The majority of small businesses remain small because they don’t know how to grow bigger, lack ideas on what to do, and are stuck gasping for breath. However, a small universe of small businesses intentionally chooses to stay small even though they have all it takes to grow bigger.

Bo Burlingham wrote about those businesses that intentionally choose to stay small in his “Small Giants: Companies That Choose to Be Great Instead of Big.” Seth Godin extolled the greatness of the excellent small businesses that choose to stay small in his “Small Is The New Big.” This post is for those great businesses that choose to remain small and would be entrepreneurs that may want to follow in their foot-steps.

Before you proceed, please read these four blog posts as they’ll give you broader perspectives on business success as you focus on making your small business a success.

The Ultimate Guide To Setting Goals And Achieving Your Dreams

The Ultimate Guide to Entrepreneurship, Wealth and Power

The Ultimate Guide To Making More Money Online Than You Can Use In A Lifetime – And Be Happy With The World

The Ultimate Guide To Building A Perpetual Online Money-Making Machine And Being Humble About It

The Definition of Small Business

Small businesses are generally categorized as Small and Medium Enterprises (SMEs) and their definition vary from country to country. There are also micro enterprises and solopreneurs, the majority of which are not businesses at all by the true definition of business but I include them here as sometimes they provide the owners the sole means of livelihood.

The major criteria used in categorizing small businesses are the number of employees and annual revenue.

UNDP on its website, undo.org, states that “SMEs can be considered as having, say, between five to two hundred employees and are found in the formal sector (i.e., they are formally registered as a business organization).”

According to UNDP, small and medium enterprises (SMEs) and micro-enterprises constitute over 95 per cent of all enterprises and account for two thirds to one half of total non-farm employment and gross domestic product (GDP) worldwide.

In a paper he presented at the Financial System Strategy 2020 International Conference entitled SME: Issues, Challenges and Prospects, Prof. Banji Oyelaran-Oyeyinka (Director Monitoring & Research Division (UN-HABITAT), and a Visiting Professor at NOUN (National Open University of Nigeria) provided the following definition and statistics about SMEs in Nigeria:

• SMEs are broadly defined as businesses with turnover of less than N100 million per annum and/ or less than 300 employees.
• Studies by the IFC show that approximately 96% of Nigerian businesses are SMEs compared to 53% in the US and 65% in Europe.
• SMEs represent about 90% of the manufacturing/ industrial sector in terms of number of enterprises.
• They contribute approximately 1% of GDP compared to 40% in Asian countries and 50% in the US and Europe.

According to SMEDAN (Small and Medium Enterprises Development Agency of Nigeria), the National Policy on MSME (Micro, Small and Medium Enterprises) categorizes MSMEs as follows:

According to PwC in their 2017 SME Survey, SMEs in Nigeria contribute 48% of national GDP, account for 96% of businesses and 84% of employment. In South Africa, SMEs account for 91% of businesses, 60% of employment and contribute 52% of total GDP according to the same PwC report.

According to fundera.com, the Small Business Administration (SBA) in the US defines small business as one employing 250 to 1,500 employees  or achieving $750,000 to $38.5 million in average annual receipts depending on the industry. Here is the SBA’s full criteria according to webopodia.com:

• Manufacturing: Maximum number of employees may range from 500 to 1500
• Wholesaling: Maximum number of employees may range from 100 to 500
• Services: Annual receipts may not exceed $2.5 to $21.5 million
• Retailing: Annual receipts may not exceed $5.0 to $21.0 million
• General and Heavy Construction: Annual receipts may not exceed $13.5 to $17 million
• Special Trade Construction: Annual receipts may not exceed $7 million
• Agriculture: Annual receipts may not exceed $0.5 to $9.0 million

Georgia McIntyre writes in fundera.com that, “With 28 million small businesses making up 99.7% of all U.S. firms, small business is big for the United States’ economy.” And according to toppr.com, about 97% all businesses in India are small business.

