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Innovation

Gearing your Business for Innovation

As an entrepreneur, constant innovation is critical for the long-term sustainability and success of your business.

Shawn Theunissen

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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…

Defining innovation in the context of a SME

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.

Shawn Theunissen is head of Corporate Social Responsibility at Growthpoint Properties and the founder and manager of Property Point, Growthpoint Properties’ enterprise development programme. Shawn’s diverse enterprise development expertise includes designing and implementing business support services; creating market linkages between SMEs and large corporate entities; and providing capacity building support, and process and learning journey facilitation. For more information visit www.propertypoint.org.za

Innovation

Why Smart Business Growth Means Smart IT Budgeting

(…And how to do it)

Colin Thornton

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For any business today, no matter its size or sector, getting the IT budget right has become a critical part of success and sustainability.  The difference between a three-device network and a fifty-device network has significant ramifications for your IT spend and your overall budget outlook.

Let’s take a closer look at several potential costs and how to plan for them…

Network: The driving force

Essentially, the network is the backbone/core of your IT infrastructure. It needs to be reliable, fast and efficient. Often, a young and growing business will have a piecemeal network in place, bolting on new sections over time. This can lead to the network becoming inefficient and slow.

The important thing to note is that when you have reached capacity on your current network, is it’s sometimes better to start from scratch and also leave room for expansion down the line (rather than adding to the existing network as a quick fix).

While it may appear more costly (and scary), the end result is a reliable network that you won’t have to worry about revamping for many years.

Related: How Dial A Nerd Managed To Dial Up Profits

Licensing: Pricey but critical

Software licensing often comes as an unexpected (and unpleasant) cost to many business owners and their financial teams. Indeed, purchasing legal software can be pricey if you aren’t prepared for it (and don’t understand how it all works!). However, if you buy software licenses in bulk, or commit to a longer term, they can cost far less…so again, budgeting intelligently for your business growth can save you money in the long term. Also remember that many software licenses nowadays can be rented on a per user per month basis so its flexible and always up-to-date.

Maintenance: Be realistic

As the business grows and expands, so too will your IT maintenance needs. The key factor to note is to carefully consider the potential costs of IT failures and hardware issues. You need to take into account that you will undoubtedly have to spend money on maintaining your computers and overall network – and breakdowns can be extremely costly in downtime and lost productivity.

Some businesses find that it makes good financial sense to employ someone to be an IT technician in addition to taking on other responsibilities – but this person may not have the right expertise and experience to manage everything. The other increasingly popular option is to outsource your IT management.  With flexible pricing options now available to businesses, this is becoming a viable and often much more flexible route to take.

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Company Posts

Think Beyond The Box

With a holistic view of your business finances and admin in place, Sasfin’s new digital banking platform is engineered to help you grow your business.

Sasfin

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Welcome to the banking platform designed to support your banking needs. In response to more than 50 years of financing and supporting SMEs, Sasfin has launched a digital banking platform, B\\YOND, to help address the pain points and pressures that business owners face in South Africa.

“We’ve spent decades understanding what makes SMEs succeed or fail, and a lot of it begins with how well a business owner understands their finances,” says Sasfin CEO, Michael Sassoon.

“Failed SMEs often tend to either neglect or become completely consumed by their finances and admin. We wanted to create a platform that could help them take control of these factors, and give them a full 360-degree view of their businesses.”

B\\YOND was built to enable businesses to attend to their finances and admin seamlessly, thereby ensuring that entrepreneurs can focus on their clients — driving revenue and enhancing their products and services in the process.

Related: What To Consider When Investing Your (Hard-Earned) Money

Everything you need on one platform

According to Sassoon, entrepreneurs on the B\\YOND platform will never need to set foot in a branch again. The sophisticated technology incorporates many value-added services at no additional cost, including:

  • B\\YOND online applications: Businesses with multiple shareholders and directors can apply online, by uploading documents and signing the application digitally.
  • B\\YOND payroll: A simple-to-use and SARS-compliant payroll function enables business owners to perform their own payroll management.
  • B\\YOND invoicing: Businesses can create and send personalised quotes and invoices directly from the platform.
  • B\\YOND insights: Smart dashboards generated through clever account and transaction classification and tagging helps manage revenue and expenses, and keep track of projects.
  • B\\YOND integrations: Direct-feed integration into Xero ensures that small businesses and their accountants can safely and seamlessly connect their Sasfin Bank transactional data with Xero, the fastest growing cloud-based accounting software provider in the world.

Serving the entrepreneur

While there is much in store for the next versions of B\\YOND, the platform currently offers business leaders the basic tools they need to run their businesses smoothly in one place at no additional cost, with the ability to bank at their convenience.

“Sasfin has always existed to serve the entrepreneur and investor, the two key drivers of the South African economy and it bothers us that there is such a high failure rate of entrepreneurs in our country. We have spent the last three years building B\\YOND — a future-fit digital banking platform to help these entrepreneurs,” says Sassoon.


