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You are here: Home / blog / How Small Businesses CAN Compete with Big Box Companies

How Small Businesses CAN Compete with Big Box Companies

03/01/2020 By Kristen Day 4 Comments

small businesses can compete with big box businesses
How can small business compete with big box companies?

It really is quite simple. It all comes down to – working together.

But first, let’s take a look at how big boxes push the small businesses down or out of the market.

Corporate America pushes small biz down and out

They are corporate, they are nationally known companies, they provide millions of products or services across the United States and even internationally.  Because they are so big, they are able to get so many different products and typically at lower costs than smaller businesses because they order so many. Let’s look at that for a minute.

Law of large numbers

This is the theory of probability that implies that the average result of repeating something many times will increase the expected result.  When you have a large sample, you have a higher propensity of returning more stable long-term results.

Short Kindergarten version – when you can sell so many of one thing, and cheaper, your return over the long run will be greater.

Economies of scale

Due to the large buying power of corporate America and big box companies, they are able to sell more at a lower cost to get a larger expected result. However, it isn’t just from buying more, but when a company can be more efficient and scale their processes. And because they have the resources to create processes and specialists for each process, they can become more efficient. Whereas a small business owner has limited resources (and funds), limited time because they are doing it all and well, limited money.mass producing means cheaper sales and more of them

Short Kindergarten version – when you are able to mass produce something, you can sell for cheaper. On the alternative, if you can buy in mass quantities, you are likely able to purchase at a lower cost which means you can turn around and sell for cheaper and more of them.

So, pair these two together, big box/corp America has the ability to pool their resources with all of their stores (like as in Target, Walmart, Whole Foods, or even franchises and etc) to create a bigger buying power, lower costs, more efficient training systems, better technology and the list goes on, over a small entrepreneur or small retail, etc.  Then, with that lower price point, it becomes more appealing and they end up getting more purchases at that lower cost which then turns over a bigger profit in the long run.

Small business and the economy

So, how do we get small business to blow up the economy?  Well, essentially we already do! If you apply the above to businesses in general, I am sure there are more small businesses out there than larger ones. Just think of how many Tupperware, Avon, Mary Kay, brick and mortar law firms, doctors, eye doc, chiropractors, corner stores, liquor stores, sewing shops, tailors and etc there are out there.

Some numbers for perspective

While this is an old publication, as I had a hard time finding more recent ones from a trustworthy source or one I could confirm data, The US Small Business Administration had this to say in 2016:small business statistics in America

  • US had 29 million small businesses
  • 99.7% of US businesses
  • 57 million small business employees
  • 48% of US employees – private workforce
  • Small businesses created 1.1 million net jobs
  • 304,223 companies exported goods from US & of those, 97% were small firms
  • small firms generated 33% of the US total known export value

So, together we are a pretty big deal! Let’s stack that up and bomb the market!

Small businesses need to work together

While we are a force to be reckoned with, we aren’t a mighty force if we are each for ourselves. We need to help promote each other. We need to get to know other small business owners so that we can refer them to our friends and families and fellow business owners.

We all need to get out there and network with other small business owners and truly try to get to know their business and them. Networking is NOT about handing out business cards to anyone and everyone. It’s about relationships and growing those over time.

Share what you do – get out there

Be sure you, small business owner, know your sweet spot and what you are known for. What you truly love to do, are great at and can be an asset to for other small business owners. If folks don’t understand what you do, then they can’t help you sell your products or your services. Spend some time crafting your elevator speech in a way that isn’t salesy, but interests people to ask YOU more about what you do.

Speaking of salesy, nobody likes a pushy salesperson, so don’t be that guy, or gal.  Be sure you are educating folks about your products or services in a way that is more about how you can help them. As you know, it’s all about them, it’s not about small businesses and how we can make money. But it’s about how we can help solve their problem or a pain point. And with so many companies out there doing much of the same thing, you need to be sure you are selling YOU at the same time. So, what is in it for them and how you do that better than someone else.

Because at the end of the day there could be 20 products that help with inflammation, supplement your nutrition, help improve your rankings on Google, 30 ways your business leads could come in or how to grow a business. However, how they choose what they want is by that person that is selling it…. typically.  Money is a driver too but I think that most folks would spend an extra buck on something if they knew the person they were paying and knew that person had their back. If they knew that should something go wrong, they could have a conversation and make it right. That is good customer service folks, we all need to be doing that, and better!

Support local and other small businessessupport local businesses and shop local

Now that you are doing your job to be sure your message is clear, and that you are trying to meet other business owners… we need to band together and support each other better. When you are scrolling social media, be sure to share info from other small businesses. Be sure you shop local or from other small businesses when you can. When you do shop small business, and you love their product or their services, be sure you tell folks about it. Go find their reviews on Facebook, Yelp, Google or their website and share a review. Post a review about them on social media and tag them. This helps to spread the word about their business. Givers gain. So hopefully when you do this, others will do this for you. And heck, be sure you are asking for folks to leave you reviews and to share your posts, your products and services.