Success Strategies For SME

Keap.com lists the following four characteristics of a successful business:

• Clarity
• Planning
• Focus
• Connection

Rhonda Abrams, a business owner and an expert in small business, shared her “Rhonda’s Rules” in a USA Today article by the title “Strategies: 10 rules for small business success.” Here are “Rhonda’s 10 Rules”:

• Go small to grow big.
• Take care of your bread-and-butter business.
• “Make sure the dog will eat the dog food.”
• You can’t reach a goal you haven’t set.
• Clearly define your target market.
• Build one business at a time.
• It’s easier to get a piece of an existing market than to create a new one.
• Things take longer and cost more than planned.
• People don’t read.
• People do business with other people.

You can get more details on Rhonda’s 10 Rules here.

Similarly, Rhonda in another article in USA Today under the title, “Strategies: 16 small business resolutions for 2016” has the following tips (one has been removed because it no longer applies):

1. Make a decision to grow
2. Figure out what makes you money
3. Focus on recurring revenue
4. Send out invoices
5. Find a niche
6. Bother people; get rejected
7. Get found free
8. Turn off social media
9. Manage your money
10. Develop a business plan
11. Move to the cloud
12. Get help
13. Start a reserve account
14. Attend or exhibit at a trade show
15. Shop local, shop small

You can get all the details here.

Writing under the title “5 Successful Strategies to Lead Your Small Business Effectively”, textrequest.com recommends:

• Hire a small but efficient team.
• Actively learn from your competitors.
• Spend your time and money on “evergreen” resources.
• Target your ideal customers, and only your ideal customers.
• Use low cost but effective marketing strategies.

In summarizing, keap.com provides the following “The 6-part business strategy for small businesses.”

1. Passion
2. Invest time away from your business
3. Hire and fire guided by your purpose, values, and mission
4. Invest in your marketing
5. Boost your email marketing
6. Focus on current customers

If you want get more details please click here. 

Small Business Marketing

Melinda Emerson, a renowned small business coach and strategist, writing in the Huffington Post under the heading, “Strategies for successful small business marketing” recommends the following tactics:

• Profile Your Best Customers.
• Talk With Your Clients.
• Watch Your Competition.
• Update Your Marketing Plan.
• Focus on 30-Day Sales Goals.
• Create Win-Win Relationships.
• Build Strategic Alliances.
• Refine Your Elevator Pitch.

Please get all the details here.

Finally, keap.com, which is a blog dedicated to small businesses, provides the following marketing tips, in “How to market your business with no money”:

• Satisfy your customers.
• Connect with people (Online & Offline).
• Be friendly and approachable.
• Acquire and share knowledge (Educate yourself & Educate others).
• Offer valuable content (Producing & Sharing).

My book, “Bridges to the customer’s Heart”, dubbed The Customer Service Bible, is all about customer-centricity, a discipline Sam Walton started practicing in 1950 after he bought his first store at  Bentonville, Arkansas. Any wonder that, that same store grew to become Wal-Mart and the largest store chain in the world? Any wonder Sam Walton became the richest man in America by 1982?

Focus on the customer is the secret to success in business. The customer may not always know what he or she needs but he or she is never in doubt about what he or she wants. It’s your duty as a business owner to help the customer uncover his or her real needs and give it to him or her, with a lot of extras on top.

Before we review the problems SMEs face, you can get Bridges to the Customer’s Heart here, or download the free PDF here. You can get my article on TQM (Total Quality Management) here, and customer intimacy here. They are all choked full with great ideas. 

Problems SMEs Face

So much has been written on the problems or challenges small businesses face that the catalogue of woes sounds as a broken record. Key amongst those problems is lack of capital. The quote cited here by PwC summarizes the challenges SME face in Africa.

PwC in its SME Survey wrote, “According to an article on ‘Developing Africa through effective, socially responsible investing’, there still exists a ‘missing middle’, which finds it hard to access funds due to the category of funding they belong to.” Other challenges encountered by the sector include:

• Lack of skilled manpower
• Multiplicity of taxes
• High cost of doing business, among others.

