Tag: how to compete in small business

Why Small Businesses Grow Faster Than Others

small businesses

This weekend wasn’t very eventful, if you consider thinking uneventful. But after watching several documentaries on success stories of small businesses I had to wonder for hours on my porch why some small businesses grow faster than others. We’re not talking about large companies or major corporations here, just small businesses like coffee shops with five employees or mobile mechanics with twelve employees. Why do some of these small businesses grow so fast compared to others? Well today I’ll be attempting to explain the conclusion I came to when I was thinking for hours on the porch this weekend.

To make it easier for me to wrap together concisely for others to understand, I developed three reasons why some small businesses seem to have better luck than others, though we’ll soon learn luck or chance has nothing to do with it. But first, a small disclaimer: I’ve never owned a small business before. So keep that in mind. It’s always best to remember that this isn’t a peer-reviewed article either. Thank you.

My 5 Reasons

  1. They hire the right people. But what does “the right people mean?” For an analogy, I’ll use an appliance repair company. Imagine that you have a new business and are finally ready to hire your first few employees. Would the right person be someone you can train to fix a fridge? Maybe the answer is “yes” if they’re dedicated and loyal. But for faster growth it would be best to hire a highly experienced appliance technician. At a company called The Appliance Repair Pro which does appliance repair Victoria, BC, services, they’ve done just this. They’re one of the fastest growing small businesses on Vancouver Island because they took the short cut of paying a little more initially to hire experts from the outset rather then save money by hiring unexperienced workers to train. Of course, if you can find a worker to train who will in the long run become a loyal employee for many years, this could help growth in the future, but not right away. It’s also a risk of investment to train unexperienced workers because people you train could end up working for your competition.
  2. Good marketing. For an analogy of what good marketing would look like, it’s easier to explain if we look at local food products. In every city there are mothers making jams to sell at fairs and farmers selling their beefs and cheeses at the markets. But which ones sell more are often a result of word of mouth and returning customers, but a good marketing campaign combined with novelty can create a momentum that never stops and this is why small local brands end up becoming national brands sold in grocery stores mere years later. A good marketing campaign could use humor that only locals would understand, or using local wildlife in their branding. But either way, it might be safe to say that any marketing campaign is better than none at all. I’ve heard of a grandmother who had been selling her homemade bread at the market for over 30 years who was suddenly put out of business because a young lady started selling her bread at the same market. The one difference was the grandmother relied on a few loyal customers while the young lady took out a loan for a major local ad campaign in her town.
  3. Quality. Last but perhaps most important, quality is what ensures your customers come back a second time and tell their friends about your product or service. If you’re a small business who doesn’t put any effort into being competitive when it comes to quality, then it may be very difficult for you to compete with those who make quality their number one priority. Imagine being a customer of the abovementioned appliance repair company and you’re very pleased with the services you received. Then, when you’re neighbor needs an oven repair and asks you for a recommendation, what are you going to say? Are you going to recommend the company that just gave you quality service or another one you’ve never used before? When you provide quality it stays in the memory of those you serve and this results in faster growth as word of mouth speeds the process of becoming a reputable business in your area. Perhaps this is most important for restaurants, as people will give bad reviews and never return to restaurants who make mistakes with their food preparation.

Like I said above in my disclaimer, I’ve never owned a small businesses, but I’m fairly sure every small business owner who received great success in their local area will agree these three factors above are a major reason why they surpassed their competition. Thanks for reading. If you have anything to add to this please get in contact with us and we’ll be happy to update our post.