The Advantages Small Companies Have Over Big Businesses

Guest post by Bob Drainville, President, Timesheet Mobile

If you’re a small business owner, it’s natural to hope that the company you founded will one day become a globally-known corporation. However, it’s important to recognize that there are a number of key benefits that small companies offer their employees and customers that their larger counterparts can’t.

Culture

There’s something special about a company that is run entirely by people who have been there since the start. The employees are bound by a common story about the company’s founding and likely share a certain philosophy about the job that leads to a distinct work culture. That culture not only sets the company apart as a workplace, but it may very well be part of the brand that customers buy into.

The larger a company becomes, the harder it is to maintain the distinct culture that characterizes many small businesses. For instance, a roofing company might begin with a few experienced roofers operating out of a subleased space. As it grows, however, it will move into its own conventional office space, add white collar staff (human resources, bookkeepers etc) and put in place more concrete rules and policies that weren’t necessary when it was just a few friends working together.

Flexibility

As a company grows, it necessarily becomes increasingly compartmentalized and bureaucratic. Even the most efficiently-run major companies comprise large bureaucracies in charge of different aspects of the business. As a result, big companies are not nearly as agile as small businesses or as able to quickly change. If you, as the business founder and owner, want to make a company-wide change, your decision has to be filtered through multiple layers of leadership across different departments.

Small businesses, in contrast, can make big changes much more quickly. If you’ve only got 10 employees, it doesn’t take much to convene a meeting of the entire workforce – even if it’s a mobile workforce. Similarly, smaller companies can more quickly identify and react to problems. The lack of complex chain-of-command allows employees to have direct access to the owner, who can quickly address whatever problem a worker encounters, whether it’s a product malfunction, a demoralized workforce or accounting errors.

Finally, because of their flexibility, small businesses are in a better position to quickly adapt to  market changes or to target certain types of customers. If, for instance, you’re a major general contractor and you realize that you’re better off focusing on certain types of projects, it may be a major challenge to pivot because you likely already have a large number of employees and resources tied up in the other types of projects. Those types of changes are much easier for small businesses to make.

Specialization

Big businesses are focused on high-volume opportunities that can generate significant revenue. As a result, many opportunities remain for specialized offerings targeting a niche market that isn’t being served by the largest companies. The benefit for small businesses is not just that they have a chance to fill that void, but that they can develop a reputation as specialists who provide that service better than anybody else.

For instance, a boutique contractor that focuses exclusively on luxury residential projects can deliver a clearer marketing message that distinguishes it from its competition in the construction arena. Its authoritative claim to a certain type of service also allows it to justify charging more, which allows for faster growth.

Communication

The family mentality of a small business facilitates better communication between employees and those running the company. Workers can communicate directly with their boss, who they likely know on a first-name basis. If there’s a problem with a project or a customer, a construction worker or electrician can give the business leader a call (or perhaps message them through a team messaging app) and find out what to do immediately.

Communications can present a major challenge at a big business with a complex chain of command. The top business leaders don’t have the time to address every day-to-day issue. That forces them to rely on lower-level managers to communicate with workers on the ground.

That means that issues that could otherwise be resolved immediately will sometimes have to wait as the message makes its way from the job site, up through management, and then back down again. There is also the chance that some information will never reach the boss, leaving the owner out of the loop on critical matters.

Employee development

An employee of a large company cannot expect to get experience in all areas of the business. They will generally be assigned a very specific role, be siloed in a department, and have minimal interaction with other critical branches of the company.

A small business, however, provides the chance for employees to get a glimpse of all of the moving parts involved with running an enterprise. A plumber hired to be part of a three-man plumbing outfit will have responsibilities usually delegated to a different employee in a larger company, such as bookkeeping, marketing, account management, scheduling employees and project management and workforce management.

Small businesses therefore provide an opportunity for employees to develop strong business management skills. Coupled with their strong on-the-ground experience, those skills allow employees of small businesses to become better-rounded and more valuable professionals because they understand every aspect of the trade they’ve involved in.

Customer Relationships

From a customer’s perspective, the best thing about buying from a small business is that you are rarely dealing with somebody who is merely a salesperson or a customer service representative on a script. Instead, you’re buying directly from the business owner, who likely has a deep knowledge of and passion for the products they’re selling you. With nobody to answer to but themselves, small business owners will tend to have more flexibility in how they interact with you, including offering special deals or discounts.

As a business grows, at some point there are simply too many customers for the founders to serve on their own. Those duties have to be delegated to other employees, who are less likely to have the experience with and knowledge of the products/services and the needs of customers.

You can and should try your best to instill your philosophy of customer service in your employees, but there is invariably a personal touch that gets lost when those who founded the business are no longer interfacing directly with customers.

That’s not to knock big business…

At the end of the day, businesses large and small play a critical role in the global economy. Big businesses can at times offer lower prices and better-serve large customers. However, bigger is not always better. Small businesses fill niches that their larger competitors often overlook and can serve customers more directly and with greater flexibility than their larger competitors. The world would simply not be as interesting or dynamic, culturally or economically, without small businesses.

Bob Drainville is the president of Timesheet Mobile, a GPS-enabled time tracking, scheduling and workforce management technology company. Timesheet Mobile’s solutions are used by companies that employ a significant mobile workforce worldwide, in industries as diverse as construction, transportation, healthcare and many others.