Engineered for success

Sasfin has gone above and B\\YOND to bring you a new digital banking platform that gives you the tools to make managing your business simple and profitable.

B//YOND is a value-add to all Sasfin Transctional Banking clients

Bank outside the box

The Sasfin Transactional Banking Business Account is designed for SMEs who want to focus on what they’re most passionate about — their business — while their banking platform not only sweats the small stuff for them, but helps manage and grow their business.

  1. Do you spend unnecessary time on banking?
  2. Does your bank pay you market-leading annual interest rates?
  3. Does your bank give you easy cash management in real-time?
  4. Would you like to manage your payroll and invoicing from your bank account?
  5. Does your bank help you keep track of your cash flow, manage your admin, and provide you with the set of tools you need to help run your business successfully?

Sign up today and have access to a whole new world of banking better for your business.

Visit: www.sasfin.com/bank/byond/

Call 0861 SASFIN for more information.

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Innovation

A Short Cut For Corporates To Digital Innovation: Start-ups

Charlie Stewart, co-founder and CEO of Rogerwilco shares his advice for turning to start-ups for solutions.

Charlie Stewart

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If there is one anathema in corporate culture, it is failure. With profit to be made and share prices to increase, failure is simply not an option. And yet, when listening to stories about success in the digital space, failure is there to put one on the right path to success. The phrase ‘Fail fast, Fail often’ is often bandied about, and innovation can be seen as a constant process of iteration, test and failure, repeating this until a well refined service or product is on the table.

Many corporates are waking up to the uncomfortable fact that at a structural level, the type of innovation required to grow in today’s digital landscape, is out of their reach, at least when trying to come up with it internally. So what to do? Charlie Stewart, co-founder and CEO of Rogerwilco shares his advice for turning to start-ups for solutions.

1. The start-up solution

Corporates comfortable in the digital space – Apple, Alphabet, Facebook and Amazon – have been buying startups for years, and now companies are realising that when it comes to Blockchain, artificial intelligence and machine learning, they need to turn elsewhere. And they are. Matt Garratt, Vice President of Salesforce Ventures noted that of the roughly 1500 tech acquisitions Stateside in 2016, half of them were bought by non-tech companies, showing that buying a start-up is a quick way to acquire new technologies, skills or patents.

Related: Why Optimism Isn’t Enough – You Need To Also Accept The Brutal Facts

But purchasing a company with a fully developed product can be an expensive and often risky play. Instead we are beginning to see a trend where corporates are framing agile startups as solution providers, offering them seed funding to come up with answers to digital headaches.

In the US, defence contractor Lockheed Martin has turned its investment strategy around, focusing on young startups instead of more mature companies. In the region of $20 million was ploughed into startups in 2017, helping Lockheed Martin to get a slice of the pie in fast moving spaces such as cybersecurity, autonomous vehicles and nanotechnology.

2. Outsourcing the problem

For corporates turning to start-ups, there are two benefits. Firstly, by doing so companies are casting their net a bit wider, with not only more eyeballs on the problems but, importantly, without the restraints of the corporate boardroom. There is more out-of-the-box thinking involved, no internal politics to worry about and far less of a threat of somebody’s career being jeopardised.

Secondly, if a start-up comes up with a solution, investing in the fledgling company can be cheaper than purchasing one with an established solution. If a buy-out is on the cards, it is less risky too since the due diligence process has been worked through and cultural challenges have been ironed out.

But not all start-ups actually want a buy-out. Some rather prefer access to market and skills transfer, especially around the commercial side of business. Yes, they do need investment, so companies can provide them with a proof of concept to take their idea forward, or potentially a more structured form of investment in their business. 

3. Cape Town: the start-up hub of Africa

Locally, Cape Town can be seen as the tech start-up hub of Africa, and is certainly a good place for corporates to start sniffing around for that digital innovation golden ticket. Events such as last year’s AfricArena conference proved that Cape Town can be a fruitful hunting ground. 80 start-ups from across Africa attended the inaugural event, and were tasked to find solutions to problems provided by corporates beforehand. Air France, for example, was looking for innovative mobile solutions, the City of Cape Town wanted to see how technology can be used to improve the tourism industry, while RCS asked for a loyalty programme to match a new credit programme.

Related: 7 Ingredients Of Small Business Success Online

By all accounts the event was a major success, connecting start-ups with corporates and investors, both attending the event and dialing in. The winner of Air France’s challenge, mobile payment solution provider WeCashUp, received multiple offers of investment and the project has moved on to the proof-of-concept phase.

4. The start-up lifeboat

Many companies need to face up to the fact that the current corporate structure they are working within does not allow for the type of innovation required to adapt to, never mind thrive, in a digital world. South African companies were perhaps sheltered from the digital tsunami that has eviscerated the analogue business world, but the wave has hit our shores. If it is innovation that is needed, it is time to turn to agile startups, far better adapted to a sink-or-swim digital environment, to come up with the solutions.

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