Why can’t small businesses innovate?

It would only stand to reason that a smaller, more agile company should be best positioned to create the most innovative ideas. Well…this isn’t necessarily so. Absent several key ingredients, such as money for R & D, available staff, and a lack of vision that big companies can make happen, small businesses have discovered that their challenge lies in learning to innovate in spite of, and sometimes because of these facts. Research conducted recently by Erik Hurst and Benjamin Wild Pugsley of the University of Chicago called “What do Small Businesses Do?” found that fewer than 50 percent of new business startups were born from a “new idea”. Furthermore, they found that most of these new businesses are essentially more of the same, offering an additional coffee shop, bakery or tax service to a marketplace full of these services. Not much innovation, greater competition, and little chance at exponential growth.

Why-cant-small-businesses-innovate

So how does a small business get from the morass of just another business to one that is offering new and exciting services and products people are clamoring to try?

4 Strategies for developing a culture of innovation in your business!

  • Reward and encourage innovation – Give your staff perks and tangible rewards for coming up with and helping to implement new and innovative initiatives. Creating some enthusiasm around finding new and better ways to run your business ought to benefit them as well.
  • Know what your market wants and needs – Keep your finger on the pulse of current trends and ideas in your market. Attempt to not only keep up, but be on the leading edge, which is only possible if you are watching and listening!
  • Be sure to connect with your existing customers – Listening and taking into serious thought what your customers say about not only your business and products, but about what their wish list contains is vital in helping to recognise a direction you may want to explore. Keep the conversation focused on what are the customer’s problems, and use those to help fashion solutions!
  • Be open to new ideas – Don’t be reluctant to try something totally new. A great demonstration of this in action is Behance.net, a Web-based platform for creative works, where artists can display their work regardless of their resumes, seeking to turn more ideas into reality.