Small Business, Big Impact: Leveraging Tech for Innovation

Bringing up business innovation is a total conversation killer during networking events.

And I totally get it. Daily operations take a lot of time and focus - and innovation feels frivolous, expensive activity more fitting to startups or larger companies with dedicated R&D departments and requiring significant funding to start.

But is it true?

Innovation - act of creating something new

Small businesses have unique advantages when it comes to innovation. You don’t need to disrupt industries or create revolutionary technologies.

But leveraging technology lets businesses test ideas quickly and affordably.

Your customers increasingly expect innovation - and with the right approach, you can make it an important part of your business strategy.

Why SMBs Should Innovate?

The better question is - what is the business benefit of making it refreshingly painless for your customers to pay you - thanks to the ease of experience of finding you, locating correct product, completing transaction and receiving support? What is the business benefit of creating a completely new source of revenue using mostly the assets you already have?

Innovation done right brings an increased customer acquisition and retention, higher transaction values, reduced operational friction and better profitability. Creating new revenue streams from existing assets maximizes your return on investment without proportionally increasing costs.

Imagine two similar landscaping companies. One has a basic website and only takes checks or cash. Another provides options to view and book specific services, has a local data-based gardening guide, shows instant online estimates, and allows to pay automatically via credit card. Which company is more attractive for busy families?

Why Tech Provides an Edge for Innovation?

Tech provides creation, distribution, and scalability of your ideas - at a lower cost and risk than building a physical product. If the experiment didn’t work out, the parts of tech can be reused for a new idea - try that with manufacturing!

And it doesn’t have to be a complicated cutting-edge AI solution - DoorDash has started with a few PDF menus and a website. You could, of course, aspire to become a tech unicorn like Shopify, but that’s not a requirement.

What else can give you the ability to try out an idea for under $50?

Considering Emerging Technologies

AI is a current buzz - but technology is constantly evolving, and every cycle produces new opportunities. Have a great idea that’s not possible to accomplish today? It may be a possibility in just a few months.

Just recently the process to isolate your product image and generate custom photos placing the product in the customer’s environment would have taken multiple steps and at least 10 source photos. Now, the process can be accomplished in one try. Perhaps not yet production ready, but think of possibilities - for example, generating custom style composites for a home decor retailer showing how items may look in different rooms.

What Innovation Advantages do SMBs have over Startups?

While startups are formed for the purpose of rapid growth and usually have access to capital, SMBs have many unique advantages.

Direct access to customers

An established business has actual customers - allowing for quick experimentation with real-time feedback and ease of distribution.

Proven Domain Expertise and Secret Sauce

Businesses that have been around for a while have established their authority - and have specific processes and knowledge that are valuable to others.

Multiple Build-In Markets

SMBs can sell to customers, peers and newbies. Let’s take the same landscaping company as an example. Innovation product for customers: DIY landscaping guide (“Tips and Tricks to make your yard look like a pro did it”), delivered as web app. Innovation product for peers: price calculator for jobs (simple app). Innovation product for newbies: a workbook on how to start in the industry with marketing campaign templates that work.

What innovation advantages do SMBs have over large companies?

While larger companies do have customers and bigger budgets, SMBs have significant innovation advantages as well.

Decision agility

In larger companies, any decision needs to be made by a large committee. Getting everybody on board sometimes takes longer than actually trying to implement an idea and learn from it.

In SMB world, the owner can be the ultimate quick decision-maker.

Do more, talk less.

Pivoting flexibility

Like a large ship, it’s hard for corporations to change course quickly. So when a storm approaches, and you notice a new safe harbor, a smaller company may adjust and reach it quicker.

Taking advantage of innovation opportunities is simpler when you are nimble.

Risk tolerance

This one may feel backward - but consider scale. It’s easier to try out a new process that only affects 10 transactions a day - vs thousands. In larger companies innovation experiment failure may look like a major disaster, creating a culture of change resistance - it’s too scary to move fast and break things.

