Payment Processing


Small business can compete with big business


BY RICK SMITH

Starting and running a small business is difficult and many business owners feel they can’t compete with the big companies. One big advantage the big guys have is the ability to hire specialists for every job in their company like bookkeeping, HR, sales, etc. Many small business owners feel they must be jacks of all trades and try to do everything themselves and the jobs they can’t handle get ignored.

There are alternatives to doing it yourself or just ignoring the problem. The first option is to hire an outside agency for the job. This is especially affective for jobs like bookkeeping, tax preparation and even HR. The other advantage is that you share an expert with other small businesses and share the cost. The second alternative is hiring a company that will work on reducing your costs for a percentage of the savings. This works good for phone and credit card processing.

The first step is to determine which jobs you can/should do yourself and which you need to find an alternative for. Factors to consider are: Your own expertise. If you have the expertise and the time to do the job you could continue doing it. You should determine your hourly value to your business. Does it make sense to pay an outside firm to free up your time for other jobs that need more of your attention or that you can’t afford to hire someone for? If you hire someone, make sure they are not accepting compensation from any other source. Whoever you hire, ask for references. You wouldn’t hire a new employee without checking references (hopefully) so you shouldn’t hire an outside firm without checking them out. If you are considering hiring someone to do a job, look at all of the costs in doing so and dealing with the various government requirements. Often when all is taken into consideration, hiring just doesn’t make sense.

Having worked in big companies and run my own small company, I’m convinced that the advantages big businesses have are overstated. Yes, they get lower costs for volume so competing on price is just not smart. I know from painful experience that decision making and change is painfully slow in large companies. Often decisions are made because they enhance the status of the person making the decision which often results in poor results.

There are two sides to running any business: the operational side and the sales side. Many business owners are very good at sales but poor at operations. It is very rare that one individual is good at both. Business owners need to decide where their expertise lies and dedicate their time where the best return will be. Small businesses have the advantage of fast decision making and flexibility that big businesses can’t possibly compete with. They also have their ear to the ground to get the unfiltered feedback needed to make good decisions. Compete where you can and don’t compete where you can’t. For instance, going head to head against Walmart on price is not smart. But Walmart can’t offer the service and quality goods that small businesses can. Treat your customers the way you would like to be treated and like they are in charge of your success because they are.

Stew Leonards, the highest volume retail outlet in the U.S., has a simple policy:
Rule 1: The customer is always right!
Rule 2: If the customer is ever wrong, re-read rule 1. BL


SmallBizAssist is a small business consultant specializing in payment processing. For more information, contact Rick Smith at 905.714.1487, 1.800.946.2367, 905.317.5560 or visit www.smallbizassist.ca.