Top 5 Tips for Small Businesses to Gain Competitive Edge Over Big Businesses

About the Author: Ashley Thomson
Ashley Thomson

Top 5 Tips for Small Businesses to Gain Competitive Edge Over Big Businesses

Starbucks, the global coffee behemoth, had their sights on being “the most successful coffee chain in Australia”. And with the Australian takeaway coffee market worth about $2 billion, that was no short order. Independent cafes were nervous as Starbucks entered the local markets with gusto… before running out of steam in 2008 and putting up the shutters on many of their stores.

But Starbucks returned to Australia, and like many big brands, their aim will be on dominating. Here are 5 tips from a business coach for small businesses – whether you’re in the business of coffee or cabinet making, trades or retail – that can help you gain competitive edge over big businesses.

Cruise liner vs speed boat

Picture this:

Remember that scene in the James Bond movie; our debonair hero is on a mission to save the world with the villain’s henchmen chasing him in hot pursuit across an exotic island. Escape is only a short distance away at the mainland; James sees a getaway at the end of the pier! He sprints down the pier and vaults into… the end of a long queue of retirees waiting to board a large, achingly slow cruise ship. Hmmn… no. We all know he vaults into a speed boat, because he’s on a mission. And that mission requires speed and control, not a slow route that was designed to serve the masses.

Big businesses are like cruise liners: built for thousands of customers, pre-set routes, every minute scheduled; great for some but not all. Small business can be the speed boat; be quick, responsive, for a few people who need it.

My advice as a business coach is to focus on outperforming in areas where your customers will value (and pay for) flexibility and agility.

Tip: Want to be more agile and responsive? Map out the steps in your core processes (i.e. the ones that are involved in delivering your service/s products to customers).  Look for ways to speed them up – can you take out steps, reorder them or do some in parallel? reduce. Document these and build training and processes to encourage the team to adopt these methodologies.

Meet the Team

People buy from people they trust. Because science. Research shows that familiarity actually breeds likability. This psychological principle of influence is known as the exposure effect; ‘the more often a person is seen by someone, the more pleasing and likeable that person appears to be.’ (source: Science Daily)

When was the last time you saw the entire team of a big business on their corporate website? Speaking from my own experience, the last time I saw it was the 12th of NEVER.

Tip: Use your website to showcase your team, and why they love working for you. We do it here at Tenfold on our team page. Clients love it because they know they’re dealing with real humans, and humans are awesome.

Complaints are contributions, too – Part I

Naomi Simson (of Red Balloon, Shark Tank and tells the story of her role as Chief Experience Officer at Red Balloon. One day, a customer called, asking to speak with the complaints department. Naomi replied that they didn’t have one because they’d never received a complaint. They had, she went on to explain, received contributions from customers about how to improve the service. “Oh,” said the customer, with a softening of her tone (and attitude), “yes, I’d like to contribute, please.”

Listening to your customers’ contributions can help you understand what’s important to them. Big businesses pay tens of thousands of dollars on market research to uncover that kind of information, then it’s processed and disseminated through different teams (sales, marketing, product development, distribution) and then eventually a change might be made.

In my experience coaching small businesses I’ve seen that businesses that pay attention to their customers’ feedback can use the insights they get for free to quickly improve product offerings and service.

There’s a trick, though: you can’t be everything to everyone, so consider each piece of feedback carefully. I advise my business coaching clients to use these questions:

  • Does this contribute to improving our core offering?
  • How much will it cost in time and/or money to make the change?
  • How much additional value will this improvement deliver to our business: will it make us faster/better/be able to charge more/save costs?
  • Can we trial it as a limited/special offer and test the results before making a wholesale change?

Complaints are contributions, too – Part II

The advantage that the big brands have is that they have masses of customers. And a lot of customers like to make a lot (A LOT!) of noise of their experiences with big brands, both good and bad.

Savvy small businesses can listen into the buzz around the big names and use it to their advantage! Use online feedback forums, review sites and social media to find out what customers are saying about the big players in your field: the big brands are doing something great? Great! How can your business replicate or improve on that? Big brands are disappointing customers? Great! Promote how your business never causes that pain, or even better, what you can do to fix the customer’s problem.

The Reality of Relevance

You may be the best, and I mean world-class, at something. You do it with more care, more thought, more speed than any other business. Congratulations. That doesn’t mean you have a competitive advantage. That’s harsh, but fair. Because the reality is this: a competitive advantage only exists when customers in your target market (not you) think it is relevant.

Relevant to a customer means a product or service that makes their world better in whatever way matters to them. Being the fastest matters if your business is delivering pizzas but not if it’s caring for patients. Creativity matters if you’re an architect but not a carpet layer.

If you’ve struggled to carve out a niche where you can have a competitive advantage, there may be a mismatch between what you’re great at and what matters to your customers. Something’s gotta give.

Option 1: You do you. Keep doing what you’re best at and find a market that does value it, where you can create a competitive edge.

Tip: Explore other markets; look upstream and downstream from the customers you currently service.

I coach businesses to investigate whether there may be a niche within your niche. For example: If your business provides electrical contracting services to small-medium size business and your specialty is being super-responsive, explore the opportunity to specialise in a sub-sector of the market like private surgery clinics.

A word of caution: we business coaches always recommend a softly, softly approach. Test and measure the potential profitability, scalability and sustainability of a new market before fully committing.

Option 2: Bend and stretch. Redirect your effort and attention to being the best at something that IS relevant and valuable to your current market. Want to find out what that is? See Complaints are Contributions, too – Parts I and II.

The final tip is this: Take action! In business there’s no such thing as standing still; you’re either growing or dying. So go grow!


Sneak peek at what’s coming up soon… 5 Common Difficulties Most Small Businesses Face and How to Crush Them.


Licenced to bill

Doing the work is only half the job. If you’re not billing on time and collecting payment, you’d actually be better off not doing the work at all. Just don’t do it. Save yourself the time and cost, and go get a paid job working for someone else. Or register as a Not For Profit, because that’s basically what your business is.

Sounds absurd but it’s true.


Stay tuned for more…