Innovation is essential for driving organisations of all sizes forwards, but the demands of entrepreneurship mean it often gets overlooked. Here’s why innovation should be a priority for entrepreneurs, and how to make time and space for it in your small business.
Innovation is a buzzword you’ll hear everywhere, and for good reason. It’s what business growth, and ultimate survival, is based on – you can’t solve new problems with old solutions.
Many founders fall into the trap of thinking innovation is reserved for big companies with whole teams dedicated to generating new ideas – but it doesn’t have to be groundbreaking to be significant.
Innovation simply means doing something differently to create more value. Incremental improvements quickly add up to a business that’s more efficient and resilient, and add value to your pitch when it comes to seeking investment, too.
For one business, innovation might look like introducing a new process, or updating a current one, to save money and cut waste by using less resources. For others, it might be launching a new product to reach more customers, or implementing technology to make arduous everyday tasks a bit quicker.
Innovation is often seen as a ‘nice to have’ project for when things are quieter. But founders rarely have down time, and true innovation isn’t achieved in a spare hour every couple of weeks. To implement ideas that generate business growth, effectiveness and efficiency, you need to dedicate time and resources to making it happen.
Introducing innovation in your small business
Being a small business puts you in a really strong position to share ideas, try new things, and adapt to changing situations. Establishing a culture that enables innovation by giving it the same priority as other business-critical work is central to making the most of this advantage.
Developing a culture of innovation doesn’t just bring the benefits of the individual improvements you make. It also ensures your business is able to adapt, either temporarily in response to unexpected events, as seen during the pandemic, or more permanently to align with shifting market trends and economic fluctuations.
The ‘innovation mindset’
Founders will be familiar with the idea of pursuing something without knowing if it will succeed – and to be innovative, you’ll need to apply this mindset throughout your business.
Innovation doesn’t happen without trying something new, and some level of failure is inevitable when doing so. What matters is your willingness to accept when something hasn’t worked out, and move on having learned valuable lessons from what went wrong.
As user dodger shared on our forum: “Don’t be afraid of changes, be open to new ideas and be ready to continuously improve your product or service. Flexibility and the ability to respond quickly to changes in the environment can make your business more sustainable and competitive in the long run.”
Make innovation a collaborative project
Adopting an innovation mindset doesn’t just set you up as a founder to embrace new ideas – it also helps to create a space in which other people feel empowered to generate and share ideas, even if they don’t work out.
Of course, this means you will need to be open-minded about hearing other people’s input, even if it differs from what you think. A leader who is willing to accept influence from their team and try new ideas, regardless of where they came from, is where building a culture of innovation really starts.
Involving your whole team in the drive to be more innovative gives you access to a variety of perspectives and experiences, as well as insight into what’s happening across your business.
You can put this into practice by devoting regular time in the diary to innovation. This could be as simple as a whole team meeting, where people can bring ideas for discussion. The ideas don’t have to be fully developed – the point is to spark a discussion and get everyone talking freely about innovation, even if the original idea doesn’t go anywhere.
Be open to inspiration from anywhere
When you’re brainstorming ideas, it’s common to look to others in your industry for inspiration. And this is a helpful way to be aware of the changing landscape of your sector – but it also risks you getting caught in an echo chamber of copying what everyone else is doing. Before long, it can start to feel like you’re just catching up with your competitors rather than innovating.
All organisations need to innovate, whether they’re a sole trader, multinational corporation or not-for-profit organisation. And while they might be doing something totally different to you, their new production process or social media strategy might suit your business perfectly.
Do your research on innovations happening in other sectors and what other businesses are doing, such as by asking a question in our small business community forum. Even if you can’t copy their ideas directly, don’t underestimate their power to get you thinking and open your eyes to new possibilities.
Innovate for your customers
The potential for innovation is everywhere, and if you’re in the headspace to drive it forward and be open to any and all ideas, you can quickly end up with choice paralysis. New technologies launch every day which claim to solve all your problems, but they won’t all be right for your business.
To decide which ideas to move forward with, consider what your customers need and want from you. Focus on what you know about them from your market research and data about their buying behaviour, and think about which of your potential ideas will serve them best – therefore generating the most value for you.
How to fund your innovation
Small businesses rarely have the innovation budget of the big players. But new ideas aren’t about who can splash the most cash, and you don’t have to be afraid to start thinking innovatively in case it costs too much money.
Firstly, some of the ideas for innovation you and your team generate may not even cost that much – or anything at all. Or you may find that when you look into it, the return these ideas will generate more than makes up for the initial investment. So don’t write off any potential options before you’ve fully understood the costs and returns that will be involved – you may be surprised.
If it turns out you have got a groundbreaking idea that’s going to need some funds to put into action, don’t fear. There are funding options that UK businesses can explore.
UK Research and Innovation is a government body in charge of investing in research and innovation across the country, made up of nine councils who oversee innovation in different sectors.
UKRI’s website has a complete directory of current funding opportunities, as well as all the resources you could want to help with your application. There’s even comprehensive guidance on what to do with your funding once you receive it, and how to report your outcomes effectively.
UKRI can also support you with applying for funding through Horizon Europe, an EU research and innovation programme which UK businesses can apply for. Through UKRI, you can access advice and guidance to help you meet partners, form consortia and navigate the application process.
Elsewhere, you could look for government business grants. Grants are typically based on needs in different geographic areas, so contact your Local Enterprise Partnerships Growth Hub for funding opportunities in your local area.
Grants being the dream funding stream – money in exchange for nothing that you don’t have to pay back – means that competition is usually rife, but there’s often plenty of application support available.
If you’ve got an idea for a great new product, you can use crowdfunding to raise the money to make it happen.
Crowdfunding is when businesses launch an online campaign to raise small amounts of money from a large number of people. It’s an effective way to not only get the money for your new project, but also to generate interest around your brand and create a community of your early adopters.
Typically, you should offer people who contribute to your crowdfund one of three rewards in return:
- A product or service, such as early access to the product when it launches, or something extra like a free gift or special edition
- A share in your company
- Their money back, with added interest
Which of these you choose will depend on your type of business, and what you are able to offer. You could research successful crowdfunds from your sector to see which format typically gets the best results.
Like all investment raises, crowdfunding takes a lot of work. You’ll need to put significant effort into marketing, including a crowdfunding video that sets your business apart. And you can’t crowdfund with just an idea – you’ll need a prototype product and considered performance forecasts to demonstrate the value to investors.
But if you’re willing to put in the hours, yours could be another of crowdfunding’s many success stories.
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