The key to success of small businesses

Every business has its own problems, and small businesses are not an exception. The issues of small businesses normally come from two main reasons: the lack of capital and credit, as well as the weaknesses in management skills. However, it does not mean that small businesses cannot compete with larger firms. The key point is that small businesses should identify which are their strengths and weaknesses, and then use the strengths to make up for the weaknesses. One golden rule for small businesses is that never try to compete with large firms in their markets because the big corporations often have stronger financial status, have more experiences, and more human resources, moreover, they are often the market dominators in their own market. Instead, small business should focus its limited resources on the niche markets in which it has comparative advantages over large firms.
One other important advantage of small businesses is the close relationship between the firm and the customers whereas the bureaucratic of a large company tends to eliminate the link between management and customers. This kind of relationship helps small businesses have a better awareness of the customers’ needs as well as a more exact prediction of the trends in the market. By having an accurate forecast about the changes in the market, the firm will be more proactive in setting appropriate plans to deal with these fluctuations. Furthermore, the company can take advantage of this connection as an effective way to advertise for their products as mouth-to-mouth advertising is always the best advertising.