There was a period during the late '90s when many business marketing experts decried the death of the small local business, predicting that due to the popularity of the internet, local businesses that did not ship product or provide services long distance would simply become obsolete. This has not been the case - in fact, as the internet has grown, local small businesses have found ways to profit from having a local presence. Small businesses that serve a local market have some incredible strengths that national chains simply cannot compete with, online or off.

I have often heard the complaint that companies like Wal-Mart "drive small businesses out of town". This is absolutely NOT true. The small businesses drive themselves out, by failing to build on their strengths and to provide something that Wal-Mart cannot provide. The real problem with the strengths of small local businesses is that many business owners fail to realize what those strengths ARE, and they try to compete in ways that fail every time.

When you have a national online business, you are competing with millions for a tiny share of the big pie. When you have a small local business, you are competing with a much smaller market, for a larger share of the smaller pie. The potentials are just as great, perhaps greater, for a well managed local business.

They tend to try to compete in three ways, which always fail:

1. Price. Customer loyalty is never about price. Competition on price alone always fails, because someone else can always offer a lower price, and it drives your profit down so that you either cannot survive, or barely survive. Your prices should be COMPETITIVE, but they should be based on VALUE, not on some unrealistic goal to have the lowest price.

2. Variety of stock. This, again, is something small businesses simply cannot compete with big business on. Doesn't work. Wal-Mart specializes in carrying a wide variety of bestsellers. If you try to compete with Wal-Mart by carrying the same variety they carry, they'll outdo you every time. If you specialize in carrying what they DO NOT carry, and only those things that sell well for you, you can have a thriving business with more than enough revenue to keep you fat and happy.

3. Advertising dollars. Often a small business owner thinks that in order to compete with the big guys they have to have advertising money to spend. Not true. There are so many ways to market that do not require a large budget, and they are ways that the larger companies DO NOT DO WELL. Never compete with a large business on THEIR terms. Always compete in a way that is to YOUR advantage.

So, where IS the strength of small local business? What do you do to take advantage of the strengths and build your business successfully?

1. Create unique VALUE. Price and value are two different things. I can order a tool online for less than I can purchase it at the local hardware store. But I can't ask questions about it, I have to pay shipping, and I can't get it NOW. All of these things add VALUE to my purchase for me. Other things may add value as well - perhaps the tool online is made in China, and the one in town is made in America. Perhaps the tool in town comes with a better warranty. Maybe the tool in town has some other value point, particular to that store, which the one online does not have. Think about what you customers WANT, and NEED, and find ways to give them solid value for the price. Creating value that is NOT automated or standardized, but which is specific to the needs of your particular customers, is one way in which small businesses can outshine large ones every time.

2. Specialize in a NICHE. Find out who is NOT being served well in your town. Don't do what everyone else is doing! Do it differently! Sell things they AREN'T selling, but which the local people WANT. Too often, people are either selling the same things, or selling things nobody really wants badly enough to go to a separate store for them. Find the things people want badly enough to go out of their way for. Those are the things that will survive no matter how many Wal-Marts come in.

3. Make your marketing PERSONAL. The most effective marketing methods for small local businesses are very personal. Corporate does not do personal well at all. Personal marketing methods are far more effective than ad blasts anyway. They take hands-on work, and the repetition of hands-on work, but they are powerful and effective. Be helpful and kind, and carry business cards with you everywhere. Get out and network, print up sale or event flyers to scatter around, and go shake hands and smile at people. Set up a booth at trade fairs and have samples, business cards, and product to sell. Offer presentations through the Chamber, local groups that are interested in what you sell, or offer classes through a local college enrichment program.

4. Be there all the time. Ok, so you can't do that. But YOU and a WEBSITE can do that. A website can help a local business that is on a growth track, simply by being there when you cannot, with a good description of what you offer, pictures of your product or service, and contact information, business hours posted, etc. This kind of 24-7 presence can really help local businesses that have short or unpredictable hours, but it can also help those that have more standard hours. I do recommend that you stay open in the evening at least one day per week - if you are only open 9-5:00, you will shut out everyone who works during those hours, and they'll go to the big box stores instead - they won't get what they REALLY want, but you will leave them with no choice. More people go to the internet to search for local business now than those who use the Yellow Pages. So make sure when they search for your products in your town, that they can find YOU.

Local businesses have unique strengths, in presence and in personality, that long distance businesses and big box stores can rarely compete with. Take those strengths and build on them, instead of beating yourself with the limitations, and you'll open unlimited potential.