10 Secrets to Small Business Success You Should Know and Understand
Although no specific cut-off separate small business from big business, small businesses usually remain privately owned and under the entrepreneur’s direct operational control, with few employees, extremely limited and mostly single sales outlet or office, and having relatively low volume of sales and geographical coverage. Such businesses do not have the resources or economies of scale to compete with big businesses head-on. Adopting some alternative tactics however enable them to hold their own and thrive.
1. Niche
Small businesses with limited resources cannot afford to compete with the likes of Wal-Mart using their same business strategy. Offering an exceeding wide range of products remains unsustainable owing to spreading available resources very thin when supporting each of the diverse product groups. Small businesses would rather do well to develop a specific niche, such as a specific product group, or a particular customer base, and offer in-depth services that big firms with their many considerations and priorities do not provide.
For instance, a small business involved in retail clothing industry stands a greater chance of success by opening a boutique catering to niches such as ladies party wear, men’s formal wear, factory seconds goods, new born clothes and accessories, or anything else, rather than a generic store that provides all these without sufficient depth in any one category. Provide for all possible options in such niche, and undertake targeted marketing to promote such specific products to the most relevant customer base.
2. Customization
Big businesses offer standardized products and focus on mass sales rather than spend time looking into how each customer would prefer a particular product. The inclination of small businesses to cater to individual preferences places them in good stead.
The forms of customizations may include add-ons, slight modification to the product, offering only a part of a product on offer, and more. For instance, a customer may want only one-half of a pant and suit set, which a big store would rarely offer, but a small store can readily oblige. Similarly, a small store may provide the customer with a mobile phone pre loaded with selected songs and applications, something the big business may not find cost effective.
3. Personalized Service
Very often, the secret to small business success lies in personalized service. Big businesses leverage their economies of scale to provide a wide range of products at lesser prices. The very size of such businesses however infuse in them an element of bureaucracy, with sales staff forced to adhere to systems, having no power to offer on-the-floor solutions, customers having to wait in queue for hours at the cash till, and so on.
Closely managed small businesses that offer customers personalized and hassle free service stand a good chance of earning continued patronage. Offering a special discount for that special regular customer, arranging for an out of turn home delivery, deploying a staff to pay exclusive attention to a serious customer, collecting payment at the display counter if there is a long queue at the cash till, and more are all examples of small business providing flexibility to offer personalized service.
4. Customer Service
Successful small businesses offer better customer service and support. Big businesses may have toll free customer service numbers and established systems to look into customer grievance and complaints, but very often customers become more annoyed accessing such services, having to put with the automated hold instructions and then encounter a call center agent who know nothing of the business and read out instructions by rote.
Successful small businesses connect with their customers better and respond to their needs much faster and better. The manager or the entrepreneur very often addresses issues directly and takes instant decisions.
5. Hands on Approach
The success of a small business depends on the entrepreneur adopting hands on approach, involving deeply in all aspects of operations. Big businesses hire talented managers and develop systems in place that results in smooth operations. Small businesses rather center on the entrepreneur, and the staff, usually few and by no means top talent looks to the entrepreneur for all decisions. While this pegs the success of the business with the availability of the entrepreneur, it has its advantages in better control, instant decision making, and attention to detail that big firms very often miss.
A hands-on approach however does not mean micro management. The entrepreneur only needs to pay sufficient time and attention to observe and involve in the day-to-day affairs, remain available always, and provide detailed instructions to staff.
6. Marketing and Sales Channels
Traditionally, big businesses used their resources to launch extensive marketing campaign that drown small competition. The rise of internet advertising has nullified this disparity largely. The various forms of internet marketing such as social media networking, article marketing by writing blogs and populating forums, and even pay per click ads provide a level playing field for all businesses regardless of their size. Similarly, the successes of online sales depend on a seamless website, which again is a level playing field unlike brick and mortar stores.
Small businesses who adopt such low cost yet highly penetrative and effective marketing strategies and techniques stand a good chance of success. Internet marketing powered by entrepreneurs themselves may even have an advantage over the efforts of large businesses powered by an executive with many systems and procedural hurdles to overcome and policies to consider before responding to forum posts, or indulging in other forms of interactive marketing.
7. Staff
The success of any business depends on the skills, competencies, and commitment of the employees. The size of the business does not change this percept. The staff of small businesses however requires different skill sets compared to staff of large businesses. Small businesses require staff to multi-task or perform a wide range of operations. All small business staff also requires excellent communication and interpersonal skills, and the ability to think from the customer’s perspective. Most staff, even those performing support functions such as human resources and accounting comes to direct contact with the customer. For instance, the accounting staff may have to bill and collect payments from clients directly, and any customer complaint regarding as staff may come directly to the human resource executive.
Small businesses have a flat business structure with all staff reporting to the entrepreneur. This however does not preclude the establishment of systems of the staff allowed autonomy in their job function.
8. Finances
The ultimate difference between large and small businesses is difference in funding, and by extension the resources available. Availability of sufficient finance to start up the business, invest in human resources and stock, advertise, and sustain operations until the business earns positive cash flow is a basic requirement for the success of any business.
Regardless of the size of the business or depth of funding available, entrepreneurs who optimize available funds succeed. Some entrepreneurs make the mistake of trying to set up business in a scale disparate with their availability of funds and resources to finance loans. The business soon develops a negative cash flow ratio, find it difficult to repay debt installments leave alone fund operations, and soon collapse.
9. Location
As the adage goes, the success of any retail store depends on three factors: “location, location, and location.” This holds true for most small businesses regardless of the nature of operations. Even when the cost remains marginally more and options marginally less, people may still patronize a store owing to the convenience of location.
Customers patronize businesses that saves them time and provide convenience. Other things remaining constant, customers compare the time saved by approaching small businesses vis-a-vis the benefits of approaching a large business, and make a decision accordingly. Small businesses should make a similar comparison themselves and ensure that they offer customer more or at least equal value compared to their competitors.
10. Timing
Conventional stock market wisdom holds “never attempt to time the market”. Yet small businesses may at times have to do exactly that to succeed in the face of still competition and limited resources. Success may depends on their ability to use their nimbleness and instant decision making abilities to seize the moment and launch a new product first, and thereby earn valuable recognition and make it big. A classic case in point is Google. The company started from a garage but today virtually owns the internet by being among the pioneers to seize emerging internet based opportunities. Small businesses need to be alert for such lucky breaks.
An underlying thread through all these ten percepts for small business success is flexibility, or the ability to adapt to the situation as required. Big businesses find maneuverability and management by exception difficult owing to their sheer size, and small businesses that succeed usually apply these traits well to leverage situations.
References
Source: author’s experience
Image Credit: flickr.com/Dean Meyers
