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How Can a Small Business Compete with a Larger Business

Being smaller can be an advantage when you use the right strategy.

Image of David and Goliath
May 22, 2024
Chloe Mulliner
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Reading time about 9 min

As a small business, it’s easy to feel outshined by larger brands that have overflowing resources and bulging wallets, but that’s not to say you can’t compete with the big dogs.

You see, small businesses do have advantages over big businesses. Yes, established brands often have more money, power, and influence, but those aren’t the only factors that spell out success. In fact, some of those big-business elements can actually slow things down and get in the way of success.

Believe it or not, your small business has a lot of ammunition to work with, and it’s just a matter of sorting through your artillery and knowing where to direct your marketing efforts. If you can master the art of identifying your niche audience, engaging with your customers, and maintaining their attention, you shouldn’t have any trouble keeping up with bigger businesses.

9 Ways Small Businesses Can Successfully Compete with Large Businesses

Follow our guide for ways to keep up with—and even surpass—the big players in your industry.


1. Zero In on Your Target Audience

Finding and tapping into your niche audience is one way small businesses can compete successfully with larger businesses. You might not have the funding to reach out to anyone and everyone like big businesses do, but that just means you must take a different approach.

As a small business, you can put your efforts toward creating ultra-targeted strategies that pinpoint a small circle of customers who are actually in need of your products or services. And if you’re lucky, you can even hone in on customers who are being overlooked by those bigger brands.

For your business, that might mean finding that group of bike enthusiasts who only ride specific kinds of road bikes or green activists who only consume food harvested within a 60-mile radius of their homes. Narrowing your audience this way also lets you weed out those who have no interest in your brand, so you’re not wasting your time or energy advertising to noncustomers.

After identifying a small, specific group of customers, you can more easily cater to their preferences and needs, especially once you start implementing some of the following strategies.

Customer shopping at a local farmers market

2. Find Out Where Your Customers Spend Their Time

Once you’ve determined who your target customers are, it’s crucial to find where they spend their time. After all, you want to be where your customers are, whether that is an in-person location or on their cellphone. Again, because your small company is going after a niche audience, you have an advantage.

How so? Let’s say you own an arts and crafts store, and your customers spend a lot of time searching for projects on Pinterest. Your craft business should definitely have a presence on that platform. For instance, the DIY Guide to Building a Birdhouse you created may encourage your crafters to visit your blog for more tips or even inspire them to purchase their materials through your online shop.

Or maybe your business specializes in vintage jewelry. In that case, Etsy, a global online marketplace where people come together to make, sell, buy, and collect unique items, is the perfect place to capture customers searching for special pieces. They might not even know your business existed, so this is a sure way to get noticed by potential customers and collaborators.

From Amazon listings to Reddit threads, the key is to get in front of your customers and offer what they need before they even realize they need it.

Image of swirling logos of Etsy, Tiktok, Pinterest, Ebay, Reddit, and Facebook

3. Engage with Your Community

When it comes to your small business, you have the advantage of quality over quantity. Think about it in terms of friendships. If you have 50 friends in your circle, your relationships aren’t going to be as strong as if you had a tight-knit group of just a few close friends.

The same idea applies to the business world. A big business might have thousands of customers compared to your smaller customer base, but that just means you have the opportunity to build stronger, more meaningful relationships with those in your circle.

With fewer customers to keep track of, you can more actively engage with your community. You can reach out to individual customers, offer local promotions and loyalty programs, attend community events, host workshops, plan fundraisers, or even sponsor local sports teams.

Big businesses are at a disadvantage here because their customers are likely spread all across the country — or even the world — so they struggle to build these more intimate relationships. Meanwhile, your small business can more easily play an active role in your community to further strengthen your ties to the community and build rapport with your customers.

Local kids sports showing sponsorship banner

4. Build a Strong Reputation

Businesses — both big and small — need to stay focused on maintaining a good reputation. While smaller businesses may not have an advantage over larger brands in terms of marketing resources and reach, they do have a better shot at managing their reputation within their niche market.

Afterall, you want your small business to be one that your community knows and trusts, and having a presence in that community is one example of how you can build and fortify your reputation. Remember, that your community is not limited to the literal area local to your business, but also encompasses the larger community of those interested in the specific niche that your products or services support.

You can boost your reputation in your community by requesting customer feedback and reviews. When your customers are part of a community, especially one that is niche or tight knit, when they say something positive about your business it spreads quickly and has significant influence amongst your target audience.

EZ Texting Customer Quote from Fidelis Freight

5. Make Customer Service a Priority

As a small business, you’re probably not flooded with customer questions, complaints, and feedback around the clock. And that’s actually a good thing!

Because you’re not drowning in customer feedback, you can proactively manage the customer service experience in real-time, individually responding to each customer’s comments and concerns. This can give you a one-up over large businesses because you can focus on addressing your customers’ feedback instead of ignoring them or sending canned responses.

