How Can Innovation Help Small Businesses

According to a US Innovation Survey, 84% of executives believe that innovation is essential for their growth strategy. They also believe that their future success is highly dependent on innovation. 

But what is innovation? And should small businesses prioritize it too?

In today’s post, we will discuss the impact of innovation on small businesses in great detail. So, without further ado, let’s dive in!

What Does Innovation In Business Mean?

The literal meaning of innovation is a new idea, method, or way. But in business, the term means a new product, service, or even strategy that benefits the organization. This can be in different domains such as TransportationPublicityFunctional SourcingEducation, or Investing.

The purpose is to make the business competitive and efficient. So, it isn’t necessary to create unique breakthrough technologies to be innovative. You can make simple upgrades to improve the efficiency of your workflows and that will also be called innovation.

One example is upgrading to a better EFTPOS machine, like Smartpay, for accepting payments. This will allow you to improve your operations by offering contactless payments, a wide range of POS integrations, and eliminating merchant service fees. 

How Can Innovation Help Small Businesses?

Small businesses are usually stuck in the survival stage. With so much competition, the primary focus of most small businesses is to achieve breakeven and build a customer base. 

All this means that innovation is the last thing on the list. But if small businesses prioritize innovation, it can pull them out of the survival stage faster. Here are a few reasons why. 

  1. It Makes You Stand Out From The Competition

When several businesses are already offering the same product, how does a new business convince people to buy its product? Through innovation!

All you need to do is develop a unique aspect of your product or service. For example, if you sell cakes, use innovation to make them a little different from the competition. Maybe you can offer new cake flavors or aesthetic designs not available with your competition. 

This will make your product stand out. It’s not just a cake anymore — it’s a soft and moist European-style chocolate cake or kawaii Korean cake! 

By including innovative features in your product or service, you can differentiate yourself from competitors and capture the attention of potential customers. If you offer landline phone service, consider integrating advanced features such as call forwarding, voicemail-to-email transcription, or virtual phone numbers.

  1. It Streamlines Cash Flow

Handling cash is a very important task for small businesses. Each cent holds great value, so the business should be on top of its cash flow. Did all the customers clear the payment? Is there any credit left?

Unfortunately, most small businesses rely on traditional means to handle their cash flow. They would count banknotes and maintain accounts manually, which means a high chance of error and hence, loss.

Innovation can help resolve this issue. For example, using a simple bar-code app for payment means more customers can clear their bills quickly. Similarly, setting up automated accounting software or outsourcing bookkeeping means faster and more accurate accounting. 

  1. It Boosts Customer Relations 

Innovation doesn’t end at products, services, and operations. It is also present in the relationship between you and your customer. Equally important is how certain businesses, like bars and restaurants, engage their audience through live events and programming. For example, offering live sports broadcasts can significantly enhance customer engagement and loyalty for these establishments. This approach not only provides guests with a unique and enjoyable experience but also fosters a sense of community among patrons, which is beneficial for business expansion.
  1. It Helps Guide Marketing Strategies

If you really want your small business to grow, the use of innovation in marketing strategies is very important. But how do you use it?

Well, it’s pretty simple — research customer needs, behavior, and market trends to make changes to your product or service and highlight them in your marketing materials.

For example, you can rebrand your packaging or introduce a customer loyalty program.

Similarly, innovation can also help find new markets and regions to sell your product. You can even find new target audiences for a product or service. 

  1. It Maximizes Efficiency & Profitability

Last but not least, innovation helps improve the efficiency of a business. This may occur in the following forms:

  1. Sourcing material from cheap suppliers.  

  2. Using automated software for accounts, inventory control, and orders. 

  3. Assigning weekly/monthly tasks to employees using a project management tool. 

  4. Upgrading machinery for better production, economies of scale, and less employee idle time.

All of this helps either reduce the direct cost or time taken for a specific task. Consequently, business operations become efficient, leading to higher profits and more growth opportunities. 

Stop And Innovate

To sum it up, innovation can help a small business achieve a lot. If you want to grow into an empire, you should never let go of it. innovation will guide you about the most profitable changes in your product, operations, marketing, and overall business structure. 

If you ignore it, your small business will stay stuck in the survival phase. The decision is yours!

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