Fighting Back

Turning any small business into a success is tough. Doing so in a market crowded with Walmartsized competitors is especially challenging. Yet America’s 26 million small-business owners—6 million of them with payrolls to meet—take on the task every year. Thousands fail, but many of those can be attributed to small businesses failing to capitalize on their biggest advantages: size and agility. Their owners/operators fail to recognize that to sustain and grow profits throughout the up-and-down economies requires a multitasking approach that constantly adapts to market changes. Small companies today must adapt if they are going to compete—and beat—the Big Box and chain competition.

The Power of Small
Move over, Big Box retailers, multinational conglomerates, global manufacturers and regional chains, small specialty stores, corner restaurants, business-to-business local service providers and micro-manufacturers aren’t going away. In fact, they’re becoming an even bigger thorn in your side, sometimes even changing the way you do business, and enjoying their successes all the way to the bank.

Every day tens of thousands of niche businesses can and do compete successfully in today’s global marketplace packed with mega-sized competitors. Some of those small businesses crush their competition, and some become a Big Box themselves!

Small Businesses’ Big Clout
A small business typically is defined as an independent business with fewer than 500 employees. Of the 26.8 million businesses in the United States in 2006, 5.9 million of those have employees and the rest are one-person operations that may rely on contract workers, according to statistics and analysis from the U.S.

Small Business Administration Office of Advocacy. Together these small businesses power the U.S. economy. Small businesses in the United States pack plenty of punch, as reflected by statistics from the U.S. Small Business Administration:

  • Small businesses account for more than 99 percent of all employer firms in the United States.
  • These businesses employ about half of all the employees in the private sector.
  • Firms with fewer than 20 employees account for 31.2 million workers (U.S. Department of Commerce, Census Bureau).
  • Throughout the past decade, small businesses provide 60 to 80 percent of the net new jobs annually. In 2004 (the most recent data available), small firms accounted for ALL of the net new jobs. A net new job refers to new jobs in excess of the number of lost jobs.
  • Small businesses pay out close to half (45 percent) of total U.S. private payroll of $4.5 trillion.

The biggest mistake many small businesses make is thinking of themselves as small, says Martha Rogers, PhD, founding partner of Peppers & Rogers Group and coauthor of Rules to Break and Laws to Follow: How Your Business Can Beat the Crisis of Short-Termism (Wiley, 2008). “As a result, their owners think they cannot compete with bigger companies, and therefore they don’t try,” says Rogers. “Instead, they should be looking at the opportunities they have to beat large businesses at their own games.”

Building and Maintaining Your Brand
Branding is a company’s greatest asset, but a word of warning: it can be its greatest liability, too, whether you’re a small business or the Big Box competition. Even though “brand” isn’t a line item on the balance sheet, what customers think of your company, its products, its customer service, its employees and former employees, its community image and even its industry standing—all part of branding—help determine the long-term success or failure of a small business.

“Branding is just a jargon term for distinctiveness,” says marketing entrepreneur extraordinaire Jerry Shereshewsky, who also is CEO of Grandparents.com. His unique qualifications include development and marketing of successful products from Yahoo! to Mello Yello and Gevalia coffee. “There are many ways to think about brand, but it all comes down to how to stand out from the other people (businesses) who are engaged in what you’re engaged in.”

Positive Differentiation
Shereshewsky uses his brotherin- law Thomas Del Spina’s framing business as an example of positive differentiation of a product/service. It starts with the company’s name: Thomas Del Spina Fine Frames. The Connecticut small-business man markets himself and his business as a master framer as opposed to a frame shop. He positions himself as a craftsman and is very careful about everything he does that touches the customer—from business card to invoice, and everything in between. He even borrows art masterpieces from people to display in his store. His Website www.reproductionframes .com describes his business:

“Thomas Del Spina Fine Frames is the purveyor—both retail and to the trade—of the most exquisite frames available.”

Del Spina wants picture-framing to be a rich art experience rather than a carpentry job, says Shereshewsky. “You can go to Michael’s (the arts and crafts store) and get picture-framing done, and they actually are pretty good. But they will not have the range of frames and the apparent expertise of Del Spina. He’ll take a picture of your artwork and show how it looks in a particular frame on a computer screen, he will come and hang the picture, too. People pay a premium for his work, but price is almost never an issue.

“What all this does is take him out of the commodity business. That’s value added to the process. Somehow Del Spina has augmented the expected and delivered generic products with enhancements on the service package that surprise and delight the customer,” adds Shereshewsky.

Consider the creation and branding of Gevalia, the upscale coffee by mail that Shereshewsky helped launch. “We paid attention to every single detail,” says Shereshewsky. That means from product packaging, to phone center interactions, and even the design elements in the company’s invoices. All of it was designed to convey to customers that they were cared for and “cherished as a valued customer.”

This excerpt is reprinted, with permission of the publisher, from Battling Big Box: How Nimble Niche Companies Can Outmaneuver Giant Corporations © 2009 by Henry Dubroff and Susan J. Marks. Published by Career Press, Franklin Lakes, N.J., 800-227-3371. All rights reserved.

Leave a Reply

Your email address will not be published. Required fields are marked *