While capital is easily available through “crowd-funding” in other parts of the world, that’s not the case in most of sub-Saharan Africa. Even then, though access to start-up capital is a huge challenge, it’s not the most critical overall according to super successful entrepreneurs.

In a country like Nigeria, basic utility like electricity is the biggest headache facing SMEs. Lack of electricity makes virtually all manufactured goods and services uncompetitive relative to imported and smuggled goods.

In most of Africa, the entrepreneurial culture is lacking as subsistence farming predominates. At the heart of Africa’s problem is ingrained corruption that permeates the entire fabric of society, cronyism politics and government and the copy-cat education system that emphasizes paper certificate.

Despite the much talk about double-digit growth rate in some countries like Ethiopia, Rwanda, Kenya, it must be noted that all the “shining stars” have very low starting bases. And unlike China, the “growth” is in cluster industries that cannot but grow, chief among them ICT. A rising river carries all boats.

Unlike China, South Korea, and Malaysia, most countries in Africa lack a coherent vision for growth. In all of Africa, the richest people and families are politicians, and all others, like Dangote, are exceptions. Please check Appendix 1 (see the end) to see for yourself the so-called double digit growth rates. A few flashes in the pan were not enough to lift Africa out of misery.

Outlook For SMEs

The company oxfordeconomics.com summarized a global study based on a survey commissioned by American Express of 3,200 SMEs in 15 countries in 2017. The study provides a comprehensive view of SME sentiment at a time of heightened uncertainty, especially the US – China trade dispute, Brexit and others. The result revealed the following:

• Though SMEs are concerned about the threat of political and economic uncertainty, their business outlook is generally optimistic.
• Many view technology as a positive force for disruption, presenting new opportunities.
• SMEs thrive by exploiting key advantages, described as their Four Aces:

1. Applying technology
2. Agility
3. Accelerated innovation
4. Attracting talent

• Many SMEs are developing growth strategies by focusing their expertise in niche markets, driving sales growth at home and abroad.
• Finance remains a key challenge for SMEs – and a significant opportunity exists for financial providers to assist growing SMEs.
• Governments, policy-makers and other agencies can help create conditions that help SMEs prosper.
• To be effective, however, governments need to understand that different kinds of SMEs have different needs.

So far we have looked at the traditional ways of defining, describing, and generally viewing SMEs. We see SMEs as needing special enabling environment, government support in the form of subsidies, modern inputs, and so on. If that were really the case, why has agriculture in Africa remained subsistent for millennia despite the billions sunk into it especially in a country like Nigeria?

Why has Africa been absent on the league table of patent filing all over the world, the number one predictor of innovation and creativity? Get the full picture here. In 2020 China overtook the US for the most patent filed, thanks to Huawei, the Chinese company at the forefront of 5G technology.

Entrepreneurship which is the bedrock of business, small or big, is a culture and unless the society as a whole imbibes that culture, it’s doomed.  Most of Africa depends on food imports to feed their ballooning population; Africa depends on dole outs from IMF, IFC, World Bank, Japan, European Union, and in recent times, China. This is a story for another day.  Let’s get back to small business success. 

Why May a Company Choose to Stay Small

Among tech giants, Apple is by far the smallest in terms of size. It’s clearly dwarfed by giants such as Microsoft, Amazon, and Samsung. But this is how they rank in terms of market capitalization as at January 2020:

• Microsoft –              $1.35 Trillion
• Apple –              $1.30 Trillion
• Amazon –              $1.00 Trillion
• Samsung –              $0.34 Trillion

Apple has a few lines of products you can count on your finger tips. From day one, Apple purposely chose to remain small because it wants to make products that are “insanely great.” Apple’s raison d’être is to “put a dent in the universe.”

This is how Bo Burlingham, the author of Small Giants, describes why some companies chose to stay and remain small. He zeros in on how these maverick companies have passed up the growth treadmill, and focused on greatness instead: “It’s an axiom of business that great companies grow their revenues and profits year after year. Yet quietly, under the radar, a small number of companies have rejected the pressure of endless growth to focus on more satisfying business goals. Goals like being great at what they do, creating a great place to work, providing great customer service, making great contributions to their communities, and finding great ways to lead their lives.”

