see position (hoping the challenge goes away) or talks itself into believing that things will somehow work themselves out. That's not much of a strategy. By the time the businesses realize the threat, it is often too late. In this respect, it pays to be a bit paranoid rather than overly complacent. Success comes to those who are alert to potential dangers to their business and are committee to overcome them.
  2. Don't get into a price war. One of the first reactions to new competition often is to start cutting prices. However, says Kenneth Stone, an Iowa State University economist who specializes in helping small towns survive the influx of mega-stores, this can be the worst thing you can do. Why? Explains Stone: Nearly 75% of all consumers buy because of value, not price.
  3. Refuse to compete at all. When you go head-to-head with a competitor, the other business sets the rules. So, why not change the rules? General Douglas MacArthur, commander of U.S. forces in the Pacific in World War II, made it a policy to go around strong pockets of enemy resistance whenever possible. He kept his eye on the ultimate goal. So should you. Sell products and services that others don't. Specialize. Review what it is that your company does - or could do - better than anybody else. That's your niche. Maybe you should go upscale and become a boutique or focus on delivery. Be creative. You know what you do best.
  4. Stress Service. Start by making fewer errors in billing, shipping and deliveries. Then go beyond that. Big discount businesses tend to be efficient, but impersonal. On the other hand, personalized service is the hallmark of the small-business.
  5. Capitalize on your unique knowledge and experience. Many small-business owners fail to recognize the wealth of information and experience they share with customers every day. Compare this to the often untrained clerks at major chains. This is value-added. For example, people don't go to a hardware store for nails and hammers; they go for solutions to their problems. Recognize the value of the ideas and information you've been giving away for years.
  6. Promote your uniqueness. It's not enough that you be different from the competition. You must make sure your customers know that you are unique. In other words, show off. Find ways to emphasize and promote what makes you special. Many experts believe that differentiation is the secret weapon in competing. It certainly can't hurt.
  7. Adjust your business hours as needed. This alone can help make you more competitive. One small-town Wisconsin business maintained traditional 9-to-5 hours for years. By shifting their hours to 10-to-7, they nearly doubled their business. Also, keep in mind that, for retailers, Sunday often produces the highest sales per hour.
  8. Check out the competition. Remember, "knowledge is power". Learn as much as you can about your competition. Write for information. Regularly visit their stores; if nothing else, it may give you ideas for your business. Many of the big stores are constantly changing and improving to stay on top of market trends. Take advantage of their research to find out what's hot and what's not.
  9. Cash in on group promotions and buying power. Join buying and marketing co-ops; rely on distributors for ideas and support. Encourage the Chamber of Commerce to do seasonal promotions.
  10. Take care of your employees. The last thing you want to see is them jumping ship for the competition. Pay them competitively. Treat them well. You'll minimize costly turnover, and have happy, productive employees.

The Bottom Line
You can prosper in the shadow of the giants. It's just a matter of being alert for opportunities, focusing on what you do best and mapping out a strategy for your success.

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Prospering in the Shadow of the Giants: How to Compete with Big Business

CONSULT AN AGENT

Please complete and send the form below and we'll have a New York Life agent in your area contact you at your convenience to discuss Guaranteed Lifetime Income solutions.

  • *
  • *
  • *
  • *
  • *
    *
  • Phone*
    - -
  • Home or work?
    Home Work
  • Best time to call
  • Birth Date
    - -
    Why?
  • (please click only once)

  • * = required

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