Guarding Your Turf

How the small guy can fend off big biz encroachment

Louis Roberts couldn’t believe it. Did his largest account really just award the $60,000 Website design project to a much larger advertising agency?
The president of Loden Design, a one-man graphic design firm in Minneapolis, rarely went head-to-head with larger competitors on projects of this size. Yet in February 2002, he’d noticed more large firms taking an interest in his smaller clients. Now his business, which grossed $150,000 in revenues for 2001, is down 25% as these bigger players enter what was traditionally his sandbox.

“It’s not something they’d normally tackle,” says Roberts, who bid $50,000 to $80,000 for the project. To deal with the competition, Roberts took it to the streets, handing out marketing flyers in downtown Minneapolis and expanding by approaching mid- to large-sized corporations to form partnerships. Roberts isn’t alone in his plight. Though there are no hard statistics, the stories from small business owners prove that in today’s shaky economy, a growing number of large firms are chasing clients that at one time operated far below their radar–to the chagrin of the small entrepreneur.
At NumberSpeak, a Dallas-based firm that handles finance and accounting solutions for small businesses, Yvonne Burns-Thevenot, president and CEO, says roughly 70% of her high-tech clients are experiencing intense competition from much larger firms. The positive of being small, Burns-Thevenot says, is that close customer contact comes almost naturally. “Because a small business is on the ground floor with its smaller customers, it will often get the deal,” she says. “Larger companies lose because they aren’t in the trenches.”

Small business owners trying to keep larger competitors away from their client base may want to consider these strategies:

  • Stay In Constant Contact: Large companies won’t always put out the time and energy to visit a small client, leaving the door open for a small business to fill that human need. “Large companies often forget that they’re doing business with humans and feel that a Website and a customer relationship management (CRM) system will win the day,” says Burns-Thevenot. “In the end, it doesn’t.”
  • Focus on Your Strengths: Capitalize on your firm’s strengths, says Burns-Thevenot, instead of trying to chase down business that’s out of your reach. “Start by clearly defining your own company’s core competency,” she adds, “then work that single strength in a way that a larger competitor cannot afford to do.”
  • Can’t Beat ‘Em? Join ‘Em: Many small business owners successfully align themselves with larger companies, including Burns-Thevenot, who often works with large accounting firms to provide emerging business consulting to their clients. “Get to know your competitors,” she says, “then find out what they’re doing wrong and fill that need.”
  • Surround Yourself With Good Advisors: Create a team of knowledgeable professionals–a lawyer, financial advisor, or marketing pro, for example–to help navigate competitive waters.
  • Make E-Commerce a Priority: E-commerce is the great equalizer of the 2000s, according to Ronald N. Langston, national director for the Minority Business Development Agency (MBDA) in Washington, D.C. With the right e-commerce strategy, he adds, customers don’t even have to know how “big”
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