3 Strategies Small Businesses Can Use to Gain an Advantage in Bad Times
A recent study by Intuit, the software giant behind QuickBooks, Quicken, and TurboTax, found that three-fourths of small business owners expect to grow this year, in spite of all the talk about a recession, corporate layoffs, and consumers cutting back.
Now, it’s probably safe to say that small business owners are a relatively optimistic group. Part of their optimism, though, comes from that fact that two-thirds of the people surveyed said they had survived a recession before. They’ve done it by putting their customers first and focusing on their finances.
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When I first started studying entrepreneurship, my perception was that large companies created the jobs. Our colleges train us to work in bigg business. It’s true that large companies tend to hire a lot of people during boom times, as do small companies. But during tough economic times, large companies cut back. Interestingly, small companies tend to pretty much hold their own.
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If you’re keeping an eye on the news, you see that a lot of large companies are cutting marketing and even customer service. They’re cutting jobs and even entire departments. They’re streamlining.
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As numerous studies have shown, the net effect of this is that, over the course of the business cycle, almost all new jobs come from small businesses.
Opportunities created by large businesses for small businesses in bad times
As large companies make cuts, astute small businesses can gain an advantage by using any or all of the following three strategies:
#1 – Turn big companies into your customers.
They’re reviewing their operations. If what they cut is what you do – it’s your service – market to them! They may still need that service in some capacity … take advantage of it!
#2 – Recruit their talent
A lot of the people they’re laying off are very talented. These are people that you may have never been able to get before. Recruit that talent. Provide them with a nice place to fall.
They may look for something more stable or some place where they feel more of a sense of ownership. Your business could be the answer they’re looking for!
#3 – Go after the large company’s small customers.
With the cuts they’re making, they have few resources to take care of their customers. It’s the old 80/20 rule – they’re likely to super-serve the 20% of their customers that constitute 80% of their sales. Then they may cut back on service for all the rest.
Go after these customers that are facing reduced service. They may be a small account to a large company, but they may be one of your biggest customers!
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