In the movie “You’ve Got Mail”, the sub-plot aside from the love angle is that the heroine (played by Meg Ryan) was forced out of business when the big-time bookstore owner (played by Tom Hanks) moved into town. Meg’s character owned a quaint little bookstore, which she inherited from her mother. Although the prices of her books were a little steep, she makes up for it in services. She packs the books in the specialized bag, and she knows all of her customers by name. Tom’s character, on the other hand, moved into town to build a branch of a big chain-bookstore which offered discounted prices and a huge building, as compared to Meg’s little bookshop on one corner of the town’s streets. In the end, Meg was forced out of business because her customers went to Tom’s monstrous bookshop.
Nowadays, this type of situation will not hold true anymore. More & more small organizations are paving the way and giving big businesses a shot of their own medicine. In the movie, the reason why Meg Ryan was forced out of business is because she cannot gain profit anymore. Her prices are steep as compared to the other big business’ discounted rates. Her only edge is that she gives personal service, she knows her customers by name, and she has a very small staff, about 2 or 3 employees. As a small organization, you may turn around and have these qualities as your edge to compete against the big sharks in business. Here are some tips on how you can hold your own against a big business:
1- Small businesses have a big competition. It means that you need to know how to survive out there. No matter what type of business you have, it is better to learn about the competition so that you will be able to survive. Here are some tips on how you can survive the big competition: >Keep your business alive. When it seems as if your cash flow is moving in downward slope, keep a tight rein on your budget. Do not spend on unnecessary business purchases, and always balance your books. If you are one to buy on impulse or if you are the type to listen to those who sweet-talk you into purchasing “necessary” items, control yourself. Get a 2nd and 3rd opinion if possible, as these impulsive buys may lead to the end of your small organization. >Do not be afraid to seek professional help. The fall of most of the small businesses start with decisions on problems which are not carefully analyzed. Although you think that you have a contingency plan, make sure that you have foreseen the results of a certain business decision. In the long run, it is better to take professional help rather than embark on a plan that could start the downfall of your business. >Keep your books straight. The better option is for you to hire a professional accountant from outside to figure the returns of your investment and handle the other financial aspects of your business. >Take advantage of every free business counseling whenever available. This does not just help widen your knowledge, but it will also give you an idea of how other businesses are run by small-scale owners. >Know exactly where your business is headed. In your daily operation, make sure that you know where you want your company to be 5 or 10 years from now. Be always aware of the trends in the industry that you are in, practice good money management, and learn how to recognize the potential problems before they arise.
2- Learn how to market your small organization. Marketing is not about only trying to sell your products and services to everyone. It is all about knowing who to market your products to. In marketing, it is good to remember these fast facts: > Know about your customers. >Communicate with your customers. >Build a good and personalized relationship with your customers. It will be a great edge for you to have against the bigger companies. They might offer discounted prices, but it is harder for them to keep track of customers on a more personal basis. >Do not stop the marketing process. As a small organization, you need to timely review the markets that you need to pursue so that you can better reach out to your customers. Remember, small organizations are big businesses these days, so do not be afraid to work hard for the company that you have – not matter how small. If you work hard, make wise business decisions, learn how to market your small business and personalize the customer interaction, your small-scale business is sure to rise to the top.
Many small business owners see large businesses exclusively in competitive terms. For small enterprises that compete directly with larger companies, this characterization is an accurate one. An independent record store owner, for example, will undoubtedly—and legitimately—regard the arrival of a new record store operating under the banner of a national chain as a threat. Similarly, a small plastics manufacturer will view larger firms engaged in the same industry sector as competition. But small businesses should recognize that large regional, national, or even international companies can take on other, decidedly more attractive, identities as well. Larger companies may assume roles as business partners, product distributors, or customers. Indeed, large enterprises wear different hats to different observers. One small business's aggressive competitor may be another small firm's business ally, distributor, or client.
Keys to Successful Partnerships with Larger Companies Following are several tips that entrepreneurs should consider when negotiating and maintaining a partnership with a larger company: Research. Some partnership offers sound great on the surface, but are fraught with unpleasantness under the surface. Entrepreneurs should make sure that they undertake diligent research so that they can best assure themselves of finding the right partner, for as Bodkin and Matthews admitted, "not every partnership yields happy results; ill-conceived partnerships can leave your company in worse shape than before. Bad partnerships, like bad marriages, can drain resources, end up in costly litigation, and sour both partners on future relationships." Typically, however, warning signs will be there for the small business owner who takes the time to look.
Fundamentally sound business practices. Entrepreneurs hoping to secure a partner to bankroll their R&D efforts or market their products are wasting their time if they do not have a viable business already in place. If the small company's business practices are shoddy, disorganized, or incomplete, large companies will be sure to notice. Recognition of own responsibilities. Entrepreneurial companies can reap many benefits from partnering with large firms, but they need to recognize that those big companies are for-profit enterprises; they expect something in return for their financial, marketing, and/or management help. Monitor requirements of successful partnership. Many partnerships with larger companies require entrepreneurs to make a greater commitment to their business in order to meet the obligations and conditions explicated in the partnership agreement. If the entrepreneur in question launched his or her business for the express purpose of realizing greater personal wealth or establishing a significant presence in a given industry, finding the desire to meet those partnership obligations should not be a problem. If, however, the entrepreneur launched his or her venture in order to stake out a lifestyle of independence and travel, that person may want to weigh the sort of impact that the partnership could have on those aspects of his or her life. Do not be intimidated.
The trappings of the corporate world (high-rise buildings, cavernous conference rooms, legions of blue suits, etc.) can be intimidating, but small business owners have to remember that they run viable businesses of value themselves, and they should negotiate accordingly. Maintain independence. Autonomy is assured if you maintain ownership, so be leery of turning over too much equity in the business in exchange for financial help. Establish clear and open lines of communication. Good communication practices are essential to all business relationships, both internal and external, and alliances with large companies are no exception.
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