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Big Businesses Are Scaling Using SMB Strategies. Here’s How.

March 23, 2022

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There have been some very big break-ups happening over the past few months — and we’re not talking about celebrities.

In recent months, more than a few brand name companies have announced decisions to split into two or more smaller companies. Last year, tech conglomerate Dell Technologies spun off its cloud business VMWare to create two different companies.

In November, healthcare giant Johnson & Johnson decided to separate its consumer division from its pharmaceutical business. And more recently, U.S. auto industry leader Ford shared its plans to split up its auto business into two units: one for its gas and diesel-powered cars and another for its new electric models (and this is after they’d already spun off a unit for their commercial customers).

While it may seem backward to break up large conglomerates into smaller companies to scale, these big name brands are taking their strategies straight out of the SMB playbook — they realized that it was easier to grow when you start small.

But why is the small business mentality better for scaling your company? Check this out:

A single focus

When it comes to small business, you’re generally focused on selling one service or type of product. That way, you don’t have to divide your time trying to develop, market, and sell multiple goods — your sole focus is concentrated on scaling your specific product or service.

And big companies feel the same way. Let’s talk Ford: their decision to operate their auto business as two separate units allows them to separate their focus. Ford Blue, the unit in charge of the gas and diesel-powered vehicles that built their enterprise, will be the “profit and cash engine” while Ford Model E, the growing electric vehicle unit, “will nurture the talent and the culture and the intensity of a high-tech startup.”

Meaning, breaking up and downsizing allows big companies to focus on a single idea and generate growth through that one avenue. Just like in a small business, where leaders can focus on scaling one service or type of product at a time.

Responsiveness and flexibility

It’s all about the pivot. In other words, the ease with which smaller businesses can switch focus on what products and services work best for them.

There are many different factors that can affect why a business would need to adjust their focus. Industry trends are always changing. What’s popular today might not be popular next month, and staying on top of those changes could spell the difference between success and failure.

And, with overarching problems like labor shortages and supply chain issues affecting businesses all around the world, remaining flexible is important to maintain the products and services that customers expect.

Or maybe, there’s a need in the industry that hasn’t been filled or has a low amount of competition. What we’re trying to say is, there are a lot of reasons to pivot the direction of your business. And making that change is much easier when you’re a smaller business.

The bigger your business, the more red tape you typically have to wade through to make big changes. It’s harder to make changes quickly when you have hundreds of employees and tons of resources focused on other goals.

So, divide and conquer. Companies want to get smaller to be more flexible — they want to take advantage of industry trends and adapt to the market more effectively.

Grow as a small business

Being a small business has its perks when it comes to growth. We’re not all trying to become billion-dollar companies, but we do want to reach a size that works for us.

So, stay focused on your target audience. By perfecting the product or service that you provide, you’ll generate interest from more consumers. And if you find a niche that works for you, make that pivot. By opening yourself to flexibility in response to what’s popular in your industry, you are giving yourself a prime opportunity for growth.

Just as big companies are splitting up to model themselves off small businesses, take a page out of their playbook. Find the focus that generates your growth.

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Article

Big Businesses Are Scaling Using SMB Strategies. Here’s How.

March 23, 2022

Jump to a section
Share it!
Sign up for our newsletter
You're all signed up! Look out for the next edition of The Manual Weekly coming Wednesday am!
Oops! Something went wrong while submitting the form.

There have been some very big break-ups happening over the past few months — and we’re not talking about celebrities.

In recent months, more than a few brand name companies have announced decisions to split into two or more smaller companies. Last year, tech conglomerate Dell Technologies spun off its cloud business VMWare to create two different companies.

In November, healthcare giant Johnson & Johnson decided to separate its consumer division from its pharmaceutical business. And more recently, U.S. auto industry leader Ford shared its plans to split up its auto business into two units: one for its gas and diesel-powered cars and another for its new electric models (and this is after they’d already spun off a unit for their commercial customers).

While it may seem backward to break up large conglomerates into smaller companies to scale, these big name brands are taking their strategies straight out of the SMB playbook — they realized that it was easier to grow when you start small.

But why is the small business mentality better for scaling your company? Check this out:

A single focus

When it comes to small business, you’re generally focused on selling one service or type of product. That way, you don’t have to divide your time trying to develop, market, and sell multiple goods — your sole focus is concentrated on scaling your specific product or service.

And big companies feel the same way. Let’s talk Ford: their decision to operate their auto business as two separate units allows them to separate their focus. Ford Blue, the unit in charge of the gas and diesel-powered vehicles that built their enterprise, will be the “profit and cash engine” while Ford Model E, the growing electric vehicle unit, “will nurture the talent and the culture and the intensity of a high-tech startup.”

Meaning, breaking up and downsizing allows big companies to focus on a single idea and generate growth through that one avenue. Just like in a small business, where leaders can focus on scaling one service or type of product at a time.

Responsiveness and flexibility

It’s all about the pivot. In other words, the ease with which smaller businesses can switch focus on what products and services work best for them.

There are many different factors that can affect why a business would need to adjust their focus. Industry trends are always changing. What’s popular today might not be popular next month, and staying on top of those changes could spell the difference between success and failure.

And, with overarching problems like labor shortages and supply chain issues affecting businesses all around the world, remaining flexible is important to maintain the products and services that customers expect.

Or maybe, there’s a need in the industry that hasn’t been filled or has a low amount of competition. What we’re trying to say is, there are a lot of reasons to pivot the direction of your business. And making that change is much easier when you’re a smaller business.

The bigger your business, the more red tape you typically have to wade through to make big changes. It’s harder to make changes quickly when you have hundreds of employees and tons of resources focused on other goals.

So, divide and conquer. Companies want to get smaller to be more flexible — they want to take advantage of industry trends and adapt to the market more effectively.

Grow as a small business

Being a small business has its perks when it comes to growth. We’re not all trying to become billion-dollar companies, but we do want to reach a size that works for us.

So, stay focused on your target audience. By perfecting the product or service that you provide, you’ll generate interest from more consumers. And if you find a niche that works for you, make that pivot. By opening yourself to flexibility in response to what’s popular in your industry, you are giving yourself a prime opportunity for growth.

Just as big companies are splitting up to model themselves off small businesses, take a page out of their playbook. Find the focus that generates your growth.

Article

Big Businesses Are Scaling Using SMB Strategies. Here’s How.

March 23, 2022

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