small businesses are up against tough competition when facing their large competitors, but they have more advantages than people think

How can small businesses compete with large businesses

We always hear about big companies taking away business from their smaller competitors, or forcing them to close by selling at prices so low they can’t continue to operate.

But are small businesses really in danger?

We believe small businesses are better equipped to compete with large businesses than ever before. Here’s why:

Acting in real time

Attention spans, fame, and the ‘next big thing’ all have one thing in common–they don’t last very long.

It's hard to keep up with the pace of change today–by the time you've picked up on a trending topic, 5 others have already come and gone. This can be a missed opportunity for your business.

Small businesses have a big advantage when it comes to acting in real time.

Due to their size, they are able to react in much less time than their larger counterparts. When used correctly, this opens a lot of doors.

Pokemon Go was a viral sensation, and multiple businesses jumped on board to share some of the spotlight.

One pizzeria in New York saw its sales increase by 75% after the owner spent $10 on ‘lures, which attract more Pokemon to your area.

This is a prime example of a business owner taking note of a trend, and acting in real time to obtain great results.

How long would it have taken for a larger organisation or pizza chain to react to the same event? How many people would need to be involved in the decision-making process?

Acting quickly doesn't just have to be about jumping on the latest trend, it can also help you to identify issues and resolve them quickly, for example:

  • Changing your products

  • Adapting to customer needs

  • Fixing unexpected problems

How long would it take a big business to start accepting card payments? Small business can do it in just 5 minutes.

Get started now

Taking risks

Acting in real time also makes it easier, and less hazardous for small businesses to take risks when compared to big businesses.

Firstly, it’s easier to take the risk. There are fewer constrictions and individuals involved in making decisions, which makes taking risks easier and faster.

Secondly, if it doesn't work out, it’s easier to reverse the changes. For the same reasons mentioned above, if you notice something isn't quite going to plan, it takes considerably less time and hassle to switch it back.

Of course, when taking risks, big businesses do have some advantages––such as increased financial options, and access to experts. But taking risks as a small business can be a great way to compete with large businesses.

Finding and using your competitive advantage

Remember, sometimes big businesses will have the advantage over you.

For example, starting a price war on a product which is vital to the success of your business, with a larger company who can afford to make a loss on the very same product, is a quick way to put yourself out of business.

But what you could do, is make customers want to shop at your book store instead.

You can focus on your local market by adjusting your stock according to their tastes and preferences, creating a local bookshop tailored exactly to your customers' tastes. This is the kind of thing that not every retailer will do, but you can excel at.

The added value of community and connection is what will keep customers coming back to you and spreading the word–and it must be working, because the number of independent bookstores is back on the rise, and has been growing since 2017.

So as well as looking at the competition from other small businesses, you should include the larger ones in your competitor analysis too.

Then you can find your gap in the market.

When you focus on your competitive advantage or a specific type of product or segment of the market, you really get to know the ins and outs of it.

As you continue to work, your knowledge continues to grow–giving you a huge insight into discovering what works and having the advantage of knowing why it works.

Not every big business has the freedom to explore as much as you, so this can set your small business apart.

While you should be keeping an eye on the competition, it is important to remember to not spend every minute of every day analysing the competition–focus on staying a step ahead.

From time to time act on your knowledge and experience, and make them react to you instead. Big businesses are also watching their smaller competitors, to see what innovations and ideas they come up with, so give them something to look for.

Be personal and authentic

As a small business, you have a layer of authenticity that other companies don't. You offer a personal experience.

When you are just one or two people working on behalf of the business, you are the business. Compare this to a large organisation that has countless touchpoints, and it becomes difficult to ensure a certain level of authenticity and personalisation.

And authenticity is crucial, especially for millennials where brand authenticity ranks second when choosing which companies to support, just behind loyalty discounts.

The future of retail–a personal experience

As the retail experience continues to evolve, physical stores will need to become brand experiences. They won’t compete with online stores, but rather the two will complement each other.

“With almost everything being available online and deliverable within a day or two, or even in a few hours with services like Amazon Prime, the purpose of physical stores has shifted.”

The physical store offers a chance for you to connect with your customers on a deeper level. It’s where customers experience what your business is about, not just what you sell. It’s a totally different experience to shopping online and should be treated as such.

Being authentic is not just desired, it’s necessary for the success of your business.


Your authenticity has to be present throughout your entire business, not just in what you do, but what you say as well.

Whether it is through your marketing channels or the way you talk to your employees–your message should remain fluid.

When people are seeing around 4,000-10,000 ads a day, it’s no wonder they’re getting smarter about what is genuine, and what is not. So, if you manage to catch someone's attention, make sure they see the right message.

Customer service

Small businesses also have it easier when dealing with negative customer feedback.

How many times have you been left on hold, or speaking to a robot when all you want to do is find out where you can return a faulty item?

Your customer service is yet another area where you can excel beyond your competitors. You can take what is usually a completely un-personal customer experience, and transform it into a positive one.

Reach out to your customers regularly, give them opportunities to provide feedback, get to know them by name–which means more than just writing “dear first name” in your weekly newsletter.

Use technology

Of course, pretty much every business out there uses technology to push their business further, whether it be through performance, sales, productivity, or another business function.

But the beauty of technology today is that it doesn’t discriminate. It’s available to small and big businesses–you can use the same data analytics, you can use the same social media platforms with the latest ad tech, and you can even use modern solutions to attract the best talents.

A small business today has access to the same market that was previously only available to major global players. The device everyone carries around in their pocket is the tool you can use to sell your product or service wherever you want to. Just remember to be authentic when you do reach out.

You can also offer freedom and flexibility to your employees, something a lot of larger organisations struggle with.

With modern collaboration tools and software like slack and trello, ‘digital nomads’ have the freedom to work while on the go and small businesses have the flexibility and simpler structure to make this work successfully.

Then there is big data.

Small companies are now using it in many of the same ways big businesses have been for years.

Whether you are gathering insights from your consumers, tracking their journey and touchpoints, or improving your overall customer outreach and experience–big data can help you in big ways.

So despite big businesses having some big advantages, bigger isn't always better, and small businesses can compete with large businesses–many already are.

Alex Thumwood