At Mitchams Chartered Accountants we can provide businesses in the Somerset area with assistance and advice on a wide range of business issues. Here are some thoughts on how small businesses can gain a competitive advantage...
In a world of large, multinational corporations, it might sometimes seem that smaller businesses cannot effectively compete. But there are also advantages to being small, and good planning and management can help you make the most of your strengths.
Use your advantage in the labour market
In today's world of mergers, downsizing, and outsourcing, working for large companies is losing its appeal for many employees. Not only is job security becoming a thing of the past, job satisfaction is decreasing while workplace stress is increasing.
Conversely, working for small and medium-sized firms is becoming increasingly attractive. Research suggests that employees of SMEs are much more satisfied with their work-life balance, and they find that their roles are more varied and personal than in a large company. With good planning you can use this advantage in the labour market to attract higher calibre employees - and to retain those you already have.
Look to your profits, not your earnings
Smaller businesses also have a key advantage over large companies when it comes to a long-term commitment to innovation.
Often the investment decisions of public companies are driven by the short-term contingencies of the stock market and pressures from major shareholders, which can narrow their options as far as investing in innovation is concerned. SMEs, by contrast, are largely free from these restraints. They can focus on long-term profitability rather than short-term earnings.
Use nimble strategies to stay one step ahead
Conventional wisdom says that the key to success is to increase your share of the market, which implies that businesses that command only a small market share are at a disadvantage.
But this need not be the case. Generally, the larger the share of the market a company commands, the more remote it becomes from its customers. In smaller firms, by contrast, the managers tend to remain closer to their customers. This enables them to read changes in the marketplace sooner and more accurately, and to develop responses more quickly than larger companies are able to.
Small businesses have numerous advantages in the marketplace, but they need to develop the strategies for making the most of them. We can help you improve the dynamics and the profitability of your business.
If you are in the Somerset area and are looking for support and help from experienced accountants and business advisers, contact Mitchams Chartered Accountants.