Maximising your small business advantages

Copyright (c) 2009 Alan Gillies

Everybody wants to be a big player - whether it's a tiny company or an individual employee! A lot of people seem to have the notion that "Bigger is Better", but recently this notion has changed, and the new concept of "Small is Big" has come onto the scene.

It is usually true that the bigger you become the more profit you'll earn through a higher overall sales threshold, and the more efficient you get in your operations, the greater status you will eventually achieve. But there is another side to this example - something really unfortunate, which is that the larger you become the more general risk you will deal with, developing increasingly inflexible and out of control individual client relations.

Small firms are much more focused in their approach because there is a much greater possibility of innovation and experimentation in their in-house operations. These small companies may not be able to implement the benefits of "global economics", but they are certainly open to every advantage of "local economics". In the present scenario small businesses are more profitable and growth oriented, as they have the potential to earn significant levels of profit and growth - at unprecedented levels, which percentage wise, big businesses cannot possibly match.

Small businesses are far more flexible than big businesses, and they can easily adapt to almost any changes if the need arises, as they are able to rapidly implement informed decisions in a short span of time. Small businesses are successful because they know what they are good at - and they do it, effectively and efficiently. They can meet the requirements of their customers in an near ideal way - regularly pursuing personal interaction, with the common result of an ever expanding number of long term relationships. Small businesses have actual direct communication with their employees and stakeholders, giving them much more control over their operations so they are better able to integrate and coordinate all sorts of activities.

Also, with respect to the stock market, there are numerous occasions where we find that stocks of small companies consistently outperform the stocks of their big business counterparts. Their stocks can sometimes earn very high returns for their shareholders and at times may even be less risk prone. During really difficult periods of the market, there is also much less impact on their share values compared with the stocks of big businesses. So what do you think, what matters most - thinking big or becoming big?

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