How Small Businesses Can Compete with Big Businesses

Portions of this article previously appeared on Forbes.com

I almost didn't start.

I was excelling in the payments business in my early 20’s. A colleague told me I should start my own company because I knew enough and had the motivation to do so. The problem was, I couldn’t stop thinking about how far behind I would be when compared to other major players in the industry that I convinced myself that I would fail if I tried.

However, it was only temporary. I ultimately realized that I would regret not going for it, and that pain would be worse than not succeeding. Now, 17 years later, I’ve never looked back. I’ve started three companies within the payments space and they’ve all been in the “small” business phase, competing with major national banks and other large firms for clients.

I’ve also been fortunate enough to sit across the table from thousands of small-to-medium sized business owners facing similar competition in the own respective industries. 

For those who have questioned taking the plunge, like I was, to get in the ring with deep-pocketed, national corporations, here are some ideas that might make you reconsider.

1. You don’t need to have the best products

If you start to obsess about having a better offering than your competitors, remember this quote by investor Peter Thiel. "Superior sales and distribution by itself can create a monopoly, even with no product differentiation. The converse is not true." 

Does your product need to be great, and should your customer service be incredible? Absolutely. That said, there will always be room for a strong competitor in any industry or market.

2. You don't have a boss, board members, or investors so you can control every outcome

When you’re small, you can move quickly. There is less red tape and fewer rules. Many big companies are sprinters, with CEO’s making short term moves to appease investors every 90 days. 

You’re a marathon runner. You are in it for the long haul and the only person you need to please is yourself. This gives you total freedom and control of your business at the same time to completely focus on your customers.

3. You can impact customers and employees lives in a way a large business may not be able to

I recently sat down with Leslie Nguyen, a successful business owner who, to date, has founded four successful restaurants including Bosscat Kitchen & Libations in Newport Beach, Calif., and Houston; Ten Asian Bistro in Newport Beach; BCK: Kitchen & Cocktail Adventures in the Houston Heights; and Miss. Mini Donuts. When I asked her how she continues to open local concepts that thrive against larger competitors, she told me it all has to do with taking care of customers and employees in a way that can’t be replicated.

“Great customer service is a lost art form,” says Leslie. “We stop at tables and check-in, say hi to each guest, and go above and beyond to provide a VIP experience that makes every guest feel like a rock star.” 

“Great customer service is a lost art form” Leslie Nguyen

In addition, Leslie told me that she empowers her employees to create their dreams, which has formed unrivaled bonds with her team and has allowed her businesses to grow faster. “We have encouraged and helped three of our employees in opening their own restaurants. When we support them, they support us”.

4. You're able to be scrappy

At the beginning of a new venture, you need to make a name for yourself. The more people that know you, the more customers you'll have. You should be willing to work for free, give things away and completely over-deliver on everything. It will pay itself off many times over. 

For example, I once had a potentially large client send me an email around 9PM one night with a simple question about how we compared to a competitor they were considering. Knowing I was up against an extremely large organization, I immediately opened my computer, researched his question, and even called the competitor for clarification on their product. I wanted to show him how quick I would handle his requests and the level of thoroughness he could expect from me, so I created a custom, color-coded, side-by-side PowerPoint and had it to him within an hour of his email that same night. I don’t think it was a coincidence that I won the business of all eight of their locations the next week. I actually made very little profit from this sale, however, using them as a reference and the referrals they provided over the years created a return-on-investment far too massive to measure. 

5. It's easy for you to make changes and innovate

The larger the organization, the longer it takes for updates and changes to happen. For small businesses that have less staff, fewer decision-makers and fewer processes in place, it is often much easier to innovate than it is for a larger business with a corporate structure. 

As a final note, it’s important to decide what “compete” means for you. Everyone has a different answer for what it would mean to be successful in competing with a larger competitor. Are you looking to make a small income on the side and pick up new business here and there? Or, are you looking to completely dominate your industry? Either way, you are the only one who should determine what a successful outcome looks like; It’s not your parents, siblings, friends, teacher, or your social media feeds. It's also not what people think of you, or how you want to be seen by others. The most important thing is that you believe in what you are doing and are willing to outwork your competitors.

If I let my concerns about getting started in the first place overwhelm me, who knows where I would be now. One thing is for certain though, this article wouldn’t even exist. 

Stop worrying, and just start.