Small businesses need to work hard to compete with large companies that have greater operating capital, more resources, or a larger number of personnel. However, there are also some attributes of being a small business that can work in your favor. Here are some ways that you can balance your obstacles with your advantages and generate more profits.
Study the Competition
In order to be a champion of your industry, you need to know the other players. Learn about their products or services and try to identify what they do well while also looking for their weakness. To have a really competitive edge, you need to know about other business’ operational policies, staffing dynamics, and pricing.
Price Your Products or Services Wisely
When a small business is still getting off the ground, it can be somewhat difficult to manage your operating costs in a way that allows your business’ revenue to draw in substantial profit. For many customers, cost is going to be the most determinative factor when they choose a vendor or service provider. You need to price your products or services smartly and competitively. By offering competitive pricing, you’ll ultimately draw in more business. That said, you can’t set your prices so low that you’re unable to offset your operating costs or pay your staff well. You have to conduct a careful market analysis in order to choose the right price points for your business.
Generate Positive Customer Interactions
When customers work with a small business, they expect to be treated exceptionally well. Some people try to avoid working with big corporations because they feel that their business doesn’t matter to big corporations or they won’t get the attention that they want. You should refine the customer experience that your business offers to be personalized, engaging, and positive. Good customer experiences start with friendly and attentive one-on-one interactions; they’re sustained by continuous engagement attention that lets your customers know that their business matters to you. Use CRM data to use valuable information about your customers’ demographics and transaction history to stay in contact with them about sales or promotions, milestones in working together such as a one year anniversary, and even personal events in their lives like birthdays or a change in residence. Targeted email marketing generated from your customers’ data that include their names and reference their interests will help your customers feel as though they’re receiving personalized attention that they won’t get from working with bigger business.
Show Interest in Your Customers’ Businesses
If any of your customers or clients are commercial companies rather than individuals, then you may have something in common as small business owners. Ask to learn more about their business. This strategy not only helps you better identify their needs, it also presents them with an opportunity to share what they’re passionate about while also potentially networking. You may very well know somebody interested in what their business offers and be able to help them generate business. At the same time, learning about your customers’ business puts you in a position to be able to relate to your customers in a way that makes them feel as though you share common ground and it sets a great foundation for fostering a friendly working relationship.
Join Professional Associations
Getting involved with your city or municipality’s small business association and even a national small business organization can help you gain more industry knowledge. In addition, you can meet other small business owners like yourself and hear about their struggles and draw inspiration from their successes. If applicable to your business, you should also seek out business organizations that are geared towards small businesses or minorities. Being certified as a small business that is minority or women owned can help you attract more customers and can also make you more likely to receive contracts directly with your city, local government, or local nonprofit organizations.