Many people, when on viewing a potential industry for their new business, see the established players dominating the marketplace and wonder how they will ever manage to compete when in the early years at least, their operations will be tiny by comparison.
The view can be quite daunting, particularly if starting the small business means making large sacrifices in terms of a steady income and security.
There are however advantages in being a small business which the larger players would find it virtually impossible to achieve. Realising that your new business may be able to offer a difference kind of service to the customers it attracts might not mean that market domination is imminent but it can suggest that there is a way in to even a vastly competitive commercial segment.
Enhanced Customer Service
Larger organisations frequently rely on efficient systems in order to control costs and to ensure that each sale results in a contribution to its overheads. Whilst such systems have obvious advantages in terms of profitability, these companies may also loose customers due to their systems being rigid and inflexible.
The moment a customer requests something slightly different from the norm the systems (often by design) can not cope, leaving the client disenchanted with the whole business.
Small businesses often have the advantage of being more flexible and are usually more willing and able to satisfy a customer’s exact requirements, even if this means that the theoretical costs of doing so are greater.
The business owner’s time is largely a fixed cost and therefore time spent matching a client’s specifications does not actually have a monetary penalty.
When starting a small business the owner is often delighted with any sale they can achieve as they know that as well as earning money, they are also building goodwill for potential future sales. Personalised and to a reasonably extent, bespoke customer service is often one advantageous aspect that a small business can have over larger and more established competitors.
One of the potential problems with providing exemplary levels of customer services initially is that your clients may come to expect the same in the future. As the small business gains more sales and therefore finds itself implementing greater numbers of systems to streamline its processes, the personalised touch which was once its hallmark begins to fade.
As far as the business owner is concerned, they now have an enterprise which appears to be more stable and thus does not have to bend as much to gain sales. The optimum progression would obviously to build systems that are both efficient and afford some measure of flexibility towards customer requirements.
Although this might be very difficult to achieve in practice, a business should never forget the advantages of being small and should recognise that this might be how new entrants threaten their new found market share.