In many ways, the explosion of small and medium-sized businesses in the UK represents great news. This is particularly true for the nation’s economy, with independent businesses considered to be one of the primary engines for growth and expansion in the modern age.
Make no mistake; small business in booming in the UK. According to the latest Business Population Estimates report, Britain had a million more SMEs operating at the beginning of 2016 than they did in 2010. This represents a sizeable increase of 23%, while it also dwarfs the amount of larger corporations that have been established during the same period (9,000).
How to Gain a Competitive Edge for Your Small Business
From the perspective of each individual start-up, however, this is more of a challenge than it is a reason to celebrate. With the small business space becoming increasingly well-populated, for example, firms are more likely to encounter intense levels of competition and potentially smaller margins (depending on the precise market that they operate in, of course). There are also considerable issues caused by compliance across a number of business elements, from energy usage and sustainability and tax requirements. In fact, it was recently revealed that firms with class 05-08 energy metres were required to switch to new, automated metres from November 5th, in order to drive energy-efficiency and minimise business electricity costs.
With this in mind, it is crucial that start-up ventures operate strategically and knowledgeably while seeking out every conceivable competitive advantage if they are to be successful. Here are some examples: –
Create Competitive Price Points and Share your Savings with Customers
If we accept that your profit margins are going to be squeezed to some degree as a fledgling start-up, it is better to control this as a small business-owner and offset any potential losses with a high volume of sales. There are two key elements to achieving this, namely the creation of a competitive pricing strategy and a willingness to share your savings directly with customers.
In terms of the former, you need to determine thresholds for your profit margins, including a minimum requirement and your absolute ideal. This creates a degree of flexibility in which you can operate, enabling you to structure your pricing to suit the nature of the market. Start-ups that are forced to compete aggressively for a smaller market share can lower their prices slightly to achieve a higher volume of sales, for example, while those with less competition can scale their price points accordingly.
From the perspective of sharing savings, you will need to consider any discounts that you earn through commercial partnerships and strive to translate these into a direct consumer benefit. Let’s say that you have reduced your shipping costs by partnering with a service partner like TNT Direct, for example, and can now distribute goods for less. If this increases your profitability by 5%, it may be worth looking to reduce the cost to the consumer by at least 1% as a way of maintaining competitiveness and building loyalty.
Just keep your margins in mind at all times, and try to maintain the balance between fairness and your bottom line profitability.
Capitalise on Growth in Other Markets
Sometimes, the difference between success and failure in the business world can come down to creative thinking. After all, while firms that follow tried and tested strategies are likely to remain trapped among the herd, those that think along non-linear lines have a greater potential to stand-out and succeed.
An innovative example of this is to extend your product or service range in line with growth trends in other industries. The Motorhome sector recently announced an impressive 20.4% increase in sales and new registrations, for example, which equates to roughly £150 million across the globe. This clearly represents a growth market, and one that is appealing to an increase range of consumer demographics.
For small businesses that design and sell furniture or interior fixture, this creates an opportunity to bring new products and ranges aimed at the rising number of motorhome owners. This can trigger a significant spike in sales while the market booms, while it is also the type of thinking that can give you a clear edge of less progressive competitors.
The key, of course, is to pay careful attention to alternative markets, identifying potential gaps and opportunities that your companies expertise can fill. You must also adopt a forensic approach to costing, as bringing new products to market will incur costs that must be offset by potential sales increases.
Create a Story Behind your Brand
Last, but by no means least, we come to the way in which your small business brand is presented and marketed to consumers. We all know that the modern generation of customers are more switched-on than ever before, and while this means that are increasingly aware of concepts such as value they are also more susceptible to innovative marketing and storytelling techniques.
The last point is particularly important for small businesses in search of a competitive edge, as the ability to create and share a narrative that underpins your brand instantly helps it to stand out in the mind of consumers. This represents a wonderful way of humanising your brand’s identity and voice, creating a personality that bring a fundamental set of values to life.
If you operate in a competitive market space, this can instantly elevate the visibility of your brand and its value proposition among modern customers.
Your blog is a key tool when implementing such a strategy, as it offers you a platform from which you can share innovative content and copy exploring the narrative behind your business. Video testimonials from employees and customers can also add weight to the story, while bring individual landing pages to life with rich media and excellent visuals.