TFT: Why Competition is Your Best Ally—Strategies for Small Manufacturing Businesses
Why You Need Competition and How It Makes You Stronger
Competition is a part of business that you cannot avoid. The key is choosing the battlefields you want to show up on each day. Battles make you stronger, enhance your services, and lead to better products. We know of companies that wouldn't be where they are today without competition, and we can all think of some companies that could really use some. Think of most utilities, for example. So, why do we need competition?
How You Win Battles
As a small business, you have the ability to be more competitive than the "big guys." You are agile and flexible, able to respond quickly to unique customer requests. According to a McKinsey study, agile companies are 70% more likely to be in the top quartile of organizational health, a key driver of long-term performance. When new technologies enter the market, like ChatGPT and AI, you can experiment with different tools to find what works. Let your customers know it's a trial: "Hey, Mrs. Customer, I’m trying out a new engagement platform, so if anything seems off, let me know." Transparency like this builds trust.
You also don’t need to go through multiple layers of management to try something new. Just try it—if it works, great, implement it; if not, move on. Small teams have the advantage of building strong relationships with customers. Introduce them to the billing team, the machine operator, even the janitor. There’s no need for red tape. A study by Gallup shows that companies that focus on customer engagement outperform their competitors by 147% in earnings per share. Use your size to your advantage and foster those relationships.
Smaller is better
Larger companies often try to be all things to all people. But as a small business, you can focus on a niche and offer the best possible solutions for that specific market. Harvard Business Review found that companies that strategically focus on their niche markets can achieve 40% higher profit margins than those that spread their resources too thin. You have the flexibility to innovate on a smaller scale, making improvements that might not make sense for a larger company but could be a game-changer for you.
For example, you can set aside $100 or $1,000 each quarter to test new software or processes. Small-scale innovations can lead to big results. According to a report from Deloitte, 60% of small businesses that invest in digital tools report higher revenue growth. You don’t need millions in R&D; just a few thousand dollars can make a huge impact.
I highly recommend Christopher Lochhead’s book Niche Down.
Lean and Mean Because You Have to be
You’re lean and mean not by choice but by necessity. Larger companies spend millions on consultants to help them become leaner. As a small shop, you do this naturally. Research by BCG shows that small businesses with lean operations are 30% more likely to grow their market share than those with traditional operations. This lean structure allows you to offer competitive pricing, meet customers where they are, and exceed their expectations.
Remember competition is part of the business game. You are small and lean and mean so you can compete in a different way. You can fight each battle a little bit differently. This is guerilla warfare and you are the key strategist for your success. Go farther and conquer!
Action Step:
Reflect on what makes you lean and mean as a small business. Reflect on the ideas in this post and pick one new thing to try this month.
Additional Recommended Reading:
"The Competitive Advantage of Small Business"
"How to Use Agility as a Competitive Advantage"
"Winning in Niche Markets: A Guide for Small Businesses"
"Operational Efficiency: Strategies for Small Manufacturers"
"The Importance of Building Strong Customer Relationships in Small Business"