“Small Giants” singled out 14 companies, amongst them:

• Anchor Brewing,
• CitiStorage Inc.,
• Clif Bar & Co.
• Righteous Babe Records,
• Union Square Hospitality Group,
• Zingerman’s Deli of Ann Arbor.

Four of such companies in Nigeria to watch are Ruff & Tumble, Loshes Chocolates,  Little Weavers, and The Place.

As Seth Godin, the business philosopher, says, “In the new world of business, you either have to be cheaper or different. Otherwise, you’ll sink.” And with reference to marketing, Seth Godin in his “Purple Cow” stated, “The first key to successful marketing is to produce something remarkable and let it grow.”

The idea of being remarkable applies as much to businesses as to individuals, be they artists, craftsmen, and solopreneurs. A book reviewer on Amazon, Steve Piacente, commented, “Once an artist puts some work up for sale, he or she, like it or not, becomes a small business owner.”

In his The War of Art, Steven Pressfield, presses the point.  The idea is on what Pressfield calls “Resistance.” This is how Derek Sivers sums it up, “Have you experienced a vision of the person you might become, the work you could accomplish, the realized being you were meant to be? Are you a writer who doesn’t write, a painter who doesn’t paint, an entrepreneur who never starts a venture? Then you know what “Resistance” is.” Read Derek’s full summary here.

Great entrepreneurs build great companies that are remarkable not minding the odds. Tony Hsieh shares the story of his adventure at Zappos in a book of the same name. Tony was not selling anything sexy but ordinary shoes. But together with the founder, Nick Swinmurn, and a band of mavericks, he turned shoe selling into an art form and before long Zappos came under Amazon’s radar. Long story short, Amazon swooped in and snapped up Zappos at a record breaking price of almost $1 billion. Remember, Jeff Bezos wants to build the world’s most customer-centric company and therefore saw Zappos as a great fit. Read about Zappos and Delivering Happiness here.

Derek Sivers wanted outlets to sell his music CDs. Shops in his neighborhood would not stock his CDs. Derek took matters into his own hands and created the website CD Baby, where he could sell his songs. Before long CD Baby had turned into a phenomenon.

This is a confirmation note that customers receive when buying a CD from CD Baby as shared by Seth Godin. Your CDs have been gently taken from our CD Baby shelves with sterilized contamination-free gloves and placed onto a satin pillow. A team of 50 employees inspected your CDs and polished them to make sure they were in the best possible condition before mailing. Our packing specialist from Japan lit a candle and a hush fell over the crowd as he put your CDs into the finest gold-lined box that money can buy. We all had a wonderful celebration afterwards and the whole party marched down the street to the post office where the entire town of Portland waved Bon Voyage to your package, on its way to you, in our private CD Baby jet on this day, Tuesday, June 18th. I hope you had a wonderful time shopping at CD Baby. We sure did. Your picture is on our wall as Customer of the Year. We’re all exhausted but can’t wait for you to come back to CD-BABY.com!

How would you feel if you received such a confirmation note from CD Baby? You’d be elated.  As Maya Angelou remarked, “People will forget how you treated them. People will forget what you said to them. But people will never forget how you made them feel.” That’s the longest and the shortest crash course on customer service. Start practicing it starting tomorrow.

Building a remarkable company is about making customers feel great about themselves in every interaction with you. It didn’t take long before Audio and Video Lab, Inc. noticed CD Baby and Derek Sivers walked away with a tidy sum of $22 million. As the uber guru Tom Peters keep ranting, “Re-imagine.” Seth Godin, author of Purple Cow and over 20 other books, also keeps ranting, “Always look to re-imagine your product or service. Why make a better CD player when you could invent the iPod?” As one of Nigeria’s most visionary business moguls, Dr. Ernest Azudialu Obiejesi, shared on  Experience Annex, what matters in business is “vision” and not “capital.” Listen to Dr. Obiejesi here.

