For many years, your industry’s marketplace was of a size that allowed businesses to stay busy without much effort. Sure, there was small business competition, but it remained relatively friendly for most companies and communities. However, what you need to do to beat the competition within your market today may have changed. It’s your responsibility to your clients and employees to remain abreast of these changes and to adapt.
Small business competition has increased
Both the marketplace and clients have changed dramatically in recent years. Technology is one primary reason; new competitors are another reason. From online do-it-yourself services to larger companies hungry for new revenue, smaller businesses are seeing their business erode- and that pressure will only intensify in the coming years. If you want your company to grow during the foreseeable future, you need to ensure that you’re in a competitive position. Even if all you want to do is maintain the status quo, you still need to step up efforts to stay ahead of normal client attrition.
Expanding what you offer
One strategy for businesses like yours is expanding offerings in consulting and advisory roles, perhaps through acquisitions of other firms. Career development and leadership training are more critical as company owners begin to explore succession strategies. Compensation for owners and top employees may become more closely tied to performance and profitability.
How to maintain client loyalty
Client loyalty and how companies strengthen it is a crucial consideration. Factors such as service and pricing matter, but the best way to achieve staying power is by demonstrating your company’s value in meaningful ways while finding and driving additional revenue from clients. If your customers don’t see value in tangible ways, they’ll look elsewhere for the services your company provides.
Strategies for small businesses to beat the competition
That’s why one of the best strategies for small businesses to beat the competition is taking a fresh look at your business and the services it offers through steps like these:
- Develop and enhance knowledge of specific fields because companies offering specialized expertise typically face less competition.
- Ensure clients know the depth and breadth of your expertise.
- Integrate technology to enhance and support client service.
- Step up the frequency and the quality of client outreach.
- Deliver higher-value services than your competitors.
With business becoming more complex, business owners will find it more challenging to assess their opportunities and make confident decisions. Developing a greater depth of knowledge in specific industries can differentiate your company and may even allow you to broaden your geographic radius.
Gazing into the future
Looking ahead is also helpful. Take time to develop a plan for where you want your business to be in five years, and identify the structure, staffing, culture, and technology it will take to get there. Such an approach can help you keep your business relevant and competitive in the foreseeable future.
Investing in change
As you begin to envision what your company could become, you may need to consider investing in technology, training, space, or other areas. If you don’t have excess capital on hand, you’ll probably need to borrow, but remember that you’ll be funding costs that should improve your revenues and overall profitability.
Options for securing capital
When you borrow, you may be tempted to turn to a local bank officer you know, but traditional banks aren’t always comfortable with the structure of companies like yours. Most banks are geared to making loans to businesses with tangible assets such as inventory, equipment, and real estate. Another option is a loan that the Small Business Administration guarantees. Still, SBA loans typically take a long time to process, may involve an overwhelming amount of paperwork, and have relatively small lending limits.
That’s why a growing number of companies turn to specialty lenders who are accustomed to working with companies like yours. Such lenders understand how your business works and the nature of your income streams, so they can approach the underwriting with realistic expectations and an appreciation for inherent risks. Plus, as private companies, they are not restricted by the federal limits associated with some other types of loans.
If you are thinking about growing your business using an acquisition strategy or want to invest in your company’s technology or team, please feel free to contact us. At Oak Street Funding, we have experts in lending who have helped hundreds of clients gain a competitive advantage with a business loan.