As an entrepreneur, constant innovation is critical for the long-term sustainability and success of your business.
That being said, innovating doesn?t require you to be the next Steve Jobs or to create something the world has never seen before. In the context of a small business, it rather involves responding to your market?s needs quickly and accurately ? and ensuring that you put appropriate systems and processes in place. This will ensure that innovation becomes an extension of your business? thinking and operations?
While innovation is often thought of as something involving cutting-edge technology, in the context of SMEs it should rather be defined as a small business? ability to adapt to changes in its environment ? with the process catalysing new ideas, products and service offerings, and potentially different ways of doing business.
As such, innovation can enable your SME to exploit changes and opportunities in order to stay relevant and gain market share. This is especially possible given the speed with which you as an entrepreneur can effect change in your business.
Setting the scene for innovation in your business
Innovation needs to become a natural input and key ingredient of your business. Because it?s more of a mindset than a science, it needs to be driven by you personally. In my experience, it often starts with a ?can do? attitude and seeing opportunity where others find adversity. Remember that innovation doesn?t involve reinventing the wheel. The ?big? idea usually exists already ? it?s your ability to adapt the idea that will set you apart.
What drives innovation within your SME?
When looking at what systems and processes to put in place in your SME to enable innovation, it is important to correctly identify what is driving change in your market. This makes understanding your environment and market critical. (This understanding must extend to every single person your SME touches, including customers, stakeholders and suppliers.)
Understanding your environment will ensure that you are able to identify your market?s needs (including the pain-points and pressures driving business) and look for opportunities to address these.
As soon as you?ve found an opportunity, seize it. Remember that a gap in the market will only stay open for a limited time before a competitor closes it. As a SME you have the ability to take swift action and gain optimum market share. Use this ability.
What does innovation look like in the context of small business?
Seeing how other entrepreneurs innovate ? and adapt to changing market conditions ? can prove extremely helpful if you?re looking for ideas. Each of the below SMEs (all of which have been on our Property Point programme) has managed to find an innovative way to differentiate itself in the market place?
Example 1: Apple Green
In the case of Apple Green, a waste management company, innovation involved going back to the drawing board and coming up with a new product offering that was aligned with its market?s needs.
The SME?s original business plan involved providing a dustbin cleaning service to municipalities. While the service was extremely innovative, the market failed to respond appropriately. Realising that they needed to come up with an alternative plan, the entrepreneurs started paying close attention to conversations in the market around waste and waste management.
With climate change receiving more local and international attention,?and South?Africa?s new Waste Management Bill being tabled, Apple Green developed a solution that spoke to these needs ? while anticipating future ones. It started offering corporate complete waste management solutions, including setting-up recycling bins at office parks, collecting, recycling and managing waste.
By also offering to develop and implement ?green? strategies for its clients, it was able to further drive responsible waste management as per legislative requirements.
By innovating out of necessity, and developing and rolling out this solution, Apple Green enabled its clients to respond to the new Waste Management Act pre-emptively. In so doing, it positioned itself as an innovator and carved out a unique space for itself in the market.
Example 2: TMT Cleaning
TMT Cleaning is a cleaning company that provides corporate cleaning services. Because there are very low barriers to entry in this sector, it?s very difficult for companies ? especially SMEs ? to differentiate themselves.
In engaging with her clients and looking at market needs, the entrepreneur identified a clear opportunity: by adding ?green? cleaning products to her offering, she would be able to increase clients? green compliance, while positioning them as responsible and environmentally conscious. This helped her to differentiate her business instantly.
This is a good example of incorporating innovation into one?s business mindset. TMT didn?t try to manufacture green products of its own. The SME rather used what was already available to enhance its business ? and respond quickly to its market?s needs. In this way the business was able to gain substantial market share.
Example 3: Easy Security
Easy Security is a SME started by Smart Kunene in <insert year>. The company provides complete guarding and security solutions for corporates.
Shortly after start-up, the global financial crisis?hit South?Africa? impacting local business significantly. Smart subsequently made a decision to keep Easy Security?s debt ratio low by financing all business inputs with cash. Driven by necessity, his ?cash only? policy created stability for his business in an unstable market.
Smart?s ability to look at his business model and adapt this in relation to the changing market environment thus allowed him to innovate in terms of how Easy Security operates. In this way he enabled the company?s sustainability in very challenging times.
Innovation in practice ? steps to take to incorporate a spirit of innovation in your business:
When it comes to incorporating a spirit of innovation in your business, the starting point needs to be understanding your market and identifying the direction in which it?s moving.
As in the case of Apple Green, TMT Cleaning and Easy Security, you should therefore:
- Read and research: keep up-to-date with current trends and the general market environment.
- Network:? engage with relevant people in your market. Speak to your clients and understand their challenges and opportunities.
- Capture information: use the information gained from your research and networking and apply it in your business.
Your ability to use your feedback and insights will enable you to identify valuable opportunities to innovate.
In conclusion
As a SME, your business is ideally placed to be a constant innovator within your market and lead among your competitors. Change your mindset accordingly. Consistently listen to your market and use these insights to leapfrog larger players in the space. Above all, remember that opportunity is born from adversity ? it?s simply a case of finding the right opportunity and using it.
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