Network Solutions and the Center for Excellence in Service at the University of Maryland’s Robert H. Smith School of Business released the findings of their Small Business Success Index survey on February 16. The index is designed to track the competitive health of the small business sector over time, and the results are always interesting. Scores in 6 categories are graded; innovation got a C-. Let’s see why:
Innovation is Not Just About Creating a Cooler Widget. It is about Business Innovation Overall.
When many people hear the word innovation they immediately think of products like the iPhone that change the landscape and innovate an industry. While not every business can create a product like the iPhone, they can innovate. Slightly less than half of small businesses are successful in innovation. This is around the areas business process innovation, which includes coming up with new ideas before competitors and finding ideas to increase revenue.
The most recent SBSI wave examined marketing and innovation in greater detail, including the methods used by small businesses to attract new customers. When asked about six common categories used to obtain new business, the most common method – relied on by over a third of small businesses – is traditional print advertising such as newspapers, trade journals, and magazines. After this, email marketing is the second most common method used by a quarter of small businesses, and social media marketing which is used by a fifth. Half of small businesses do not use any of the six standard categories for marketing leads, but the majority of these “other” channels consists of reliance on referrals and word of mouth; this includes direct referrals, leads that come to the business because of its general reputation, or referrals by other businesses. Besides referrals, “other” types of marketing methods tend to be idiosyncratic methods related to the business such as:
- Walk- in traffic
- Outdoor advertising such as signs and vehicles
- Farm markets, craft shows, etc.
- Conferences, trade shows, and meetings (e.g., the Chamber of Commerce)
- Agricultural commodities markets
- Directories (print and online)
- Personal selling and cold calling
- The GSA Schedule for federal government business
- Volunteering in the community
The Economy has Been an Innovation Catalyst
An interesting thing I saw in the SBSI is that the economy has a silver lining in a dark cloud. The recession has had some positive effects on small business innovation, including leading them to:
- Find more efficient ways to operate (72 percent)
- Find new products and services to meet customer needs (47 percent)
- Become a better team (43 percent)
- Reduce inefficient or unnecessary staff (31 percent)
The Economy: A silver lining in a dark cloud. The recession has had some positive effects onsmall businesses, including leading them to:· Find more efficient ways to operate (72 percent)· Find new products and services to meet customer needs (47 percent)· Become a better team (43 percent)· Reduce inefficient or unnecessary staff (31 percent)
The Bottom Line: Innovate or Perish
So you now know that innovation is not just for making newer cooler electronics or widget. It is about innovating with your processes, learning about how to go against your competitors and use tools like social media to stand out. To survive you must innovate or perish. That’s it. So what are you waiting for?
Download the SBSI Report Right Now
If you are reading this on the web site, GrowSmartBusiness.com, you should see a link to the report or if you don’t or a looking at this in a feed reader, you can get the report at http://growsmartbusiness.com/wp-content/files/SBSI_February_2010.pdf
Google+Web.com is now offering forums designed to support small businesses in cities throughout the US. Learn more about these forums here: http://Businessforum.web.com/
Tags: Innovation, SBSI
Posted in Innovation, small business, Small Business Success Index | 6 Comments »
