Why small businesses can lose out to corporate heavyweights
The majority of small businesses offer goods and services that aim to meet demand from niche parts of the marketplace, yet they can still lose out to corporate giants.
Smaller firms therefore need to recognise their limitations and consider how they overcome them in order to improve any returns on money they invest.
Understanding the big brand and independent shopping experiences are key to this process and new research from Liberis has revealed a number of important considerations for small firms.
Some 47% of consumers listed price as the main influencing factor on where they choose to shop, adding that they view smaller businesses as being more expensive.
Given that chain stores can afford to offer loss leading items and get discounts for buying in bulk this is understandable, but small firms need to ensure their products are priced for the market they are in.
A failure to do this can result in lost sales and can damage the brand if the consumer does not feel they can trust the business.
The survey highlights the need to showcase value in products – small businesses are well placed to offer bespoke products and great customer service, for example.
Convenience was a key consideration for 40% of consumers when choosing a retailer too, which further emphasises the need for smaller firms to ensure they stand out from the crowd.
A quarter of people also value location, which means small businesses need to promote why their goods and services are better than those available elsewhere in order to drive sales.
If a small business is left facing cash flow difficulties or has growth aspirations, refinancing using a wide range of options can help.
Alternative finance options are available to drive growth while those unsure of their next move should seek advice or consider an independent business review.
Not only can this provide an unbiased look at a company’s finances, but it can also aid the planning of a long-term strategy that is created on a sound financial footing.
Despite some of the issues identified by the survey, 50% of those polled still said that they regularly opt to shop at small independent retailers.
By Phil Smith