The 5 best tips to help your business to keep up with the competition.
2020 has been a challenging year for everyone in Australia, but it has never been more important for small businesses to find ways to compete with industry giants.
In fact, the latest Reserve Bank of Australia research shows that the COVID-19 pandemic has significantly affected the business sector, with small businesses disproportionately affected.
Further, around 70% of all businesses surveyed by the Australian Bureau of Statistics (ABS) in mid-June reported a decrease in revenue compared to the same time last year. On top of this, small businesses were recorded as being twice as likely to record a fall in revenue than large businesses.
Here are 5 key strategies for small business owners to implement to come out on top against the big corporations.
1. Get specific
Getting bogged down with trying to be everywhere and do everything at once is a classic mistake that many small business owners tend to make when it comes to their business’ offering. Sometimes it can help to instead hyper-focus your business on one or two niche areas. Doing this can often be a key strategic asset which sets your business apart from the competition.
Start by researching your consumers and identifying ways you can target specific, niche markets that the bigger corporations are neglecting. Once you successfully tap into a niche audience, you have a higher chance of gaining customer loyalty. And as your base grows, so will your business, and you can begin experimenting with targeting more niche markets.
2. Customer service
Speaking of loyal customers, another way small business triumphs over big corporations is through a strong customer service. It’s no secret that being put on hold with outsourced call centre teams breeds customer dissatisfaction in even the most patient of customers. Retaining a level of personal touch, attention to detail and connection with your customer and client base is absolutely invaluable.
Whether it’s through handwritten “thank you” notes with every product sold, or taking time to answer all of your client enquiries within a reasonable timeframe, small business owners who prioritise strong customer service will always come out on top over corporate giants.
3. Cut innovation red tape
A common issue in big corporations is a lack of innovation due to strict corporate structure. Anyone who’s ever worked in a big corporation will know that any innovative project you come up with will need to be approved by a conga-line of middle management and executives before you can begin working on it – if it’s approved at all.
Small business owners have the advantage of being able to cut through the innovation red tape. If you, or an employee, has a new idea, it can be executed quickly. Not only does this mean results can be reviewed faster, but improvements can be made in record time. While bigger corporations may still be in the new idea brainstorming process, your small business will be running laps around them in terms of innovation.
4. Quality over quantity
If big corporations have the advantage of being able to hire more employees, then your small business needs to hire the best employees. If you can create a strong pool of talent within your own business, you’ll not only be able to grow your business, but you may be able to pull talent away from those industry giants.
There are a few ways you can do this. These include implementing employee referral systems, hiring a third-party to write compelling job descriptions, hiring a reputable recruitment agency, utilising social media (such as LinkedIn), or attending industry-related meetups to scout for talent.
5. Boost your cash flow
It’s not just a business strategy that you need to consider when competing with big corporations. Small businesses should also consider methods of improving their cash flow to stay in the fight to begin with.
One of the biggest cash flow struggles for small business owners is getting invoices paid on time – if at all. Where industry giants have teams of accountants, lawyers and debt collectors chasing up invoices, small business owners may just have themselves. This is where invoice financing can be a strategic weapon in the fight against big corporations.
Invoice financing, also known as debtor financing, involves having a third-party financing company pay you for your outstanding invoices by using your accounts receivable as loan collateral.
They can also take over the collection process (in the case of an invoice factoring arrangement), or you can offer select invoices for payment, and retain your client ledger (in the case of an invoice discounting arrangement).
Invoice financing facilities are paying you your own money, so can be a lot easier and less stressful than taking out a business loan.