Staying competitive as a small business can be challenging. In Canada, between 2016 and 2020, the number of small businesses that disappeared annually was just over 96,000[1]. Many factors play into a business closing its doors; some a business owner can control directly and others not. In this two-part series we look at the internal and external factors at play and what small business owners can do to stay competitive.
Part One: Internal Factors
The management of your business and how you handle day-to-day operations primarily contribute to the internal factors you can control (albeit there will be times when you don’t feel this way!) The aspects of your business that you have more control over include:
- Marketing Strategies: This includes decisions regarding advertising, promotions, branding, and customer engagement.
What can I do to stay competitive?
Know Your Market: Understand your target audience’s needs, preferences, and pain points. Regularly gather feedback and adjust your offerings to better meet their demands.
Build a Strong Brand: Develop a clear and compelling brand identity. Consistent branding helps create a recognizable image and builds trust with customers.
Differentiate Yourself: Identify what sets your business apart from competitors. This could be a unique product feature, exceptional service, or a niche market focus.
2. Product or Service Offering: This includes the design, quality, and features of your products or services.
What can I do to stay competitive?
Optimize Your Online Presence: Invest in a professional website, engage in social media, and consider online advertising. An effective online presence can help attract and retain customers.
Focus on Quality: Ensure that your products or services maintain high standards. Quality can be a key differentiator and helps build a strong reputation.
3. Customer Service: Your customer service strategy includes how you handle customer interactions, complaints, and support.
What can I do to stay competitive?
Offer Exceptional Customer Service: Provide personalized, attentive service that makes your customers feel valued. Building strong relationships can lead to repeat business and positive word-of-mouth.
Use Technology as Support: Even a simple Customer Relationship Management (CRM) tool can improve a customer’s experience. Store and track customer information and look up customer communications quickly. Your customers will think you know them personally (and some you will!)
4. Financial Management: This includes budgeting, accounting, and financial planning.
What can I do to stay competitive?
Manage Finances Wisely: Maintain a clear understanding of your financial situation. Effective budgeting, cost management, and strategic investment are crucial for long-term sustainability.
Engage with a Financial Expert: Work with a trusted financial expert to plan, invest and borrow. Receiving sound financial advice can also improve your mental health and lower stress.
5. Human Resources: Hiring, training, employee development, and workplace culture are included in this internal factor.
What can I do to stay competitive?
Invest in Your Team: Hire talented individuals and invest in their development. A motivated, skilled team can drive your business forward and provide a competitive advantage.
Focus on Culture: Every business has a culture that is dictated and supported by the leaders. If you haven’t defined what kind of culture you want your business to have, do that first and then determine the methods you will use to enforce this culture daily.
6. Strategic Planning: This includes the reinforcement of your business goals, vision, and strategic direction.
What can I do to stay competitive?
Stay Innovative: Continuously look for ways to improve your products, services, or processes. Being open to change and new ideas can help you adapt to market trends and consumer expectations.
Adapt to Market Changes: Be flexible and willing to pivot when necessary. Market conditions can change rapidly, and adaptability is key to staying relevant.
Network and Collaborate: Build relationships with other businesses, local organizations, and industry groups. Networking can lead to new opportunities, partnerships, and insights.
Monitor Competitors: Keep an eye on what your competitors are doing. Understanding their strengths and weaknesses can help you identify areas where you can excel or improve.
7. Business Operations: Processes and systems within your business, such as production methods, quality control, and inventory management are included in a business’s operations.
What can I do to stay competitive?
Leverage Technology: Utilize tools and software that can streamline operations, enhance productivity, and improve customer experiences. This includes everything from accounting software to customer relationship management (CRM) systems.
Managing a competitive business takes time and work. Knowing where to focus your time and energy (when it feels like everything needs your attention) can be overwhelming. We hope this list of internal factors is something you will consider adding to your business model to stay competitive.
The next part of our mini- series will focus on the external factors that contribute to your small business remaining competitive.
Stay tuned!
[1] https://ised-isde.canada.ca/site/sme-research-statistics/en/key-small-business-statistics/key-small-business-statistics-2023
-Sarah Elchuk is a member of the Revenue Growth Team at Directwest
