Your business needs to keep moving forward if it is to grow in
today's business environment of increased competition, global marketplaces and fast
technological change. To do this it needs to innovate.
Innovation is essential for all businesses - whether it's modifications
and updates to existing products, services or processes or coming up with completely
new ideas.
This guide explains how innovation can help your business grow and outlines the
different forms it can take. It also gives advice on planning for innovation and
creating a business environment that nurtures innovative ideas.
It outlines the Government help and support available to innovative businesses.
At its most basic, innovation means introducing something new to
your business. That could mean:
- creating new processes that might allow you to manufacture
your products or supply your services more efficiently
- developing new products or services - perhaps
to meet changing customer demands
Innovations can be major breakthroughs, perhaps giving rise to
a completely new product, such as a videophone.
But they can also be small, incremental changes - producing a sharper
picture on a videophone, for instance.
Regardless of the form it takes, innovation is a creative process.
It involves the exploitation of knowledge, ideas, research and development, training
or management techniques.
Introducing innovation can help you to:
- increase productivity
- reduce costs
- be more competitive
- find new markets
- exploit new partnerships
- increase turnover
Businesses that fail to innovate run the risk of:
- losing market share to rivals
- seeing efficiency drop losing staff
- stagnating
- going out of business
Innovation in your business can mean introducing new or improved products, services
or processes.
Analyse the marketplace
There's no point, however, in considering innovation in a vacuum. To move your business
forward, you need to study your marketplace and understand how
innovation can benefit your customers. For more information on
analysing your marketplace see the page in this guide on
planning innovation.
Identify opportunities for innovation
You can identify opportunities for innovation by adapting your product or service
to the way your marketplace is changing. For example, if you're a specialist hamburger
manufacturer, you might consider lowering the fat content in your burgers to appeal
to the increasingly health-conscious consumer.
You can also innovate in your business by identifying a completely new product.
For example, as a burger manufacturer you could start producing a vegetarian burger
as well as a meat one.
You could innovate by introducing new technology, techniques or working practices
- perhaps using better manufacturing processes to give a more consistent
quality of product.
If research shows people have less time to go to the shops, you
might find it helpful to innovate your distribution processes, offering customers
a home-delivery service, possibly tied in with online and telephone ordering.
And if your main competitor's products have a reputation as cheap and cheerful,
you could innovate by revamping your marketing to emphasise your quality - and perhaps
take the chance to review your pricing.
The competitive edge
The important point at all times is to consider how innovation can give your business
a competitive edge and help your business grow.
If innovation is to help your business grow, you need to plan carefully. Though
some ideas may just come out of the blue, you also need to have a strategic
vision of how you want your business to develop. You can then focus
your innovative efforts on the most important areas.
Start by considering all aspects of your marketplace. You should:
- look closely at your competition
- study trends reports
- seek customer feedback
- listen to your suppliers and other business partners
- follow news in your sector, including reports in trade and professional
magazines
Think carefully about what you could do to improve your position in your market.
You need to consider how you can offer your customers added value
and how you can better exploit your strengths.
Next, you should consider what any particular innovative step could mean for your
business. Ask yourself:
- what the impact on your business processes and practices will be
- what extra training your staff may require
- what extra resources you may need
- how you'll finance the innovative work
- whether you'll be creating any intellectual property that will
need protecting.
You could finance innovation using your own funds or external funding such as loans
or equity finance. Some government grants are also available for innovative businesses.
Finally, you should include your vision in your business plan. Put down your goals,
both long-term and short-term, and detail how you intend to achieve them. Link them
to financial targets, such as achieving a specific turnover by a set date. Review
your plan regularly.
Your people are your most vital asset and can be the source of
many innovative ideas.
But to get the most from them you need to foster an innovative environment and nurture
creative thinking.