There are several reasons why small businesses are likely to deliver better customer service than a large company.

Being small means better customer knowledge. A small company is closer to its customer and requires fewer resources to learn what people want to meet their expectation. There is simply no need for complicated systems that hold millions of customer record, nor in depth knowledge at mosaic classification to identify your customer segment to unlock their hidden desires.

Being small also often encourages flexibility. For small businesses, the cost of adapting to volatile market demand and changing consumer preferences are much lower. They could spot a new trend earlier and have the rare luxury of applying common sense over standardized operating procedures.

Furthermore, being small can facilitate trust. Trust is probably the most valuable asset that a business can possess. At the times of large businesses failures and corporate governance scandals, customers lose their faith in huge conglomerate and instead tend to empathize with local companies that have a stake in their community.

While small companies may have” natural “advantages in these customer service areas, it does not means that they are not facing customer related reputational risk .in recent years, small business have been confronted. Most of them are unprepared with the imperative of reputation management. And some have already paid a heavy price for it. Think about small restaurant owners who have seen their bottom line directly impacted by a few bad trip advisor reviews.

On the other hand, large corporations that have more insight on their own reputation might benefit from reconnecting with the strength of small businesses.


When customer know and like you and your employees, they are more likely to support your business provided that you products and services meet their needs. Getting to know your costumers face to face provides your business with a marketing edge that become increasingly important, as larger companies continue to dominate the market place.

Even if you cannot know each customer personally, your employees can pick up where you leave off, especially, if they stay with your business long term. Getting to know customers face to face is natural and important marketing strategy for brick and monitor business, but you can extend this personable quality to your online presence, as well media provides opportunities to infuse your personality into your market. Also, use your website as a venue to tell your story and introduce yourself to your customers.


Small basins can take chance that would be more difficult for large companies. They can test new product in smaller markets, with minimal investment, observing variable and obstacle before deciding to try an idea on large scale.

In fact, sometimes large companies masquerade as smaller businesses when testing new ideas, such as when star bucks opened an eco-friendly location in Seattle under the 15th Avenue coffee and tea.

The relative amonymity of a lesser known brand is an advantages when trying risky ideas, in part because it lessens the possibility of negative publicity if the venture is not successful.


Small business are more nimble than large business and are better able to adapt as market condition change. Because a small business is closer to its customers, it is a better position to hear feedback and observe changing preference. A learn business can shift gears more easily than a large one, especially, if it has not invested hefty in obsolete in frastructure.

With a small business, employees are more likely to be cross –trained, often, small companies do not have the resource or the needs to hire dedicated employees for every business function. This adaptability comes in handy when you need to re think your business model and it enable you to keep quality people or staff and to draw on their knowledge of your business and customer base.


A small business is closer to the market place. Not a few small businesses conduct their operations right inside the market place. Being closer to the buyers, compared with big businesses, they get first –hand information about consumer tastes and preference. Such advantages enable the small business to respond quickly to the needs of consumers. It is not possible for big business to act as quickly to satisfy new demand.


Once the necessary permit have been acquired, small business start up face problem of hiring workers. Although labour regulation are ongoing cost, that they constitute a significant barrier to entry to small business because they strongly affect the ex-ante calculation regarching business profitable. If labour regulation are overly onerous the will discourage new business start up. Small business owners are comfortable with a maze of labour regulations.


  • A small business is low in capital but high in labour intensity. Most small business does not have sufficient financial resources .so they cannot purchase big machines or modern equipment. What is only possible for them to do is to use labour instead of machine in their business operation. These are usually in retaining and service industries.
  • A small business is efficient in specialized skill or service. It can well produce goods or service that is designed to the particular needs of an individual or a few clients. For instance, repairs works on cars and appliances require individualized services that require specialized knowledge for specific needs.
  • A small business succeeds in small, isolated or over looked market. In rural communities where market is small dues to the few residents, a small business is viable for example; drug stores, tailoring shops, small restaurants, and grocery stores are profitable. Clearly, giant Corporation cannot survive in small towns where demand is limited.
  • A small business often operates in unstable markets. Big corporations are careful in their investments. To be sure or safe in their business ventures, they conduct market or feasibility studies to determine viability.

This is actually the standard procedure in putting up business which involves huge resources in terms of money, machines and materials. Such feasibility studies do not apply in most small businesses. With little capital there are not afraid to experiment or test the market. They can easily respond to changing economic conditions. If these are not favorable, they can quickly get out. Unlike big corporations, they have big buildings or large factories. It is not easy for them to retreat from business without suffering from huge losses.

  • Generally, the owners of small business are also the managers. Most of our small enterprises in Nigeria are like these. The owner –manager employs his wife and children. If the business grows, the owner hires more employees, usually relatives and town mates.
  • Capital comes from the owner or small group. In our country, a small business is usually financed by the family through its own savings and/or loans. If ever the business is funded by a small group, it comes from relatives and close friends.
  • The area of operations is small. This means the business is community based. The owner and the employees live in the community where the enterprise is located.
  • The size of the enterprise is small in relation to the industry. For the example the shoe industry is a large one. But there are very many stores of shoes. Clearly, one shoe store cannot dominate the market for shoes. In the case of big businesses, there are only few enterprises like the bear industry, car manufacture, etc.


  • Personalized relationships with customers and employees. Retailers and shop owners deals with their customer on personalized service .The owners know many of their customers by name. The small business owners are involved in social, cultural and political affairs in the community. Such personalized services or relationship with customer are big economic advantages which big corporations do not have. There is also a close relationship between owners and employees. Because of this good and information relationship efficient employees give their loyalty to their employers.
  • Flexibility in management: The owner being the boss and the manager, he can easily introduce change in his products or services, experiment on price strategies, or change store hours to fit market conditions. Furthermore small business owners are quick to learn change in the needs and interest of their customers, and also the activities of their competitors. So, they can immediately respond to such situations.
  • Government Incentives: The national government has been promoting the organization of small enterprises. It extends both financial and technical assistance, particularly production and marketing, to small entrepreneurs. Such programme of the government is relevant to the nature of our economy. The masses have to be helped in helping themselves. A micro business is possible for them through government guidance and assistance.
  • Simple record keeping small enterprises require few and simple sets of records. They may consist only of a cash receipt journal which records all sales, and a cash disbursement journal which records all the expenses or payment.
  • Independence: small business owners are the means of their own destinies. They are not employees. They make their own decisions. They do not apply for vacation or sick leaves. They do not worry being late, absent or laid off to many individuals, this is the kind of life they enjoy.


As a business owner, it is easy to become discouraged when a large competitor with deep pockets enters your market. However you do have competitive advantages over large companies, especially in your home town. If you focus on leveraging these advantages, you will improve your odds of competing for and winning your customer’s hearts in ways those large companies can never rival.


Business is an organized effort of individuals for the production of goods and services in order to make profit. To organized a business, the entrepreneur must combine four resources; human, financial, material, and information. Small business serves market which big does not like to serve or cannot serve effectively; and the responsibility of risk or rewards belongs to the owner of small business while in big business such responsibility is assumed by employee- managers. However in case of losses, the managers risk only their employment.


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