What the big boxes don’t have

There are several things that many small businesses do so much better that corporate America.  We need to monopolize on these things and just knock it out of the park!small business wins with relationships and customer service

  • vested interest
  • personal relationships with employees
  • customer service with customers
  • ability to customize experience
  • small business CARES!

Small biz for the win

Small businesses have a vested interest in the business and have a lot to lose if the business doesn’t work. Typically smaller businesses employees are in the same boat. Sure, they don’t have as much skin in the game as the owner, but if the businesses fails, that employee loses their job. The employees likely know who the owner is, has their cell phone number and knows quite a bit about that owner. Small businesses typically build deeper relationships with their clients and customers because they can spend that time with them and well, it’s important to the livelihood of that business. Since small businesses aren’t held to corporate or franchise standards, they are more able to cater to the customer by creating packages or the like for them.

Corp America downfall

Big box companies and corporate America doesn’t have the vested interest in the well-being of the company – unless you are on the Board, a stock owner or the top of the pyramid – CEO, COO, etc.  The average employee still has a job if the company doesn’t meet its goals. Sure, if this would to occur time and time again, there will need to be changes and some folks may lose their job but it likely isn’t as directly related because they are so big. Most employees don’t even know who the owners are, who the board is and much past a few levels of management, if that. Because the employees don’t have a vested interest, they are less likely to care about the relationship of the clients or customers. There are more policies and procedures that might hinder creating specific specials, offers or packages for customers.

Bottom line

So, this is just a small sample of the differences between small business and corporate America and big box companies, but hopefully I have sold you on the fact that small businesses CAN dominate the market.  And it should be clear that we can NOT do it alone.

  • We need to work together
  • We need to know our business so we can share it clearly
  • We need to be sure the customers are at the forefront and work those relationship
  • We need to network to get to know other business owners
  • We need to help promote other businesses (givers gain)
  • We need to shout at the rooftops about other business on social
  • We need to share honest reviews about other businesses
  • We need to take advantage of the small business benefits
  • WE ARE BETTER TOGETHER – LET’S DO THIS

If I can help you in any way, please do let me know and I would do the same. Contact me with any questions.

Kristen Day on FacebookKristen Day on GoogleKristen Day on LinkedinKristen Day on Twitter
Kristen Day
Kristen Day
CEO/Founder of A Visual Business
Kristen is a small business owner and thus dedicated to other small business owners by helping them improve their online presence with search engine optimization, social media marketing, email marketing and pay per click advertising all of which are necessary 'evils' in the digital marketing sphere but enables small business owners the opportunity to compete with larger companies. When not in the digital arena, you can find her riding her Honda VTX1300 or drinking a margarita.

Filed Under: blog, small business owners Tagged With: business services, loyalty, networking, referrals, small business

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Comments

  1. Meghan Monaghan says

    03/10/2020 at 8:16 AM

    Your post on how small businesses can compete was very inspiring! Small businesses account for so much of the prosperity in the US. However – as we both know – running a small business is tough work and many fail. As you point out, you can differentiate yourself from other brands through relationship building, networking, and being you. People buy from other people, so networking is still a really important aspect to success. Support for one another is critical, and I’m pleased to see you emphasizing that message!

    Reply
    • Kristen Day says

      03/10/2020 at 11:20 AM

      Thanks so much Meghan. I guess I could have gone onto the fact that so many think that because they have an idea or think they can do better isn’t all there is to becoming a business owner. It sure is a lot of work and so true, so many fail. But there are a ton out there so as we know, it CAN be done. Thanks for chiming in, always a pleasure!

      Reply
  2. Andrew says

    03/10/2020 at 11:06 PM

    Kristen you knocked this one out of the park!

    The section Small businesses need to work together is extremely important. I am lucky enough to be in a networking group that supports small business in our local community. We’re not a networking group who “pushes” referrals on one another – instead we focus on building relationships and trust. This formula has helped increase the networking groups members and built relationships.

    I am 100% behind you in that small businesses need to help one another. Whether providing a small tasks related to an individual’s business or consultation, we need to be there for another.

    Thought I’d share my reaction after reading the blog post.

    Reply
    • Kristen Day says

      03/11/2020 at 7:29 AM

      Thanks Andrew. Yes, we need to work together. And that’s awesome on your networking group and thank goodness it is a real networking group who gets the point of how and why to network. (not the I’m Jane, here’s what I sell and how you can help me. SMH)

      Thank you for sharing your reaction.. we are on the same page. YAY!

      Reply

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