How UK SMEs Can Compete with their Larger Counterparts

Big business and small business are an entirely different ball game. While big corporations have substantial marketing budgets, employ specialists in every part of their business, and benefit from economies of scale, small companies have much more limited resources.

A survey by the business software company Sage found that only 7 per cent of 1,350 UK businesses believe they have an advantage over their bigger competitors. 

However, it doesn’t have to be that way. Business is not all about lower prices and mainstream media advertising. Quality, flexibility, and customer service are useful tools that can help SMEs to carve out a niche even in the most competitive markets. 

Focus on a niche market and a distinct value proposition

Developing a niche focus is key to success for SMEs. In an increasingly crowded marketplace, the trick is to find a gap and providing a product or service that fills it. 

A UK-based SME, The Config Team, provides bespoke SAP solutions for corporate clients. Managing Director Andrew Moses does not lose any sleep over large IT firms like IBM or Accenture that dominate the enterprise systems market. 

He says, “The key to competing as a small player is to stay focused on your market and not be tempted to deviate into areas either side of it, as you then run the risk of diluting your offering, and undermining what you have established.”

Differentiate with flexible customer service

While big corporations are often tied up by corporate procedures, small businesses can react to specific customer requests with greater flexibility. Leveraging this advantage can help SMEs to stand out in the market. 

Business coach Heather Townsend says: “Small firms will never win on price, but they can compete on value and service, while the more specialized their product or service, the better. They can be flexible and adaptable to meet customers’ needs, and through the clever use of social media, they can make their brand more ‘loveable,’ which gives them the edge.”

Build a personal relationship with customers worldwide using digital tools

Social media and other digital channels enable SMEs to build a unique brand and personal relationships with their clients. Large corporations mostly rely on automated digital tools, without the personal touch a small business can provide. 

While customers also identify with corporate brands, they tend to respond more positively to personalized messages. Heather Townsend says, “These online resources do not only level the playing field for businesses. Used in the right way, they can give the smallest firms a real competitive advantage.”

A clear value proposition, flexibility, and personal relationships are potent tools for SMEs. Customers don’t care how large the company is; they want the best service and the best product. So remember, bigger is not always better. 

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