Malcolm Turnbull has been supporting the drive towards innovation since his commencement as Prime Minister, and this enthusiasm is flowing through to Australia’s small and medium businesses in a big way! We’re now seeing renewed incentives offered across tax deductions and additional support provided through SMB-orientated websites such as the new http://www.business.gov.au/ support centre.
A recent MYOB survey¹ showed that innovation through technology is on the top of SME’s to-do list with 1 in 3 Australian business owners having acquired new technology or equipment.
SME owners who embrace innovation fare better than business that don’t. Here are our tips on how to embrace and drive innovation in your small business.
Overcome the Fear of Change
7 out of every 10 private sector jobs stem from small business, however, about the same number fail to reach their full growth potential due to workplace culture.
A recent report by Microsoft on culture in small business² shows that thousands of Australian SMEs have the potential to become innovation leaders if they can address obstacles such as an organisation’s fear of change. Ask yourself the following questions and evaluate your business:
- Technology/equipment: Have I geared up my business for efficiency and productivity?
- Supportive culture: Do my employees value working in my business? What can I do to reinforce that motivation?
- Staff: Do I have next-gen staff that are accustomed to technology and driven by innovation?
The Microsoft research also found:
- Only one in three SMEs (33%) were innovation ‘Leaders’ i.e., they are adept at making the most of changes, threats, and opportunities in their niche.
- 43% were deemed to be innovation ‘Cruisers’–i.e., they are interested in innovation but have difficulties putting it into practice.
- 24% were innovation ‘Laggards;–i.e., they have little to no interest in innovation.
The results also showed, 39% of innovation leader’s revenue grew faster than the average rate, compared to 24% for Cruisers, and 23% for Laggards. Innovation leaders also reported better performance in business efficiency, customer loyalty, market share, employee satisfaction, and revenue.
Make a Case for Innovation
Innovation in its most raw form, is simply introducing something new into your organisation. Every business is different, in terms of strengths and weaknesses; innovation needs to be tailored to your business and more importantly, your target audience. This can be anything from:
- Updating business processes for better efficiency and productivity
- Developing new and/or improved products and services
- Introducing a unique selling point
- Devising improved services
Innovation can be a single, important breakthrough or it can be a series of small, incremental updates. Embracing innovation can improve productivity, reduce costs, build brand value, improve profits and help form new partnerships.
There are a number of ways to fund business growth through innovation. According to a recent report in Business Insider Australia, most SME owners (65.4%) actually dip into their own pockets to fund their operations³. There is also the option of banks, crowdfunding and private equity firms that can typically fund innovation ventures. Another option to enquire about is Alternative Lenders, like us! Our market has been gaining a lot of traction in recent years, and we’re gaining the support of both the government and consumers⁴.
The Road to Innovation Ahead
When it comes to new beginnings, we suggest you start small and focus on the cultural shift. It’s also important to ensure that your employees and equipment are up to the challenge of a brave new world.
From there, start working on small projects and ideas; these ‘minor’ innovation success stories can have a great impact on your organisation from a motivational perspective, allowing you to then move to the larger projects that require funding.
Once you’re ready to embrace innovation in your business and need funding, Get in touch with us.
Or call 1300 760 930 to speak with one of our friendly Lending Consultants now.