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How to Grow a Small Business and Compete with Big Companies

how to grow a small business

People often assume that small businesses are at a disadvantage when competing with big companies. After all, big companies have big company budgets for advertising. They have big economies of scale that enable them to do things faster and cheaper. They can offer lower prices that small businesses cannot match. The idea of competing with big companies is one of the reasons why people think it’s so hard to be a small business owner.

But the truth is more complicated. Yes, big companies have certain advantages that come from being big. But especially today, with the great online tools and resources that small business owners can use to make their businesses run better, it’s often possible for small businesses to beat big companies at their own game.

We talked with a few small business owners and business consultants about the best strategies for how to build a small business and compete more effectively with big companies.

How to Grow a Small Business: Business Growth Advice

Craig C. Powell, 5 Block Radius

Craig_PowellCraig C. Powell is the CEO of 5 Block Radius, a small business that provides graphic design, print brokering, web development, and social media consulting. His business competes directly with bigger companies like VistaPrint and Web.com.

You might think that in a business like printing, customers would always want to go with the big company that offers the lowest price. But Craig says that his company has been getting a lot of business from customers who used to buy from the bigger companies, but have found Craig’s company to offer better value.

“We get a lot of comments from customers, especially people who need printing for things like marketing materials and business cards, who say that they used to buy from VistaPrint or another big company, but they have a better experience buying from our small business,” says Craig. “Somewhere along the way it seemed like VistaPrint was the best and only choice for printing business cards and things like that, but many people have found that not only is the quality not always there, but the customer service is lacking. We know what we do and we love it, and we want to create those feelings for our customers too!”

Craig thinks it’s becoming easier for small businesses to compete with the big companies because some big companies get “too big” to stay connected to their customers, while at the same time small businesses can use online tools to be more productive and responsive than their small size might indicate. “I think it has gotten consistently easier to compete with big companies, because the illusion of a big company as the only one who can get quality work done for you is starting to fade,” Craig says. “People are seeing the benefits of having personal interaction with a company who cares about your project or business. When companies grow so large, they sacrifice having that connection with the customer.”

Follow Craig C. Powell on Twitter at @CraigCPowell.

Tamsen Horton, Vujá Dé Law

The legal profession is often thought of as being the domain of “bigness,” where the biggest businesses always want to hire the biggest law firms, and big-shot attorneys have the biggest billable hourly rates and earn the biggest rewards. But in the Tamsen_Hortonpast few years, the legal services industry has been undergoing dramatic changes as the traditional law firm model has come under pressure from big clients trying to rein in their legal fees, and as companies have started to use online service providers like LegalZoom to outsource some of the lower-value repetitive legal tasks that don’t require a top-dollar lawyer’s time and attention.

One lawyer who is changing the legal profession’s perspective on “big” is Tamsen Horton, a Grand Rapids, Michigan attorney and entrepreneur who founded Vujá Dé Law, with the mission of making it easier for everyone to get the legal advice and the legal protections that they need, at a reasonable cost.

Tamsen Horton’s career is living proof that the traditional “big law” era is coming to an end. “The legal industry is going kicking and screaming into the realization that it is truly a business industry,” Tamsen says. “The legal industry as we know it has already disappeared, and I’m a firm believer in small business is the future.”

Tamsen says that even with the upheavals in the legal profession, the future is bright for attorneys and business owners who can adapt to the changes on the horizon. “The world is wired for smart small businesses that can pivot quickly and respond immediately,” Tamsen says. Her business partners with a variety of other service providers and resources, to deliver legal solutions to small business owners, and with the online tools available now, it’s easier to extend the reach of her small business without having to invest in a lot of overhead costs. “I’ve automated every aspect of my business with a system, while maintaining the personal touch that helps me build trust with my clients,” Tamsen says. “For any given situation or legal problem that our clients come to us with, we only have to know where to find the solution. We don’t have to employ it, manage it, or deal with the negative aspects of it; we just hire and outsource and get the job done. We can find the right experts in exactly what we want and need.”

Tamsen’s story is a great example of how small businesses – whether in the legal profession or in any other service industry – can draw upon a rich network of collaboration online. Some of your most important business partners, sub-contractors and colleagues might live on the other side of the world and you might never meet in person. But all of these online tools and resources help make it easier for small companies to be more productive, more cost-effective, and compete with big companies.

