Leveling the Playing Field for Small and Midsize Businesses

Big businesses have always had big advantages in areas such as hiring, processes, customer service, and marketing.  Now the playing field is being leveled. How did this come about and what does it mean to your business? Consider the following:

Economies of Scale: The major advantage of big business was the ability to leverage huge resources to produce commodities at a lower price. It’s still an advantage, but it is one that only exists on a global basis. Once a product is a commodity, it is almost by definition becomes a global commodity. And the ability to outsource production of a global commodity and then add value locally is available to any company—large or small.

Personal Service: In a world where the same product can be produced at a competitive price anywhere in the world, service becomes a differentiator. But large enterprises and customer service simply don’t go together. When customer service really works, it is because it is personal, focused, and knowledgeable about the specific customer—things large companies with tens of thousands of customers have trouble doing.

Hiring: People have always sought out larger companies for the opportunity to advance within the organization. But repeated downsizing and reorganization has virtually erased any advantage large organizations have in hiring. And new technologies that make it easy for people to work virtually increases the hiring reach of smaller organizations.

Technology: As IT—computers, servers, routers, software, services—gets cheaper, more powerful and more connected, technologies that were only available to the Fortune 500s of the world become available to much smaller companies. A “small business solution” no longer needs to be a watered down version of the big business variety. While the scale may be different, the feature functionality may be identical.

Marketing: The primary options for marketing were always the huge mass market venues: television, radio, magazines, newspapers. The Internet and now social networking has changed all of that, allowing companies to target niche demographics far more cost effectively through vehicles like pay-per-click search marketing, the medium that has fueled the rise of Google.

None of this means you should create a business plan that specifically targets the Fortune 500. What it does mean is that no market should be dismissed out of hand as off limits just because of the size of your company.  Even as a small to mid-sized business, you can now take advantage of new technologies, marketing and global supply chains to grow and compete more cost-effectively. The playing field is still a playing field—it’s competitive—but not out of reach. All of the factors mentioned above have made it more level than ever before, and that’s good for small and midsize companies.