How to Stay Focused to Conquer the World

One of the most difficult decisions in business is how to operate within your values. Should you ride the arc of ambition when your idea, company, and industry takes off or should you stick to the knitting? Staying small is a choice, not because you can’t grow, but because you made a conscious choice to stay small. Steve Jobs made a conscious choice to keep Apple small unlike Bill Gates who wanted to go for size. And both won handsomely. When Apple’s board under John Sculley deviated from Jobs’ values, of making insanely great products, and leaving a dent in the in universe, Jobs resigned. Contrary to popular misconception, according to Steve Wozniak, Apple’s co-founder, Steve Jobs was not sacked, he resigned.

Brian Pitman, the late Chairman and CEO of the then Lloyds Bank once said: ‘’It is a myth that biggest is best. It is much more difficult to be the best than it is to be the biggest.” The best according to Pitman is the “strongest, and most profitable, and with the highest reputation for serving customers and having the highest quality staff.’’ Staying focused on your values, offering the highest quality products and services, impacting mankind positively are the hallmarks of the excellent small companies.

These are some of the small companies we view with unending admiration, awe, and passion. You may not agree, but these category killers are my definition of small businesses success, though they are multibillion dollar companies:

• Apple
• Rolls Royce
• Harley Davidson
• South West Airlines

As an SME owner, you may not achieve the above companies’ height of entrepreneurial success but you can still be admitted into the hall of fame if you tow the lines of these small giants:

• Ruff ‘n’ Tumble
• Loshes Chocolate
• The Place
• Little Weavers
• Zingerman’s

By Susan Adams’ account, South Africa’s first black billionaire, Patrice Motsepe, and British diamond jewelry mogul, Laurence Graff, both built their vast fortunes from nothing. Susan has been part of Forbes entrepreneurship team and now writes for Forbes education. Susan Asks, “When is bigger not better?” She answers her own question, “When you value greatness over fast growth.”

Writing under the title, “Forbes Small Giants: The Best Small Companies Of 2019” at forbes.com, Susan shared the heart-lifting stories of 25 amazing companies, all privately owned and closely held, how they compete, what they do to enter the history books, and why you should be inspired by them. This is in one sentence what Susan shared about these “Small Giants”, whose revenue ranged from $2.65 million to $100 million, “they share a commitment to being the best at what they do, providing stellar service to customers, offering employees fulfilling, rewarding work and being vital members of their communities.”

The companies are spread in a wide range of industries, including a website for “how-to advice”, manufacturing, newspapers, food, and gaming amongst others. A rising tide, they say, raises all boats, but not great companies. Great companies are anchored by their values not rising tide. This is a cross section of the things they do differently according to Bo Burlingham, the author of “Small Giants”, who co-authored the Forbes article:

• ADVOCO: A “promise to be courageous, driven, innovative, honest, confident and knowledgeable.”

• ARKADIUM: “Our employees are not cogs in a wheel.”

• CHIEF OUTSIDERS: “We have decided to stay focused on what we know best and where we think we can offer the highest value.”

• CHOICE ENGINEERING: “We could go backward and be a $5 million company and still be successful, as long as we were true to our purpose, vision and mission.”

• COMMUNITY IMPACT NEWSPAPER: “Print Ain’t Dead.”

• EVERGREEN: “We want to reap the benefits of being in business long-term, and not take short-term profit.”

• FBS DATA SYSTEMS: “We’ve grown much faster and better than if the employees hadn’t been invested.”

• FILTRINE MANUFACTURING: “Maybe we’re foolish in that respect, but my family and I have never been willing to sacrifice quality to go after business.”

• GREAT LAKES BREWING COMPANY: “Everyone’s a winner. So get in line to pick up your prize.” “What a moment it was,” then-CEO Bill Boor said. “There were hugs and tears and high fives.”

