by Robert Gricius

Created on: June 01, 2008

Bigger is not always better, not in business, not in life; but to be a successful "David" vs. the Goliath's of the business community, here are some subtle nuances to two of the baseline tried and true basic lines of advice.

1. "Develop a niche service or product". Yes, a small business cannot simply compete against a larger business by selling the same product or service at a lower price. Yes, it is important to identify and capitalize on a business idea not previously identified or focused on by your large competitors; but that is not enough. The business concept must also have, to coin a phrase used by many investing gurus, a "wide moat". Simply stated, a "wide moat" means that Goliath company #1 cannot see what you are doing/producing and decide to compete directly against you without a significant investment of resources. For example, if you are selling a unique educational toy for children 4-7 years old, but it can be easily duplicated by Goliath #1, (and you have no patent protection or the resources to defend your rights therein), your moat is non-existent. It may be a seminal item that changes children's lives forever, but when/if Goliath#1 decides to enter the fray and can easily manufacture a "similar" item and price it far below your level, your "niche" just disappeared. A "moat" can take many forms; but make sure you have one before you unleash your better mousetrap on your defined customer base.

2. "Provide personalized, outstanding customer service". Yes, you must give your existing customer base better, in-person attention that far exceeds the "customer rep" calling on the same company to take this business from you. Fortunately, this is not a terribly difficult proposition based on the sorry state of customer service that exists in most "Goliath" companies. A more refined version of this line of advice is specifically, what can you do really stand out from a customer service perspective; one answer/approach that has worked for my companies is to provide a service/product to an existing company that is not covered in your engagement letter/contract, and don't charge them for it! Of course, make sure it is something that they consider of value, and, if possible, provide this service/product by using your existing resource base so the incremental cost to you is very low. But nothing is more helpful to your business relationship then when you deliver an unexpected service/product to an existing customer and they call you to say "now what can I do with new report/gadget that I couldn't before and how much is this costing me?" They will be your customer for life.

There is nothing wrong with standard lines of advice given to small business owners competing against larger competitors, what I think is especially valuable to this important demographic/business segment are specific strategies and recommendations to help all of us "David's' in the world in our classic and recurring battles make no mistake about it, business is war, and the Darwinian process is highly relevant and prevalent in this segment of our world.

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