Tamsen believes that her company is a model for the future of the legal profession. “The bookends of the legal industry right now are traditional legal services (such as the big law firms) and online services like LegalZoom,” Tamsen says. “I predict that when the pendulum stops swinging, it will come to rest in the middle – high quality legal products and services that leverage technology, allowing everyone the ability to purchase the backbone of legal protection that they need.

Follow Tamsen Horton on Twitter at @TamsenHorton.

Mike LaLonde, Londes Digital Marketing

Mike_LaLondeMike LaLonde is the founder of Londes Digital Marketing, a boutique digital agency, operating remotely and specializing in quantitative digital assessments and optimization. His business competes with big marketing firms, while also helping small companies as clients that need to compete with bigger companies.

Mike says that the key is to find a way to show why your business is different from the big players, and then find something that you do better and make that the focus of your customer interactions. “The key is finding a new spot in the market and differentiating,” Mike says. “For example, people like to compare big box retailers to specialty shops because specialty shops can’t compete on price, so they try to improve the customer experience by offering a more unique ambiance, or more personalized expertise. That logic can carry to just about any small business.”

Instead of trying to be like the big companies, it’s better to be your own unique self in a way that no other big company can replicate. And don’t worry about trying to compete on price. “It might not be price that is the most difficult competition area,” Mike says. “Large media agencies charge a lot more than we do for services. We differentiate with our nimble business model, a la carte services, and flexibility.”

Mike also suggests that small business owners should not feel like they have to make their businesses look “bigger” than they are – sometimes there is a competitive advantage for small businesses that can convey the personal touch and the real human stories behind their brand. “At the end of the day, people buy from and work with other people, not a company,” Mike says. “When we approach a design or user experience project for a small company, we’re always looking at ways to make things more personal and start to form a relationship with the visitor. Small business websites shouldn’t have a template website with stock photos, no matter
how impressive it might look. Instead, show your prospective customers pictures of the real people that they’d be working with, the city or neighborhood that you’re in, and other qualities that make the experience more unique. This type of personal touch is just as important online as it is offline.”

Follow Londes Digital Marketing on Twitter at @LondesDigital.

Joy Kakabeeke, Yoga Reflections

Joy Kakabeeke is the owner of Yoga Reflections, a yoga, barre, and pilates studio with locations in Portage, Michigan and Mattawan, Michigan. Her business competes with big company fitness chains as well as large not-for-profit organizations like Joy_Kakabeekethe YMCA and hospital athletic centers.

“It can be tough to compete with the bigger businesses and fitness facilities that often appeal to a wider demographic because of their vast offerings for fitness programs and their endless supply of capital,” Joy says. “However, there is a group of people out there who absolutely hate going to the gym because they don’t like the typical gym atmosphere of bright lights, sterile floors, the smells, the noise – and these are the people who are more receptive to being members of one of my studios.”

Joy says that she finds new customers for her small business by focusing her marketing on a very specific niche of customers and by looking for common characteristics and interests among her existing clients. “I focus on people who value preventative care and who value their health, but who do not want to be a member at a gym, and I search for commonalities among my clients so I can more effectively target this niche,” Joy says. “My business sets itself apart by offering great classes at competitive prices without any contracts, registration fees, or membership requirements, while also providing a comfortable, welcoming, encouraging atmosphere where people can really learn how to do yoga the right way.”

Joy’s business offers a personal touch and a unique sense of community that keeps people coming through the studio doors. “If you want to be anonymous, go to a gym,” says Joy. “If you want to be social and make new friends, go to a small, locally owned fitness studio. My business has the market cornered on personalized instruction. Clients learn proper techniques and modifications so they can safely exercise and receive maximum benefits.”

Follow Joy Kakabeeke on Twitter at @MattawanYoga.

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Kabbage Team

Kabbage is here not only to provide access to the small business funding you need, but to also help you grow your business through free marketing tips, webinars, tools and more. Is there something you'd like us to cover or want to get your small business featured on our blog? Send us a note at content@kabbage.com.