Personal relationships

Smaller businesses don’t just have a built-in customer base; they know their customers, talk to them directly and have regulars. The personal connection makes it easier to understand the client’s needs, create truly innovative ideas, and get honest feedback.

In contrast, larger companies rely on marketing agencies to conduct surveys as their relationships with customers are transactional.

Less Operational Silos

Every large company recognizes the importance of innovation - and often tries to solve the percieved lack of it by hosting group innovation workshops.

But to run such workshops effectively, you need to know your audience. Without close relationships with the customers, solid silos between different departments, and layers of management, it is challenging for corporations to land truly innovative ideas consistently.

Small businesses do not have such barriers.

Innovation myths

Lets examine some misconceptions that may be holding you back.

Innovation requires a lot of money

You can start with a PDF to prove your idea. Or create a web app via low-code editor like Webflow or Bubble and host it for free. Or take advantage of free tiers.

To validate your innovation, you just need an idea and equivalent of few cups of coffee.

Innovation must be impactful

Who sets the rules?

If your new automation process shaves 30 minutes off invoice processing every day - that’s an impactful innovation for your business.

Innovation requires a lot of time

You can’t really pencil in a “30 minutes to innovate” appointment every week. Innovation is a mindset - and something that arrives organically once you start looking for it.

Starting small is clever from both a financial and time investment point of view.

How to start business innovation

The early steps are similar to any new project you may embark on:

• define your goals
• figure out what success looks like
• start small in low-stakes, low-risk environment

But how do you start? What does the process of innovation discovery look like?

Audit Your Assets

List what you have that’s unique. Process or methodologies, data, brand recognition, secret formula, geographical location, expertise and experience - don’t underestimate how valuable something can be to others that appears banal to you.

Example: you are running an appliance repair business, so your asset is data on repairs. Use tech to collect, clean, and summarize data on the repairs. Use data to create new info products to drive traffic - brand recommendations, estimated maintenance cost calculator, most likely repairs, and repair videos. Expand to a DIY parts store tied to your recommendations/videos.

Focus on the problem

Are you trying to solve customer friction, operational bottlenecks, unmet customer needs or address market gaps? Do you need to sell what you have in a new way?

Too many choices are a bad thing for creativity. Narrowing down the field will help you to be more productive.

Brainstorm

Here are a few questions to guide your thinking.

• What if you put things together? Example: Order fulfillment talking to inventory reordering.
• What if you make it faster? Example: Billing automation.
• What if you made it simpler? Example: search for a product from the image.
• What if you used your data? Example: predict product demand next month.
• What if you made it accessible on the web or mobile app? Example: create a “deer will not eat these plants in your zip code” web app.

Find Partners

Once you have a few ideas, evaluate how possible it is to implement them. If there is nobody internally who can do a feasibility study and create an implementation plan, look for a partner who can do that for you (hi! hire us!).

The study should filter down your list to the most probable ideas while providing a clear plan for the implementation timeline.

Validate your ideas

And to pick just one idea, work on validation.

You can get feedback from your customers by posting the announcement on social media. Or talking to them in person.

“Just so you know, we are planning to offer X next month.”

Once you gauge the interest, it’s time to start building!

Building innovation culture

Does it feel like the world is changing more rapidly - with enough black swan events to fill a lake? The real threat to your business is continuing business as usual - just ask Blockbusters. Building the culture makes you more agile and prepared for changes and turns, helping you see opportunities in every challenge.

Remember how, during the pandemic, some restaurants went out of business while others thrived with “dinner kits”, takeouts, and online classes?

You have everything you need to start

Innovation is never “done” - it’s not a project. The most important step is just to start - and don’t let the innovation myths stop you.

Businesses that evolve continuously and leverage technology effectively have the future.

We are here for you

Looking for assistance with your practical innovation challenge? We offer an innovation workshop designed to help you create a new source of revenue or revamp the existing process. Contact us to get your custom strategic map and implementation plan.