Advantages small businesses have over large companies

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Some startups start small and rapidly expand, eventually going public. Other business owners prefer to keep things small. While both large and small organizations each have their own distinct benefits and drawbacks, small businesses, because of their size, often have unique opportunities large companies do not necessarily have the luxury of enjoying.  

Familiarity

Small businesses are afforded the opportunity to intimately get to know their customers and get to develop strong relationships. This is a distinct advantage over larger corporations because the big guys don't generally have the levels of familiarity with their customers the way small businesses do.

Chances are the small business owner knows his or her customers' preferences without having to look into a database, and is on a first-name basis with many of them just going on memory. Larger companies may know their customers, but this is more likely due to data mining and reading analytical statistical reports. While the latter isn’t a bad thing, in fact, it is an innovative way to grow and better market, but it does not allow nearly as much personalization through human contact the way small businesses enjoy.

Family-like environment

Small businesses enjoy the warm reception people give when they feel welcomed into a family-like environment which small businesses tend to nurture. Customers are often personally greeted and feel welcomed (granted, larger businesses are now using this approach too). A recognizable face associated with a product or service from a small business owner often goes a long way when compared to some distant executives making the decisions. People can offer feedback to the small company and know right away whether or not they've been listened to and, if so, they are more likely see faster results. 

Neighborhood loyalty

Small businesses have the ability to better connect with the local community. In general, many people are suspicious of big business. Local small businesses can use this uncertainty as a competitive advantage.

While their prices are generally higher, small businesses can capitalize on the aforementioned familiarity and emphasize trust. They can market themselves to be a friend to the customer, not as a faceless corporate entity. Buying local is currently “in” and many consumers gravitate towards local, personable businesses. Customers that frequent their local merchants tend to give a strong level of loyalty to them, especially those companies that get involved in and give back to the community.

Less bureaucracy

Bureaucracy tends to lead the customer through various phone calls, prompts, transferred calls and sometimes a sluggish response (of course, not all corporations are slow). A small business has total control and ability to react quickly to any issues that arise. Higher satisfaction leads to a loyal customer base which can be cultivated and nurtured. Small businesses, simply due to the fact there aren't dozens of departments and hundreds of personnel can resolve problems through the handful of employees they do have. Which leads to the next point...flexibility.

Flexibility

Small businesses have more control over their service, price or another aspect of the selling process. There is no need to call corporate headquarters or follow organizational policy when making decisions - be they day-to-day operations, installing new technology or pretty much any other important actions that need to be made.  

Reach a large audience

Another benefit the small business enjoys is the fact, thanks to the Internet, companies can stay local but still reach an international market should they choose. Today's small businesses can have a global presence and have a better ability to prove "size doesn't matter". With the vast exposure the Internet affords, the little guys are no longer left out in the cold because they too can have a prominent presence on the web.

While there are definitive advantages to any structure of business, there are those strategic benefits small companies have over their larger counterparts. Customers like to know they can personally connect with the people they do business with and this goes a long way for the ability to develop local customer loyalty.