And the truth is, customers recognize and appreciate when a company is genuinely interested in what they have to say and not simply going through the motions of how to process a complaint. They know the difference between a brand committed to helping them solve a problem and a company that doesn’t have time to engage.

Remember, if your customers feel like their voices are being heard, there’s a good chance they’ll choose your small business over the bigger guys.

Small business owner taking a call

6. Develop Localized Brand Content

How can you make your brand content relevant to your local market? Well, as long as you’ve been following our previous tips, you likely already have your finger on the pulse of your local community and customers. If you’ve been interacting with your customers, requesting feedback, and reviewing survey responses, you probably already know what they want and what’s important to them.

But, have you used this valuable information to help frame your brand content strategy? Using this intel makes it easier to build a localized brand content strategy that resonates with your customers, and to develop content geared toward this specialized target audience.

For example, if you run a small barbecue shop in town, you might release a digital barbecue cookbook just in time for your town’s annual Independence Day Cookoff. Your customers can use your cookbook as a reference when hosting their own barbecues and may be inspired to pick up recommended ingredients from your shop.

Or perhaps you run a fitness center and every week you spotlight a local athlete’s accomplishments on your social media platforms. Not only will members of your community be excited to share your posts, but other athletes may want to join your gym based on the type of athletes your gym is attracting and supporting.

When your content actually speaks directly to your customers, they’re more likely to stop and take notice of your brand.

Example Social Media Post

7. Watch & Experiment with Marketing Trends

Sure, big businesses might have the big bucks to go after the latest and greatest marketing trends, but they also have a lot of red tape and approval to secure before they execute their plans.

Small businesses may have smaller budgets, but they have agility on their side. Smaller means nimble. It also means working with fewer employees, who likely have more face time with the entire management team. This means ideas can get off the ground sooner, and marketing campaigns up and running faster. Instead of waiting around for approvals, small business teams can join forces and jump on the next big thing before it fizzles out.

So, keep an eye out for what’s trending and how you can replicate it. Make sure to follow similar businesses on social media and in the news. Don’t limit your trendspotting to small businesses because just because something is trending with a big box competitor, doesn’t mean it is not relevant to your customer base. Just because you don’t have huge funds doesn’t mean you can’t scale down the idea to accommodate your manpower and budget.

Image of a few coworkers collaborating or gathering around a laptop or table

8. Focus on Your Digital Presence

Google Business Profile

You may own a mom-and-pop shop that prides itself on word-of-mouth marketing. This type of grassroots marketing may have netted respectable foot traffic for your business, but if you want to compete with the big dogs, you can’t overlook the power of a digital presence. If you want to sustain and grow your customer base, diversifying your marketing efforts to include digital platforms will play a key role in achieving success.

Maybe you run a well-known, well-frequented business in town, but how are you going to attract new customers — perhaps from several towns away — if they don’t know your business or brand exists? If your company isn’t showing up in Google search results, you’re missing out on a ton of potential business.

Creating a digital presence doesn’t have to be a difficult or expensive undertaking. In fact, simply creating a free website and claiming your Google Business Profile are low-to-no-cost ways to show up online. Next, consider social platforms where you can market and show off your products and services, such as Instagram, TikTok, Twitter, and Facebook. These social sites can be free to use and generate organic traffic to your website, while helping you spread the word about your business. Social platforms also provide your customers with a place to leave comments and feedback, which could further help bolster your reputation and deliver valuable input from your target audience.

If you are willing to throw a little money at boosting your digital presence, consider Facebook advertising, Google Ads, or SMS text messaging to get your business in front of more eyes.

Again, keep your target niche in mind. Unlike the bigger brands, you don’t have to cast as wide a net on the internet if you can pinpoint who you’re targeting in the first place.

9. Incorporate SMS Strategies

Sample Text Message

When small businesses invest in an SMS platform like EZ Texting, they can establish mobile-first communication with their target customers to maintain a competitive edge.

With SMS, small businesses can communicate one-on-one with their customers through two-way text messaging and address questions, concerns, and feedback in real-time. Yes, large businesses can do this, too, but remember, you have the advantage of having a smaller network of customers. This makes it easier for you to create personalized marketing campaigns and personally engage with each customer.

Additionally, once you know and understand your target audience, you can create automated drip campaigns that further target your customers’ needs without manually sending out each correspondence.

Discover How EZ Texting Can Help Your Small Business

Now that you understand how to compete with established brands and recognize some of the advantages small businesses have over big businesses, it’s time to implement an SMS marketing strategy to help your small business grow.

With EZ Texting, you have all the tools to communicate with your customers, send curated promos, oversee customer service, and monitor and track customer behavior. Sign up for your free trial with us today!

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