Sometimes being small in business is not necessarily a bad thing. There are many advantages available to the small business owner which, if used correctly can give the small business owner the upper hand on their larger competitors.
The following are some of the advantages which we have identified from our experience of working with various owner managed businesses:
1. A centralised and efficient decision making process
As the name suggests owner managed business are managed by the business owners themselves. This enables decisions to be made in an efficient manner as they are generally made by one or two individuals, without the need for meetings or consultations with different departments. This efficiency allows for a higher degree of flexibility within a small business and therefore opportunities should not be missed.
2. Effective networking
Attending networking events can provide small business owners with invaluable information. Your local Small Firms Association (SFA) or Chamber of Commerce will often run networking events for the varying business sectors. Attendance at such events can help your business grow through gaining knowledge from:
Your competitors – you can exchange ideas, market knowledge or perhaps even enter into joint ventures.
Your clients – you can meet your clients face to face and discuss their specific needs. You may even gain clients as you will be introduced to connections of your client or have the solution to a challenge they are facing. Networking is also an opportunity for you to find out what your competitors are doing right and perhaps even attract your clients away from your competitors.
Your suppliers – discussing your market with your suppliers can help you to identify new trends or alternative suppliers which could better meet your needs. Meeting with the various suppliers within your market can often assist you in finding a supplier that offers an equal or better service, for a better price. It is important not to be too reliant on one supplier and making contact at networking events will give you alternatives.
3. Feedback from team.
As a small business owner you work very closely with your employees on a day to day basis. Staff members are an excellent source of information on your product, service and general logistics of the business itself. Your employees can identify areas that are not working, and assist you to understand the difficulties and how these can be addressed expediently, helping make your business more efficient. In a larger organisation management may not have such a hands on approach with their employees and may find it difficult to get employees to buy into changes needed within the business. Due to the close relationship which a small business owner has with his team they can discuss any change and employees will generally be more vested in the best interests of the company.
As a small business you have the ability to be flexible, especially when it comes to new product offerings and capitalising on market trends. This ability to change is a key factor for any small business. It is important that the business owner studies the market on a regular basis to identify what is trending and to factor these trends into their business offering. As outlined above there is no hierarchy of management hindering the decision making process so any change can be implemented efficiently.
If you identify a niche in the market and act on it quickly you may even become the market leader for your product. While this may be a risky strategy, if it does not work you can decide to get rid of it and move on, remember you are a small business and quick change is what you are able to do!
5. Close relationship with your customers
While we may be living in an ever increasing global market, there is a current trend for people to return to local small business, which they can trust. People are now looking for the individualistic offerings with a personalised aspect and a less complex service system. In some instances the uniqueness of a small business may lead your product to become a cult favourite, especially if you are unforgettable, different and perhaps even a little hard-to get!
6. You can do more with less
Many small business owners have learned the art of effective cost management over the past number of years as they have had to operate on very tight budgets and cashflows, while still targeting growth. Now that the economy is coming out of recession, it is vital that the small business owner continues to implement these cost saving measures, as it will allow their business to become more profitable in the new economy!
7. Access to the global market
Over the past number of years we have seen a significant growth in the number of small local business’ gaining traction on the global market, through their use of the internet and social media. If used correctly, these platforms will allow even the smallest business to trade in the global market.
If you would like any further information on the above, or would like to share the advantages which you enjoy as a small business owner, please do not hesitate to leave a comment below or contact a member of our team.