Small, nimble companies can create new ways of doing things, too.
Business continues to evolve, and to succeed in the market, you have to evolve, too.
The key to success, for example, used to be working long, long hours. Times changed, and small business owners began focusing on working smart. In today’s ultracompetitive market, which is more crowded than ever, you have to innovate.
What Innovation Really Is
Innovation and creativity are closely related. Creativity is an idea of how to do something differently while innovation is implementing that idea, thereby introducing something new. As it relates to business, innovation is providing your product or service in a new way that creates additional value for your customers while simultaneously lowering your cost.
Innovation is not specific to technology—you can innovate any segment of your business. If you create a way to reach more prospective customers in less time and at a lower cost, you have stumbled upon an innovation. An innovation does not require that you do something radically different: You can do the same thing in a different way.
The right innovation can skyrocket your sales, increase your market share and cause your competitors to work feverishly to copy what you have created. Small business owners who innovate successfully tend to become successful as business owners because of their innovation. So, with so much to gain, why are so few business owners willing to innovate? Fear.
The new delivery process you implemented could wind up costing more—lots more—than you projected, and it might take months to recover from the financial hit. If you recover.
Fear of failure affects small business owners and Fortune 500 CEOs alike. But risk is a part of business. A good business leader is daring enough to take sound risks.
Not Your Responsibility?
Most small business owners are content to wait for someone else to innovate their industry—yet these same owners complain about their shrinking market shares. Having an exceptional product or service or offering an unusually low price gives you a competitive advantage, but so does conducting business more effectively or more efficiently. And innovating allows you to do both.
When you fail to look for ways to innovate and business grows stagnant, your competitors gain ground. I find it odd that small business owners tend to wait for larger competitors to innovate the industry because small business owners, who know their customers personally, know exactly what their customers like and dislike. Corporate executives get a wealth of information from customer surveys, but these surveys do not provide the depth or breadth of information that face-to-face conversations do.
Another advantage small businesses enjoy is, because they have fewer employees, they can change direction in a matter of days rather than weeks or months.
It is often assumed that an innovation revolutionizes the industry and makes its creator famous. In reality, lots of business innovations are only known by a relative few. Nearly every business recycles, for example, but exactly who began the recycling craze in America?
Innovation Is Your Responsibility
When consumers look at your business, do they see a business that evolves with the times and finds original ways to meet customers’ ever-changing demands? Or do they see a business that continues to do things the way it always has?
If you wait on a larger competitor to introduce innovations to your industry, you could just copy their ideas. That might even seem like a more effective and more efficient way of doing things. Unfortunately, you’re giving that competitor a head start, allowing it to capture a larger share of the market.
But if you innovate? Between the time you implement your innovation and the time others implement it in their businesses, you will have adjusted your position and created a competitive advantage until everyone else catches up with you.
Uber—which started as a small company competing with the giant Yellow Cab—is an excellent example of combining an innovative business model with innovative technology. By using Uber’s app on your smartphone, you can find where the nearest driver is, see a photograph of the driver and be taken to your destination without needing cash. As a result, Uber has surpassed Yellow Cab because of its innovations and its ease of use.
Use Your Advantages to Create New Advantages
As a small business owner, make use of your close relationships with your customers. Pursue them and ask what they like and dislike about your product or service. Do not view negative responses as complaints. See them, instead, as areas of opportunity.
The stakes are high. Just because big businesses tend to dictate what happens in the industry does not mean you should be content to allow them—or anyone else—to introduce innovations. Look at every practice, procedure and process you use, and find creative ways to do things better.