The 7 Disadvantages Local Businesses Face Online (and How to Beat Them) As the owner of a local business, you have to face several disadvantages. But that doesn't mean you can't succeed.
By Larry Alton Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Small and local businesses have flourished for centuries, and remain competitive even in today's complex and multifaceted market. Now that businesses have the capacity to sell and promote themselves online, it's even harder for small business owners to compete with major, established, national and international organizations.
Related: How You, the Local Business Owner, Can Take on Amazon
But before you get too intimidated, take a step back and look at the situation. Even though small businesses do have some significant disadvantages in the world of online marketing, those disadvantages aren't deal breakers. If you know what they are and how to overcome them, you can best even your fiercest competitors. Here are the disadvantages and how to recognize and prepare for them.
1. Access to fewer resources
One of the most obvious disadvantages is the relative lack of resources that small businesses face. Big businesses have long established themselves and usually work with less debt (not to mention upwards of millions of dollars in revenue). Small businesses, on the other hand, have limited income and limited budgets to spend on marketing efforts.
However, just because a competitor's marketing campaign is bigger or more expensive doesn't mean it's inherently more effective. With your limited resources, you just have to be smarter about where and how you spend your money, focusing on campaigns that stand to give you the highest possible return.
2. Shorter history
Every big business starts out as a small business, and usually a local one; so don't let your lack of history prevent you from creating a new history. Because smaller businesses lack much of a reputation or many testimonials, they have less of a foundation to work with when they first start marketing.
The solution is to focus on other areas where you do have strength; for example, is your product strictly better than a competitor's? Are you more conveniently located for your customers? You can also use services like Angie's List to earn glowing reviews and make up for that history early on.
Related: Social Media Marketing Tips for Local Businesses
3. Lockout from major publications
Guest posting is one of the most valuable online marketing strategies there is -- in fact, according to writer Jeff Goins, "Guest posting on other sites is five times as valuable as creating new content on your own site." However, the power of your work is directly related to the prominence of your chosen publisher, and it's hard for small businesses to get featured in national publications.
The solution is to work with smaller and local publishers first, building a reputation from the ground up before going after the heavy-hitters.
4. Reliance on individual relationships
When you first start out, your team will be small, and you'll rely on individual relationships (such as the personality of your CEO and leadership team) to drive initial business partnerships and sales. Instead of seeing this as a disadvantage, use it to your benefit; develop the personal brands within your team, and grow your core brand from there.
5. Limited expertise
Because you won't be able to hire or afford top marketing experts to work on behalf of your brand, you'll have a limited pool of talent and creativity to draw upon for the creation of your campaigns.
Instead, try to learn as much as you can to improve yourself, and hire freelancers and independent contractors to help you direct and execute the work cost-efficiently.
6. Ties to a physical location
Because your business is likely tied to a physical location, you won't be able to market your business nationally -- at least not as efficiently as major, nationwide businesses. However, there are some distinct advantages to local marketing online. For example, you can work on your local SEO campaign to increase your business' visibility in the "local 3-pack," the top three locally relevant results that appear in the context of any local search query.
7. Reliance on a local population to build momentum.
When your business starts out, your initial audience will be almost exclusively composed of local audience members. That isn't necessarily a bad thing, but it can prove to be an obstacle if your eventual goal is to expand to a national level.
As with many of the obstacles on this list, the solution is to expand yourself gradually, building your local audience as much as possible before expanding your circles into new demographic territories.
Related Book: Ultimate Guide to Local Business Marketing by Perry Marshall and Talor Zamir
Adjusting your perspective
When you think about your small business competing with major players, don't think of yourself as engaged in battle with a bigger, stronger enemy. Instead, picture yourself mutually gathering resources from a common field. To succeed, you don't have to be bigger, faster or better than your competition. You just have to harvest in a different way. With that perspective, you'll be able to plan better strategies, work more efficiently, and ultimately survive, despite the opposition.
