4 ways small businesses can innovate without a big budget

Posted 1/18/24

(BPT) - By Irana Wasti, Chief Product Officer at BILLIn today's fast-paced business landscape, it’s important for small business owners to adopt a mindset for innovation. However, the …

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4 ways small businesses can innovate without a big budget

Posted

(BPT) - By Irana Wasti, Chief Product Officer at BILL

In today's fast-paced business landscape, it’s important for small business owners to adopt a mindset for innovation. However, the misconception that innovation requires vast resources and significant time investment can often deter entrepreneurs and business builders from pursuing new ideas and strategies. But with the right approach and perspective, small businesses can foster a culture within the company to make innovation more of an ongoing tenet of a successful business.

As small businesses look at their goals for the new year, with some businesses also thinking about how to do more with the same, consider these four practical tips to innovate without breaking the bank or spinning too many resources.

1. Nurture an innovation mindset with your team

Innovation starts with your team. Cultivating an innovation mindset among your team members is the first step toward achieving small wins that lead to breakthroughs. As someone who has led product development teams for over 20 years, I know that the ability and willingness to analyze the environment, listen to feedback, and adapt to change are key disciplines to delivering products that delight customers. Here are some key aspects to consider:

Embrace diverse perspectives: Different backgrounds and experiences bring unique viewpoints that can spark creativity and improve collaboration within your organization. Where you can, build diversity into your hiring strategy.

Foster a culture of openness: Create an atmosphere where employees feel safe to share their ideas and insights freely. Make them feel that their opinions matter and that they have a stake in the company's success. You can do this with monthly brainstorm sessions to get the whole team thinking about different challenges faced by the business.

Promote continuous learning: Encourage ongoing learning and skills development. There are lots of free online training resources that help employees stay updated on industry trends and emerging technologies.

By nurturing an innovation mindset within your team, you can tap into their collective creativity, which can lead to cost-effective innovations that drive your business forward.

2. Listen to your customers and innovate for them

Research from McKinsey & Company has shown that improving the client experience can increase sales revenues by 2%–7%. However, one common pitfall in innovation is over-engineering solutions that don't align with your customers' needs. Prioritize innovation that is rooted in customer feedback, provides value, and aligns with business goals, and is measurable. Here are a few ways you can build trust with your customers and serve as a pipeline to fuel innovation:

Provide multi-channel support: For customers who still need help after navigating your educational resources, offer support across the platforms that matter to them — such as email, social media, SMS, in-app support and more. Leverage tech-enabled tools, such as finance software that offers free phone and chat support with live agents. This meets your customers where they are, letting them reach you in a way they find comfortable and convenient.

Deliver a personalized customer experience with AI tools: Chatbots make a particularly helpful AI-powered customer support tool. A chatbot can respond to customers in real time, offering additional information about your products or services or even fielding customer service questions. AI-powered marketing tools can be used for content creation, social media management, and more. Chatbots and other AI tools can do more than just answer customer inquiries about your products. The best AI tools can adapt and learn from customer behavior.

Cascade the outside, inside: Often customer feedback does not go beyond the customer support team. To help drive more organic innovation, enable regular touch points between team members who face customers and team members who are on the front lines of innovation.

By keeping your customers' needs at the forefront of your innovation efforts, you can ensure your new ideas are well-targeted.

3. Ensure your tech tools help you move the business forward

Efficiency is a cornerstone of cost-effective innovation. Leveraging technology to automate manual tasks lets you accomplish more in less time, freeing up valuable staff time to focus on strategic and creative thinking. You want to work with technology partners that can help you customize tools to meet the needs of your business and facilitate integration. Remember that innovation can come from anywhere in your business so keep your automation goals broad. Here's how some small businesses have found solutions that make an impact:

Automate financial operations: Using technology to eliminate manual activities, such as invoicing, bill payments and financial reporting, helps you streamline operations and reduce human error. It also helps you get back to focusing on what matters to you, your business. Finding a solution that pre-populates invoice information can save business owners, on average, 50% of time on bill pay alone. One of BILL’s customers, Ascent Respiratory Care, a home health care provider that helps patients with respiratory issues, eliminated writing paper checks entirely. “We do not write checks anymore. I would say about 95% of what we do is all paid out via BILL, whether it's a hard copy check or an electronic payment,” said Ascent Respiratory Care Senior Business Development Associate Heather Thompson.

Use data analysis to uncover business insights more easily: Solutions that bring efficiency and optimization to your business can provide valuable analytics that can uncover insights to fuel innovation, inform your decision-making and identify areas for improvement. Golf Genius has seen firsthand how financial analytics has provided better control, visibility and efficiency. “I believe we’re saving thousands of dollars a quarter as a result of real-time budget tracking. Before [BILL], people would ask where they were against their budgets, and now we know,” says Golf Genius CFO, Lou Lombardo.

By harnessing technology to optimize key foundational parts of your business operations, you can achieve cost savings and efficiency gains that contribute to your overall business innovation. For example, BILL’s Financial Operations Platform for SMBs allows businesses to manage and optimize their cash flow all on one platform, delivering the most comprehensive suite of capabilities for SMBs.

4. Don't be afraid to fail forward

Innovation is inherently risky, and not every idea will yield immediate success. However, the more efficient and automated some functions or processes are, the more a small business can embrace a culture of "failing forward," where failure is viewed as a learning opportunity rather than a setback. It will help employees have the space and time to be more creative or innovative. Here's how to do it:

Encourage experimentation: As product leaders, oftentimes we tell our peers: “If experiments aren't failing often, then you are not experimenting enough”. Encourage your team to experiment with new ideas and approaches, even if they come with a degree of uncertainty. Build in time to test-run the idea, with an evaluation checkpoint, before implementing it system-wide.

Iterate and refine: After an experiment, assess what worked and what didn't. Use these insights to refine your approach and try again.

Acknowledge lessons learned from failures: Celebrate the lessons learned from failures. This will encourage a culture where innovation is valued regardless of the outcome, giving business owners a competitive edge and supporting employee retention.

Remember that many groundbreaking innovations have emerged from a series of trial and error. By embracing failure as a stepping stone to success, your small business can take actionable steps toward building a culture that promotes creative thinking, and develop innovative solutions without a big investment.

In conclusion, innovation isn't solely reserved for large corporations with deep pockets. Small businesses can thrive in today's competitive landscape by adopting an innovation mindset, listening to customers, harnessing technology to optimize and adapt to market shifts, and being unafraid to experiment and learn from failures. With the right strategies and a commitment to cost-effective innovation, your small business can stay ahead of the curve.

At BILL, we’re 100% focused on helping SMBs to get more control, visibility, and efficiency in their business. Automating financial operations can be a game changer for your business, saving valuable team time on inefficient manual processes and focusing on high-value strategic tasks instead. BILL helps businesses thrive with technology that is powerful, secure, and easy to integrate and use. To learn more, visit Bill.com/Resources.