The problem with small and medium-sized businesses right now is not the economy. It’s not the government (although it is certainly trying hard to suck the life out of small businesses).  It’s not even lack of money in the hands of potential customers.

The problem is that too many small businesses are trying to act like big businesses, so they effectively kill their ability to grow right now.

Here’s what big businesses are doing that every small business should avoid…

1.  Frightening their employees

Go into any larger corporation and you will find terrified employees. They are barely productive and (even worse) they are fearful of suggesting anything that might not meet with immediate approval from their managers.  And, if you are over 50 years old and not on the “fast-track” to the top, you know the laser targeting system is seeking you out.  Most wonder what day it will be when they find they have been terminated or “eased out” for nothing they have done other than to make someone higher up unhappy.

Small and medium-sized businesses have the advantage of being able to encourage and nurture employees in ways larger businesses have long forgotten.  They can be more flexible in how they work with employees.  They can say encouraging things to employees that larger companies would be terrified to say to theirs (for fear that the employee will start to demand more).  Also, because managers in smaller companies are more visible to top management, they can be held more responsible for encouraging employees to perform better than in large corporations where mid-level managers are often allowed to create their own hidden “kingdoms.”

2.  Playing games with their employees’ money

There is a rule in life:  Don’t mess with people’s money. You can get away with a lot of things, but playing games with people’s income stream is not one of them.  Even if the employee doesn’t rebel immediately, you will pay the price sooner or later.

All too many larger companies are finding ways of redistributing costs to employees or otherwise lowering effective income.  Historically, one of the few benefits of working for a larger company was a reliable income stream.  That has disappeared in large part.  From what I have seen, there is even less security of a reliable income stream at a larger company than in a mid-sized company these days.

Smaller companies should never fall into the trap of trying to make up for lack of company marketing by taking it out of the pockets of employees… especially by basing changes upon anything other than performance. 

Most people would rather work for a smaller company with a friendlier work environment, more contact with upper management, and more trust that their performance will earn them the rewards they deserve. Don’t give up that advantage.

3.  Not investing in building market influence

Big businesses (for the most part) are not investing in increasing their market influence right now.  Most CEOs are so focused upon keeping costs under control to create attractive short-term bottom line results for shareholders that they are not even thinking about expanding their market influence efforts.

In most markets, small and medium-sized business thrives only with regular, creative marketing and influence-building. In tough times, that is even more true.  The advantage is that people have money, and those people want to spend it with businesses who will cater to their self-satisfaction and personal significance (two critical parts of the “Alpha Factor” model).

Those with a lot of money are looking for ways to spend it, because more and more are fearful that coming inflation will take away their buying power.

Those with little money are a bit more fearful, but they are still willing to spend (and spend much more) for things they need from businesses who make them feel good about themselves and make them feel that other people feel good about them, as well.

While smaller companies are still dependent upon the vagaries of the marketplace, they actually have far more means to increase revenues during tough times than larger businesses do.  They are closer to the customer, so they have more opportunities to increase their influence.

Conclusion:

Small businesses can grow significantly during tough times like these. What makes that happen is 1) encouraging and nurturing employees, 2) helping employees see the path to some level of reliability in their income stream, and 3) investing wisely and creatively in influence-building activities, products or services, and marketing.

Question:

What have you seen done by small and medium-sized businesses recently that has helped them increase their influence in the marketplace?

Wes Ball in author of “The Alpha Factor – a revolutionary new look at what really creates self-sustaining success.” He has helped companies ranging in size from the Fortune 100 to small local businesses create dramatic, sustainable growth without discounting.  He is also founder of The Alpha Business Academy which is specifically designed to help small and medium-sized businesses grow dramatically even during this tough economy. Wes can be reached by email at w.ball@ballgroup.com.