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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 ground breaking 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 are discovering 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? We¬†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 yet another coffee shop, bakery or tax service to a marketplace stuffed with these services. Very little innovation, greater competition, and little chance at exponential growth.

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 Tips for developing a culture of innovation in your business!

  • Encourage innovation – Rewarding your employees with tangible rewards for helping to try new and innovative initiatives is an easy way to help launch your company’s venture into innovation. Try to create a buzz around discovering new and better ways to conduct¬† business and improve products and services.
  • Know what your market needs and wants – Keep your finger on the pulse of latest trends and ideas in your market. Make an effort to not only sustain, but be on the leading edge, which is only possible if you are watching and listening!
  • Connect with existing customers – As a way to truly determine what may be a great idea for your customer, you need to talk to them. And more than that, you need to keep the conversation centered on customer’s problems, and shape your strategies to provide those solutions!
  • Be willing to try new things! – Don’t be afraid to be innovative. A great demonstration of a company happy to fill a need is, a Web-based platform for creative works, where artists can show their work regardless of their resumes, hoping to turn more ideas into reality.