During my time in business school, a common topic of discussion was around the threat to small businesses posed by multimillion organizations moving into the market. The threats, for example, can be centered around an ability of the larger organizations to offer similar or higher levels of service at equal or lower rates than small businesses, due to economies of scale, indirectly forcing small businesses into taking up and solely focusing on niche segments of any industry. That type of impact can marginalize a small business’ potential for growth and stunt its ability to grow in the long term. On the other hand, every problem brings with it a silver lining; big businesses can in times indirectly aid a small business both on a human resource level, as well as through the transfer of best-in-class knowledge.
A few friends and I own and run Contender Mixed Martial Arts Center in Dubai, a facility dedicated to spreading the sport of MMA among other combat sports in the UAE and the region. Through working in the field, we have many types of customers coming across our center, ranging from those who pick the sport as a hobby, an alternative to gym work, and others who treat it as a current or potential career working day in and day out to improve their abilities and techniques to a competitive level. In turn, as a service provider, Contender MMA must be able to provide the best training environment and coaches to effectively cater to the different types of customers.
The first piece of the puzzle is being able to find the right people to give the training. Unlike regular training regimes, martial arts like Brazilian Jiu Jitsu or Boxing require a coach with vast experience and a keen skill in transferring those techniques to students. This is perhaps the hardest hurdle to cross as a small business in this field. An interesting outcome from big businesses moving to the UAE, like Fitness First, is their ability to import top talents from around the world to come and work in the country. While, at first, this presents competitors with a disadvantage; after a while, like most jobs, people leave their posts in search of an alternative. Having already brought those talents over to the country, the cost of their recruitment for a small business is significantly reduced allowing the salaries and related benefits to be uplifted at the cost (or rather opportunity) of not having to pay for travel and settling expenses. Naturally, that allows smaller businesses to have a number of world class coaches that have top certifications and can be used to make a valuable offering to the business’ audiences.
Another impact that large corporations can have on an industry previously dominated by small businesses is the impact on soft skills. Through bringing world class services that have been tried and tested in mature markets, the standards that are set by the large corporations in a maturing or growing industry can revolutionize the way a small business runs its operations. Ranging from the level of customer service offered, the quality of outward and inward communications, and the values presented to current and potential clients; all factors are automatically upgraded. As a result, natural selection will weed out the businesses that don’t raise their standards and reward those who do. This process creates a better experience and an improved value proposition to the market, with the customer being the biggest beneficiary.
While we can’t fault the arguments against big corporations and the detrimental effect they potentially have on small businesses, a small business owner has the ability to be more flexible than a large corporation and through being flexible, it can find the opportunities within a bad situation that can help it survive and thrive.