The Napoleon Complex: Little Companies with Big Attitudes

Last Updated Apr 4, 2011 8:25 PM EDT


By Robert Basso

The memory of the launch of my payroll company remains very clear in my mind. The business was finally open, but there was just one problem: there were no clients who actually needed payrolls prepared. The equipment in the office was fancy-a new printer and a great little computer network. I even had one staff member. Does my mom count?

Nevertheless, the business was operating and ready to take on the giant payroll processors of the world. Armed with unbridled enthusiasm, I began guiding a fledgling venture on a path to conquer an industry-or at least a little segment.

Fast-forward a grueling 15 years. Today, Advantage Payroll Services is a respected independent payroll services provider in the New York metropolitan area. We compete with the big guys on a level playing field. In fact, I've been told that my company is a topic of discussion at industry giants' sales meetings and that some of them strategize to undercut our pricing and discredit us by telling lies to persuade our loyal clients to jump ship. Secretly, it is clear that our competitors respect us. Why do they need to resort to such behavior? It's simple: Many of our clients were tired of the service at larger firms and were happy to find a home with a smaller provider that responds to their needs more quickly and effectively.

Does our situation sound familiar? Whether a small startup or a well-established organization, managers and owners understand exactly what I mean. How can a small business compete on the same level as large firms when they don't have the money for extravagant marketing, can't hire the best sales staff available and can't afford a swanky location?

Here are several strategies to put industry giants in your rear-view mirror.

1. Lead the community scene: Being a small player means businesses have to find novel and low-cost ways to get noticed and be taken seriously. Taking a keen interest in a local, regional or trade community will allow owners and representatives to develop relationships with the influencers that can make a business soar.

Example: When I started my firm it was a goal to be on the board of regional charities and civic organizations. It paid big dividends as some of the company's best clients came from simply taking an interest in the community.

2. Care about a client's entire business: Delivering a product or service at a reasonable price is not enough to be successful anymore. Be on the lookout for ways to enhance a client's business even if it is not directly related to your product or service.

Example: If a health benefits provider and your company are selling services to clients with fewer than 50 employees, the rates for services will be the same with any broker they choose. By offering complementary services like payroll, education savings and retirement planning through strategic partnerships, clients will receive added value and much more than they ever expected.

3. Be different, but recognizable: Stand out from the competition. Find an angle, whether it is irreverence, a slightly different product offering or a twist on your delivery method. Whatever angle is used to raise your profile, it should be different, eye-catching and memorable without confusing prospects or customers about product or service offerings.

Example: A limousine service in the Northeast was the first to introduce hybrid cars into its fleet. The company has tapped into a burgeoning market of travelers who want to be environmentally friendly. In addition to the lower operating costs of hybrid vehicles, this organization stands out for its forward-thinking approach in a sea of lackluster providers. The media has taken notice, the company has received broadcast news and newspaper coverage.

4. Do a better job than your competitors at educating customers: Information is ubiquitous. Virtually anything can be found in just seconds by searching the Web. Still, being a focused source of pertinent and relevant industry information for clients and followers means that they will be happy to visit your websites regularly as a resource, and thankful that you do the research for them.

Example: Recently I received a fantastic white paper from an ERISA attorney that was so well-written and informative that I asked if we could share it with our clientele. He was probably counting on some of the recipients to react this way. The attorney has since done some work for my firm. This is not the type of information that I would have been looking for, but I was pleased to receive it and share it with my customers.

My small firm quietly took market share for over five years before landing on the industry leaders' radars. The reality is that although we are a complete nuisance to them, we're not a threat to their existence. This is the same scenario that most entrepreneurs who choose to go head to head with the giants of their industry face. Many businesses find their local or industry niche allowing them to hold market share and compete. The brilliant and lucky few sometimes find a way to become the big guys, but are they really lucky to become that big? I think I'd rather have a company with a Napoleon complex -- a small company with a big attitude.

This post originally appeared on OPEN Forum, an online community that provides small business owners with expert insights and connections that can help them run their businesses.
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