• HARVEST GROUP: “I hear from people, ‘My life is different, the benefits, the ­opportunities for my family.’ ”

• HENDERSON: Values-Driven: Integrity, truth, transparency. “We’re changing the definition of what is a great service provider’s customer relationship.”

• INSPIRA MARKETING: “If we can make people happy and passionate about work, that will translate into the product.”

• INTERWORKS: “I want to be surrounded by people I can think of as friends.”

• LIFE’S ABUNDANCE: “We manufacture in small batches and guarantee freshness and quality.”

• OUTDOOR PRIDE: “We really like to use Outdoor Pride as a vehicle to motivate others to give back.” “At the end of the day, we’re stewards of the Earth.”

• PFSBRANDS: Requires the senior leadership team to read at least 12 books a year.

• RESCUE AGENCY: “The people who see our ads see themselves in them.”

• SOLUGENIX: “We realized their company had a really dog-eat-dog and sales-at-all-costs type of culture, so we had to pull the plug.”

• SPIKEBALL: “We don’t have to ask anybody to promote Spikeball.” “They just do it on their own.”

• THE INDIGO ROAD: “I wanted my management team to drill down on how to better identify people.” “We spend every night taking care of customers.” “We are just now figuring out how to take care of each other.”

• WALDRON PRIVATE WEALTH: “As an independent company, we only have to serve our clients.”

• WEBIT SERVICES: “It has changed the culture and produced a much more engaged team.”

• WIKIHOW: Building the world’s best and largest how-to website.

If you want to read more about these amazing “Small Giants” who stick to their values please go here.

To run a small business that inspires the world, you don’t need special skills, special education or extraordinary IQ, you need ironclad values that centers you. Globalization in the 60s to 80s, and since the 90s the internet, have been both curses and blessings. In a globalized and interconnected world all you need is to be the best in what you do and the world will beat a path to your doorstep. You’ll die if you choose mediocrity and a cheap commodity.

In their “How WE Compete”, Suzanne Berger and The MIT Industrial Performance Centre, summarized their findings of a five-year study of 500 international companies as follows: “When we observed companies whose approaches to competing in the global economy succeeded in keeping good jobs in high-wage countries, we began to wonder what it would take for more companies in advanced industrial societies to follow their lead.” While the study focused on international behemoths like Toyota, GM, Ford, to mention three in the auto industry, its lessons apply across board. What you need is not cheap labour, what you need is good brain that hums creativity, innovation and values.

If you want to get more ideas how “Small Giants” operate, get Forbes’ “Small Giants for 2017” here and Forbes “Best Small Companies for 2018” here.   If you want my top 7 small business ideas that can earn you a feature in Forbes, Fortune, and Inc, provided you have values made of Gold, email me at info@pauluduk.com. However, if you’re not interested in my ideas, Meg Prater has “50 Small Business Ideas for Anyone Who Wants to Run Their Own Business” at hubspot.com. You can down load her ideas here. 

What You Need to Do Right Now

You’ve come a long way. Having read to this point, I believe you’re now sold to the idea that business is not about balance sheet, profit and loss account and cashflow. If you do it well, the profits, and cash and all others will come. When Steve Jobs started, he told his band of rag-tag army, “we’re here to overthrow IBM.” IBM had 100% of the computer market in its pocket. Steve Jobs and Apple had a dream, “to make insanely great products”, and “leave a dent in the universe.” As the saying goes, the rest is history.

What you need to succeed is an idea whose time has come, a compelling vision, and values that money cannot derail. Your values must stand as the Rock of Gibraltar.  Follow these simple steps and you’ll be on your way to small business success beyond your wildest dreams. 

Here are Three Questions to Guide You. Ask Yourself:

• Where is the new BIG win going to be?
• Which traditional industries are over ripe for disruption?
• What do we need to do differently?
  

Download here a simple worksheet to guide you on what to start doing, what to do more of, what to do less of and what to stop doing. Good luck on your journey to small business success and personal glory. 

Appendix 1

At any rate, where is the much touted double growth rate for Africa here?