Have you ever been in a meeting and learned about a change to a large service provider and were frustrated to hear about the next attempt to get you to fit into a standard box? I recently attended a seminar where I was told that a major bank would make their branches 100% self-service in 10 years. I don’t know about you, but I see change as an opportunity. Whenever I hear about a large corporation making a change, forcing a box on their customers, I see an opportunity for a small business to offer services that are outside of the box.
Many entrepreneurs are scared of competing with large businesses. This scenario can be concerning, but being a small business is an advantage that can be leveraged to great success.
First let’s discuss some of the advantages and disadvantages of large businesses. Large companies have an economy of scale that gives it market power in purchasing and pricing, easier access to capital, ability to build its own service centers, etc. However, when accessing these economies of scale, large businesses create large overheads. These larger entities have sophisticated compliance protocols and their operating procedures are designed for the entire enterprise. These protocols and procedures are not often tweaked to maximize performance of local operations, leaving employees to deal with “red tape”. All of this overhead leads to slow decision making.
Corporate America is cautious and focused on the next fiscal quarter. Their short sightedness and lack of preparation for the longer-term future is a weakness that small businesses can use to its advantage. The key advantages for small businesses to exploit are as follows:
Less distractions and noise. When you work for a large company, there is always something changing that might or might not affect your particular job. These employers usually communicate this information to all their employees, so everybody sees everything, even if it does not apply to them, therefore creating an unnecessary distraction. Additionally, Corporate America serves many masters, namely the shareholders, who take views and recommend actions that they see in their best interest, short-term benefits and increasing stock price volatility among them. However, they may not be in the best interest of the client for the long term. Being able to focus with less distractions and provide better services that are focused on maintaining a long-term relationship are where small business can be very successful.
Flexibility is another key advantage. How many times have you looked to buy a service, but were required to buy other items you did not want in order to get the service you wanted? Having the ability to create a solution to meet a client’s individual requirement is key. As more and more large companies have standardized products and processes, providing gap services is going to become more and more customized, and small business can swoop in and grab this new market.
Speed of decision making is the single greatest advantage. What if you get into a competitive situation with a larger company? Whether competing for a new piece of business or hiring your next great salesperson, as the business owner and key decision-maker, you are positioned in the best possible place. You have the ability to immediately make the decision. In the corporate world, their standardized systems require them to go through an approval process in order to make exceptions to established protocols, whether this is for pricing or hiring. Being able to act faster enables you to show how you can better serve prospective customers by making much faster decisions.
CFO Shield in the business of helping small business to understand the market place, creating the strategic plan, executing the plan, and achieving the prosperity that is your goal. We leverage our offerings and enable small businesses to share in the same economies of scale that larger companies enjoy.
To find out more, visit CFOShield.com.