Most small businesses are focused on growth. They should be, since growth is key to creating a business that works for you. But, that got me thinking, what advtanges do small businesses have?
Being small definitely has its perks. You make decisions more quickly, you can be more nimble and you have less to lose. Small businesses have the opportunity to completely change the game.
So, I created this movie themed post to highlight the advantages.
Running a small business can feel like the Hunger Games.
Often small business feels like a bunch of companies scurrying around the business arena with strange and inventive weapons attacking each other.
Here is where it is different: in the Hunger Games there can only be one winner, banding together is self-defeating and to succeed you have to kill everybody else.
In the world of small business, there is plenty of space for most, and there is no need to attack each other. Competing, one small business against another and trying to destroy each other is a waste of time, money and resources.
Instead, focus on the advantages that you have as a small business compared to large enterprises. You are better off banding together and going after big wide-open spaces that are poorly served by incumbents than attacking other startups.
But there are structural advantages to being a new company in the world of incumbents.
Large companies are cumbersome and struggle to keep up with change. Smaller companies can be nimble and adjust.
In their book, The Underdog Advantage, Scott Miller and David Morey start with the observation that "the advantages of the incumbent seem to have diminished or even disappeared… It's the underdog's day. Whether it is Coke versus Pepsi … Special Ops versus Al Qaida – these rules will apply.”
You may feel distracted by the disadvantages of not being large and having the capital and resources to do things like advertising during the super bowl.
However, as an entrepreneur who has been on both sides of the fence, I can tell you first hand that the underdog advantage is real and there are pros to small business. Yes, there are cons as well. However, I'll save those for another post. Let's focus first on the good stuff.
There are three significant advantages that I see, which also relate well to film:
Small businesses can work Fast and Furious
Grammar aside, the ability to quickly make decisions is a huge advantage. While large companies will spend weeks hemming and hawing over small changes, small businesses can jump in.
Small business owners don’t have to deal with all the legalistic and political crap that big companies have to manage that takes weeks and layers of approvals. Admittedly one reason is that you have less to lose. You likely don't have investors breathing down your neck ready to sue you over every decision.
Though, the idea of less to lose is a mirage: large companies continuously fail because they are so worried about losing what they have that they don't develop what they could be.
You can also try things, see if they work and adjust. So, you can iterate many times before your larger counterpart has built their first spreadsheet.
As relatively flat organizations your decision processes should consist of three steps:
Step #1 - see our business partner (which may be looking in the mirror).
Step #2 – Conduct a 5-minute conversation.
Step #3 – Act
Your ability to act quickly and efficiently enables you to seize opportunities that big business may miss out on because of their bureaucratic processes.
You live in a world of Mission Impossible
It may seem undoable, but you make it work. You can create non-traditional solutions for your customers’ non-traditional problems.
The best part: with the breathtaking rate of change all problems are non-traditional.
Unlike large firms that have one specific process and technique that will cure all problems, you only have creativity and the ability to change.
Entrprises are concerned with how they did things last week or last year. You focus on solving the problem right in front of you.
When you need to defeat a high-end security system by breaking into windows 100's of feet of the ground while suspended from fishing line all while not making a sound … talk to a small business.
They will solve the problem and create the tools.
Star Wars – you can find the weakness in the Death Star.
The Empire in Star Wars is comfortable in their Death Star – a space station capable of destroying a planet in one blast. Any large ship coming to attack it will be dust in seconds.
However, a small ship with an explosive payload is not seen as a threat. So, the rebels figure out how to drop a small charge through a small hole in the side of the Death Star and blow it up.
Large companies are fighting large companies – they don’t see small companies as a threat. That is where you can come in with something new and innovative that changes the game.
They may have unbelievable power, but you can find the weakness in that power.
Incumbents have more power, more money, and a better market position. However, they are slow lumbering beasts that continue along the same path without much attention to what is going on around them.
As a small business, you have the opportunity to run circles around them and change the game without them even realizing it. They may be on the same path, but you change the destination.
Use your advantage, not to compete with other small business but rather to reinvent the game and tackle the big guys.
Grow, but keep your advantage
If you want your business to work for you instead of you for it, you must grow and get the big business fundamentals right.
But don't lose sight of your advantages, being small allows you to compete in different ways.
Of course the magic is to grow while maintaining the advantage of a small business, not an easy feat but worth thinking about.
Are you ready to take your business to the next level? Download the first chapter of the MAPP guide and start building your advantaged business today.