When you’re a small business, competition is one of the toughest hurdles to overcome. Between balancing your budget, finding talent to help you grow, the constant battle with technology, all while trying to figure out how to bring in new customers. Who has time to think about the competition?

Of course, if you can’t compete, none of those other tasks will matter. And for a lot of small businesses, the competition can look like Godzilla when they are battling for the same customers as chains.

It is so important to know your small business’s competition. Chains seem to have everything going for them – massive advertising and marketing divisions, big budgets, legions of employees, and brand recognition. You can’t hope to match a chain strength for strength.

It would be like taking on a tank while riding a tricycle and holding a water pistol. But no matter how big business gets, it can’t do everything right. Getting to know the competition is a strategy straight out of Sun Tzu’s “The Art of War,” which tells us: “Know thy enemy and know thyself, and you will not be imperiled in a hundred battles.”

Translation: Know your competition’s weaknesses and your strengths, and you can compete against them.

So how do you turn these ancient words into a competitive small business strategy? These 3 tips will have your small business ready to battle the big boys on a daily basis.

Find the competition’s weak points

You’ll never get better insight into the competition than by becoming a customer. As an example, let’s say your product is a garden hose that forms an air-tight seal when attached to the spigot outside your house. No more spraying water everywhere when you go water the grass. To size up the competition, to the local chain store that sells hoses – somewhere like Walmart or Home Depot.

Play the role of an unsure customer who wants to buy a garden hose that will not leak. Go through the entire process: Talk to a store employee, ask lots of questions and write down the answers, and write down the prices as well. Purchase the product that seems most like yours, take it home, and use it. See how it works and document everything. If there’s a helpline available, call it with a problem about the product and see what sort of response you get. Wait a week and take it back to the store.

Try to return it without a receipt and get the response. Then return it with the receipt and note any differences. Go online and order the same hose from the same store. See how much it costs, how much the shipping fee is, and when it will arrive. When it does, put it through the same battery of tests for usability, then return it and document that process as well.

What’s the purpose of all this? You are creating points in the process where you can differentiate your product from what the chain offers. Quality is always chief among these. If you can prove your product works better than the chain’s, you have a decided advantage. But you’re still fighting uphill battles on principles like branding and convenience.

When you have all your research done, tweak your model and your business plan to give your product a better offer than the chain. That’s how you make your business competitive. Price your garden hose 10% cheaper than the chain’s or offer free shipping when their order is above a specific dollar amount. Offer a money-back 30-day guarantee to return the hose, even if you don’t have a receipt.  Focus on those advantages and promote them relentlessly.

Be powerful online

When it comes to small businesses, competition can take place on several battlefields, most recently the digital one. Regardless of the size of your operating budget, your business can duke it out with the major players by careful use of online tools including SEO, website building, and social media. Doing the right research and either hiring the right people or acquiring the right skills can put you on an even playing field with the chains. Generally speaking, chains have to be vanilla when it comes to their online presence.

They are appealing to a vast audience and want to send messages that reach the most people, thus using branding and messaging that appeals to the lowest common denominator. That means your company can take on any persona you like to set yourself apart. Be it playful, informative, personal, or rebellious, striking out a different path gives you an identity all your own.

The same goes for how you use social media. Being smart with your messaging, even by riffing off what the chain puts out on its accounts. Being small also gives you the opportunity to engage with your customers when they email, call or contact you via social media. Making that personal connection is enormous if you want your small business to provide competition to the chains.

Make small beautiful

Consumers can get chain-fatigue, where they are sick of walking through a giant store to purchase one item they need. If they can walk into a smaller store where they are personally greeted, assisted, and get out in a few minutes, there’s a lot of value to that experience.

The value grows when they are recognized as a returning customer, greeted by name, given access to exclusive deals and offers, and rewarded for recommending other customers to your business. A lot of that comes from the perception of big versus small.

Plenty of people share the opinion that a chain store is merely looking to hit its profit margins by combining low prices with round-the-clock availability. Chains sacrifice quality customer service in store and after purchase for these low prices, which is where a small business can pick up the slack.

The personal touch, the cozy, cool store setting, and the ability to see customers as people first, not dollar signs on a ledger, are all avenues towards winning customers and being competitive as a small business.


About the Author

James is an avid investor in real estate and the stock market. He has found an edge in his real estate investing with digital marketing.