Use Innovation to Better Your Small Business

Innovation is no longer classified as a “big company deal.” Trends show that the United States economy relies increasingly on small businesses to innovate. More than half of innovations are purchased by larger companies.

Innovation does not require you to lock yourself in a dark room, break out the lab equipment, and dream up the next big thing to innovate. You must listen and respond to your customer, employee, and business needs.

Small business innovation can occur in a multitude of areas. Innovation will occur if you can think of a better way to do things. Products, technology, organizational operations, marketing, business operations, and supply chain are just some areas to consider.

Innovation is both a creative and problem-solving tool where a need exists. The key to innovation is to think of "incremental progress" rather than "massive change." Here are some ideas on how to stimulate innovation in your small business.

Put yourself in your customers’ shoes. Consider what your customers need, what could make their lives easier, and create a loyal customer for your company. Placing the emphasis on customer needs instead of what you can do for the customer is a subtle shift in focus but an important one. Most companies think about how to service customers using the products and services they offer under their current mode of operation. For a moment, forget what you "do" and think about what a customer might want. Then, adapt what you do to meet those needs.

Improve your internal business processes. Identify one thing you could do better or differently. Improvements can be minor. For example, if you are a mechanic, positive changes could be as simple as re-organizing your tool storage to increase work efficiency and productivity.

Pick one expense item and say, "How could I do without this expense?"  Reviewing expenses may lead you to ways to lean your operational costs. Imagine something you currently do has magically disappeared, and determine how to overcome that challenge or whether you even need to overcome that challenge at all.

Observe another business. Borrow ideas from others by observing a different business or industry. For example, visit a local manufacturing facility if you manage an office. Pay particular attention to ways they maximize productivity. You can utilize the techniques and strategies from what would appear to be an unrelated business or industry.

Try a different promotional medium. Sometimes, reaching out to prospects via a new promotional or communications medium will create more demand. Try sending text messages or posting on Facebook with special discounts to generate more sales.

Remember that for innovation to pay off, an analytical process needs to overlay the innovation for the most profitable results. The process incorporates:

  1. Idea generation
  2. Screening and evaluation of each idea by a team of people
  3. Analysis of the revenue and cost implications for the ideas
  4. Development of the idea with a plan of action and prototype
  5. Testing of the idea through focus groups, pilot programs, or surveys
  6. Commercialization or full implementation of the idea

If your idea checks each of these areas, it might be the innovation your small business needs.