3 min read

SMB Competitive Advantages, and How You Can Benefit

It can be tough being a small business owner. Competition is fierce and big business is only getting bigger. But there are natural advantages to being a small business that you can exploit. Let’s explore them.
SMB Competitive Advantages, and How You Can Benefit

The prospect of competing with large corporations is a nightmare.

More and more it’s becoming an issue for small businesses, with large global businesses like Amazon competing in an ever growing number of markets. But there are ways for small businesses to stand out.

I’ve found a set of statistics that suggest where small businesses could focus their efforts in order to compete, stand out, and win. In this post, I’ll share how small businesses should consider exploring how to:

  1. Find ways to exploit the consumer preference for small businesses
  2. Shape a value proposition that aligns with consumer preferences
  3. Tailor products and services in ways large corporations can’t match

Let’s get right to it.

Find ways to exploit the consumer preference for small businesses

Turns out that consumers have a natural preference for purchasing from small businesses, when they have the option.

Here are the statistics:

  1. 46% of consumers said they were more likely to shop at a small business if given a choice.
  2. 53% of consumers say the preference for shopping at small businesses is because it helps them give back to their local community and gives them more purpose in their shopping habits.

I would speculate that this is because people are naturally wired to think locally, seek validation from participating in the local economy, and favour making their purchases from people they know and see around the community.

But it doesn’t matter why. All that matters is that around half of people will automatically prefer to buy from a local small business. You can play to this desire by designing your products and services for local tastes, infusing your marketing activities with a local flavour, and participating and being seen in your local community.

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Shape a value proposition that aligns with consumer preferences

All good businesses have a clear value proposition. It’s the reason why they stand out in customers' minds and attract new and repeat patronage. Typically these might include convenience, selection, performance and low cost. When considering small businesses, potential customers appear to have a preference.

Here are the statistics:

  1. 91% of the time, consumers will choose small businesses when convenient, and 74% look for ways to support small businesses even if it’s not convenient.
  2. 77% of people are willing to pay more if they receive excellent customer service from small businesses.

Convenience and customer service. These are two areas most large corporations can find it hard to compete as it would take a massive investment to provide convenience and a high level of customer service in every market. It suggests small business owners should be investing in these two areas to benefit from their natural advantage.

Tailor products and services in ways large corporations can’t match

We’ve touched on the opportunity for small businesses to localise products and services, where possible. That alluded to our third area of advantage a small business might look to exploit, and it’s in how they position their products and services vs. the competition and large corporations.

Here are the statistics:

  1. 48% of consumers shop at small businesses for higher-quality items.
  2. 45% of consumers shop at small businesses for personalized service.

Large companies often have to focus on a one-size-fits-all approach to product development. Part of their advantages is selling the same product or service to as many customers as possible. That’s also where small businesses can stand out and based on the statistics, consumers agree.

Catering to consumers looking for high quality and personalization are two big themes playing out across the economy and it could also be a very good way for a local small business to differentiate.

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Final thoughts

Statistics are a good place to look to understand the world around us.

The story of the statistics we’ve looked at in this post strongly suggests that a small business owner should focus on emphasising their local community engagement, invest in ways of improving convenience and customer service, and increasingly offer high-quality and personalized products and services.

This way they might take advantage of the natural advantages small businesses have compared to large corporations.

Before you go...

We all know that small business is about doing the little things right.

The little optimisations, the high-impact tweaks and the 1% gains you can make to your business to make it a little better, a little more profitable and even a little bit more pleasant to run.

I have interviewed 500+ business owners, surveyed thousands more, and I am always probing for their best tips, tricks and hacks to improve their business. There are three that stand out above the rest and I want to share them with you.

Join my email list for free and I’ll send them to you right now.