8 Advantages of a Small Business

May 16, 2013 | By | Reply More

When a big boy moves into your territory, you have an ace up your sleeves – your size! Being a small business offers some distinct and impressive advantages.

Learn how to get the most powerful benefits from your inherent advantage in size.

small business

1. Faster response time to customer needs.

In a small company, it is less likely that difficult customer problems will fester because the owner will know sooner and take action. Big businesses often take an extended period to react to customer complaints. With no lengthy chain of command, complex bureaucracies filled with all sorts of policies and procedures common to big businesses, you can respond much quicker to your customers’ concerns.

2. You can handle clients’ questions and concerns immediately.

You can be there when all the big boys can offer is a ringing phone and a voicemail; you can be available nights, weekends and holidays. Customers know that they can get in touch easily with you – the owner – to help them solve their problems about your product or service. That is a big plus!

3. Ability to offer personal ongoing service to customers.

An extremely important advantage to being small is that you are in a better position to provide a more personal service to your customers. Customers trust businesses that offer them sincere personal attention, and they respond well to businesses that know their names and remember details about former transactions. You put greater pride in customers who say, “I’ve been doing business with this company since 1995;” whereas a mass marketing giant may less likely to care.

4. Can send the experts for a lesser cost.

Many small business owners are experts in their fields before branching out and starting a business: a small advertising business may be run by a former creative director of a large ad agency; or the owner of a video production house may formerly be a director of independent films.

You need to harness quality work, combined with reasonable fees – two important aspects that creates value and could form the basis for establishing a growing base of loyal customers. By niche marketing your services and specialty skills, your clients should see you as a specialist despite your size.

5. Lower overhead costs.

By being small, your business requires fewer resources to operate and maintain. Your lower overhead costs can allow you to offer a cheaper price, and even undercut a big competitor. You can outsell the big corporations by getting a higher percentage of business from within a very narrow niche. You can pinpoint your focus; and do well on a smaller profit margin.

6. More nimble and flexible.

Small businesses are more flexible and less bound with policies and procedures. When a customer complains to a Best Buy saleslady, for example, the customer will most likely hear the statement, “Our policies state that so-and-so.” The employees are unable to extend better customer service as their hands are tied by company policies. As a result, unsatisfied customers who perceive that their needs are not important to the company leave.

You, on the other hand, can easily provide concessions to complaining customers. To keep the customers happy and satisfied, you can adjust easily a policy; no need to go through the board or the legal department to approve any change in policies of the business. This flexibility fosters confidence and loyalty among customers.

7. Quick to react to changing market conditions.

Being flexible also relates to the ability to react quickly to changing market conditions. Because of their small size, most small companies are forced to be innovative if they want to compete. Your small business lacks the resources of larger companies, and so the only way you can compete is to come up with something creative, new, and different.

Most mass marketers cannot react as quickly to changing market conditions, but you can. You can make changes in your inventory, billing, new product or other procedures more easily in response to changing customer needs. More importantly, you can make decisions NOW!

8. Can work more closely with customers to correct the company’s shortcomings.

In large companies, there is often a wide gulf between customers and policy makers. Small business owners are often on the front line, and policies can be changed as needed immediately. To keep ahead of the game, you can monitor customer feedback, especially those who have switched from larger companies to your small business, and respond to them immediately.

The key to excel against the big boys is to do the things that they don’t do. Your small size has its advantages – way more than listed above – use them to outmaneuver and out service them every time and win the game!

Recommended Books on the Advantages of a Small Business:


Lyve Alexis Pleshette

Lyve Alexis Pleshette is a writer for PowerHomebiz.com. She writes on various topics pertaining home businesses, from startup to managing a home-based business. For a step-by-step guide to starting a business, order the downloadable ebook “Checklist for Starting a Small Business” from PowerHomebiz.com

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Category: Entrepreneurship

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