Some people have a business idea and get scared off by the prospect of the big competitors they would inevitably face. Others have the nerve and will to step into the arena prepared to win against the giants--and have remarkable tales of success as a result.
As part of a summer-long celebration of small business owners, Capital One Spark Business and Inc. hosted “Competing with Giants: How Small Businesses Solve Big Business Challenges,” a panel discussion held at Inc.’s Fast Growth Tour in San Francisco on June 6. Moderated by Jenn Garbach, head of Brand & Customer Marketing, Small Business Card at Capital One, three business owners shared their success stories, giving attendees solid, actionable advice as to what it takes to win against giant competitors.
Here are some of the insights gained:
Stay tuned to market trends
In the flower business, competitors range from household-name delivery services to national supermarket chains. So, when Christina Stembel, founder and CEO of San Francisco-based Farmgirl Flowers, No. 738 on the 2018 Inc. 5000 list, launched her business, she carefully considered what was working for each segment and what wasn’t.
Stembel studied young consumer buying patterns and found that, while they generally preferred to make purchases online, they weren’t doing so for flowers. Her goal was to create an enjoyable online flower-buying experience to attract this segment. The fact that she is bootstrapped means that she makes the decisions for her business, allowing her to be more responsive to her customers’ preferences than larger companies. Farmgirl Flowers’ beautiful website, high-quality flowers, fast delivery, and sustainable business practices all appeal to her target market and contribute to the company’s success.
Recruit the right people
In a tight labor market, finding and hiring talent is a constant concern for small businesses. For Craig Combs, owner of Branson Zipline in Branson, Missouri, location exacerbates the problem. The city’s population is just over 10,000 people, but it entertains more than 8 million visitors each yearmost of whom arrive between mid-June and mid-August, he says. Finding seasonal talent to accommodate tourists--and competing for them against Branson’s myriad attractions, which range from theme and water parks to museums and outdoor adventures--is always a challenge.
Combs works with local colleges to recruit students and encourages his employees invite their friends to work for his company, too. When employees enjoy working together, they tend to stay and attract others. And that friendly, fun environment translates to a better experience for customers, he says.
Grow your own way
Growing your business to the perfect size can be tricky. While many businesses target fast growth, expansion for its own sake may not be a good idea. For example, the fast-casual restaurant business has a number of giant brands like Panera, Chipotle and Panda Express, but “there is a lot more success to be found in the small to medium-size businesses,” says Mike Lenard, founder and CEO of Takorean. Since people are always looking for new types of food and dining experiences, this provides opportunity for newcomers in the market, Lenard says. His chain’s fusion of Latin American and Asian flavors is a good example.
By growing thoughtfully instead of at breakneck speed, he has been able to grow a single food truck into a fast-casual restaurant chain with standalone and food hall locations in Washington, D.C. and Philadelphia. The company has attracted a strong base of employees who are instrumental in helping it grow, and its smaller size is an advantage. “For small businesses, when you're competing with larger businesses at a unit level, you can create a great employment experience and attract the same level of talent as your larger competitors,” he says.
Pay attention to culture
Stembel says one of her big mistakes happened in 2016 when the company grew too fast and she ignored its culture. Now, she devotes roughly 20 percent of her time to culture, ensuring that her team feels valued and treated well.
While big competitors may have the staff to easily adapt to seasonal spikes around holidays like Valentine’s Day and Mother’s Day, Stembel needs all hands on-deck without complaint. The “team” feeling she’s cultivated, where everyone feels invested in the business and its values, helps the business succeed during busy times. “We just work really hard to be able to do as much as we can during those weeks because it will carry us through the slower times,” she says.
Invest in what matters
Growth requires money--and finding the right funding option is essential. While it’s tempting to go after investors for big-dollar infusions to invest in more people or marketing to compete with bigger companies, that’s not always the best choice.
Lenard, who initially funded his business with a friends and family investment, has been creative about bootstrapping, even using his Capital One Spark Business reward miles to fund research trips to Mexico and South Korea. Doing so helped him integrate authentic flavors and design elements that truly differentiated his restaurants in the marketplace.
Carving out success against large competitors is easier with a strong team and culture. For those entrepreneurs who are willing to take on the challenge, enormous rewards await.
Capital One invites business owners to share their own stories of competing with giants at www.celebratesmallbiz.com/shareyourstory.