Small businesses often spend years trying to figure out what their giant competitors did right years ago to be where they are now. In the process of building successful strategies it becomes more of a survival battle. Growing is not an option anymore, mere survival becomes crucial and avoiding bankruptcies is one of the major challenges faced.
Many giant companies have never followed any particular business model. As entrepreneurs sometimes the best business models would lead to a failed business, while the worst business models performed surprisingly well. Smaller businesses have always benefited by being more flexible and by building close ties with their customers who are their source for word of mouth advertising, which can contribute between 10 to 15% growth in a business a year.
Many small businesses owners have often mentioned of how their businesses pick up once they stop competing. Therefore, moving away from their competitors’ forces small businesses to tap into new undiscovered markets and create new niches. However, what is more important is to hold ones ground in the market and not exit the market in fear of being eaten by the giant players. Successful small businesses survive because of the high-end products they manage to produce at competitive prices. Larger organisations although may produce top notch quality products, charge a handsome sum for that quality. Smaller businesses have the advantage of adapting to new technology at a greater speed than larger businesses and are able to bring such inventions into the market even sooner. However, a strong belief is that smaller businesses are successful in retaining their consumer base because of the infrequent changes in their product lines. For many the growing number of aging baby boomers with disposable incomes is keeping these small businesses thriving, while others believe it is the young consumers these smaller organisations target, which keep these businesses alive.
Careful budgeting and planning can take smaller businesses to unexpected levels. Small businesses do not budget for expensive marketing campaigns, take production offshore, or curve their growth rates. Instead they prioritize elsewhere, focusing on building a stable company. It is strongly believed that small businesses’ success is driven by direct sales over the Internet and big margins. One example is handmade cycle shoemaker Rocket7. While it sells its custom footwear consumer direct, the company touts growing dealer sales of its $470 stock shoe line. "Another area we are making strong inroads with our dealers is with our custom cycling footbeds program," said Brian King, Rocket7's founder.
Niche product that fills a need, personable service from the people that make the stuff, word of mouth, limited volume and product exclusivity, and a loyal customer base of dealers and consumers are what small businesses should attribute their success to.
"After seven years of effort, our loyal customers now refer to us as a core brand. That's a difficult thing for even big companies with unlimited marketing budgets to accomplish," said Rocket7's King.
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