It’s been a tough year for thousands of small and medium-sized businesses around Australia but the outlook for 2021 looks more positive.
Innovation – finding ways to do things differently or better – could be crucial to helping your enterprise remain viable and capitalise on opportunities. But how should you go about it? Is a wholesale overhaul of your operations the answer, or could a less dramatic change of approach yield equally effective results?
Former Queensland Chief Entrepreneur and Shark Tank judge Steve Baxter is the founder of TEN13, a platform that links sophisticated investors with innovative new businesses. In his view, embracing some of the thinking of startups can be a way to help any established business strengthen their position, offering and approach.
Here’s his advice to help you innovate and improve your operations, as you prepare for 2021.
Instinct is not always the answer
Do you make business decisions based on hard facts or gut feel? If yours is an established business, in an industry with which you’re very familiar, there’s a fair chance you answered ‘yes’ to the latter. That’s unlikely to happen in a start-up, according to Baxter.
Typically, start-ups are obsessed with gathering data, which helps them read the market, identify customer trends and position their business to capitalise on them, rather than ignoring them and being taken by surprise.
Part of that process entails measuring and monitoring scores of statistics and activities, from the average cost of customer acquisition to the reach and return of social media advertising.
“Everything, from your accounting and point of sales systems through to social media and customer loyalty programs, is a potential source of information,” Baxter points out. “These days, there are lots of software tools that allow you to track and understand what’s working and what’s not, and start-ups have a religious zeal for this sort of telemetry.”
Rightly so, Baxter believes.
“Knowing how many customers you have, where the traffic is coming from, how they’re finding you and why they’re using your product is valuable. It allows you to determine what customers want and need – and then innovation comes in finding a really cool way to deliver it.”
Embrace a different direction
Making a sudden, significant change to your offering, or the way it’s delivered, can be a confronting proposition for traditional business owners. Not so for those in the start-up world, where ‘pivoting’ was a popular concept long before COVID propelled the term into common use. They’re generally nimble and alert and willing to turn on a sixpence if the market moves in a new direction. Some established business owners may do well to follow their lead, Baxter says.
“You’ve got to react to customers and there’s no shame in re-engineering your enterprise in the process,” he says.
“While start-ups tend to take the view that it’s okay to do one thing and then do another, people in traditional businesses can get so focused on the thing they’re good at, or were known for, that they don’t want to shift. It takes a real slap in the face before they’ll take action.”
Unleash the power of connection
Talking with other business owners in your sector might not seem like a smart move, if you’re worried about protecting your patch. That’s an attitude start-ups rarely take – and it’s to their benefit.
They network enthusiastically, online and in the flesh, share ideas with other businesses and very often pick up tips for improving their operations in the process.
“People have a perception of who the competition might be, but rarely do you come across a direct competitor,” Baxter says. “In a lot of cases, you’ll get far more out of connecting with people who may have some overlap of competition than you will by keeping yourself to yourself.”
You can count on numbers
Adapting your business model or modus operandi is challenging if you don’t know how your enterprise is travelling financially.
During his time on Shark Tank, the reality TV show that allowed aspiring entrepreneurs to pitch their offerings to a panel of venture capitalists, Baxter earned a reputation as a stickler for the numbers.
If you’re not on top of your financial fundamentals – think profit, loss, sales, margins and cash flow – it’s impossible to know whether it makes more sense to change course or carry on as you were, he says.
Prepare for a post-COVID world
“I believe the world will be normal again after COVID, but the question is, ‘When?’” Baxter says. “Focusing on continuous improvement and being willing to innovate will increase your chances of coming out well on the other side.”
That’s where thinking slightly differently – looking into your data for where you could be more productive or more profitable, considering new ventures and directions, connecting with people you wouldn’t normally, and getting much more familiar with your numbers – can make a difference.