November 2006 - Small Business News

Top Ten Tips to Create a Competitive Advantage for Your Business

As someone with an interest in a small business, you probably put a lot of work into the running and growth of the business; but what are the factors that separate high growth businesses from slow growth or static businesses?

Research by Grant Thornton has found that the fastest growing companies (of all sizes) focus on finding and utilizing the best people, adapting to the market, retaining customers, and providing excellent customer service. They found that static businesses (those with very little growth or none at all) put less emphasis on service, and more on branding and competing on price.

The research shows that investing in finding and training the best employees possible is one of the best investments your business can make; and that providing good customer service is one of the big factors that separates growing businesses from static ones.

Grant Thornton has also produced a useful list of ten top ways to give your business a competitive advantage against your competitors:

1. Understand in detail the needs of your customers, and make sure your business is structured to deliver what they need.
    

2. Do everything reasonably possible to enhance your customers’ experience every time they interact with you. This could be as simple as providing good customer service quickly, and dealing effectively with complaints and problems.
    

3. Try to develop an environment of maturity where the creativity of your staff can be released. As part of this, be sure that performance expectations are clearly communicated.
    

4. Ensure that your reward structures (I.e.: Pay, bonuses, promotions) are in line with the objectives of your business; this means that your staff are given incentive to behave in ways that contribute effectively to your business achievement.
    

5. The quality of your products or services is important; but because change happens so quickly (especially for technology based businesses), it is the way in which you interact with your customers that will separate you from your competition in the long run.
    

6. Being first to the market is an advantage, but not if it means sacrificing quality. It is better in the vast majority of cases to be third to market with a flawless product than first to market with a substandard one.
    

7. When making tactical (short term) decisions, make sure they are part of a long term strategy.
    

8. It is extremely difficult to customise and compete on price at the same time. Avoid customising your product or services unless it delivers a profit margin.
    

9. Understanding your market, and being flexible and responsive to changes in it is always cost effective.
    

10. Competing solely on price is rarely an effective tactic for the long term. It is usually better to try and compete on service delivery

Find out more about improving the competitiveness of your business in our Marketing and Sales portal.