Creativity and innovating is critical for businesses, irrespective of their size, to achieve sustained growth. SMEs often misinterpret innovation as being relevant only to large and established businesses. This mindset becomes an impediment for these SMEs to innovate, thus standing in the way of their own growth. Lack of innovation and its effective implementation prevents them from adding value to their business and gaining enterprise level expertise.
What gives SMEs a definite edge over large organisations in terms of its ability to innovate is that the former does not have a rigid work structure and business procedures that are typical to big businesses. This gives SMEs the scope to keep their operations flexible, enabling them to innovate. Organisations offering business funding without collaterals to SMEs encourage them to be creative without being restricted by financial constraints. SMEs in India that innovate have higher survival rates as they possess the ability to adapt and manoeuvre through challenging market conditions by reviewing their strategies to suit the demands of the situation.
Innovation starts right from understanding the ever-changing preferences and demands of the target audience and improving operational efficiencies. It serves as a motivation for innovative strategies that would help business to reach out to their audiences better and differentiating themselves from their competitors through unique products and services. According to the ancient Chinese scholar, Lao Tzu, “The journey of a thousand miles begins with one step”, and for businesses that “one step” is innovation.
A 2013 report on innovation by PwC states than SMEs who have embraced technology have witnessed increased revenue generation 15% faster and an increased creation of jobs by two times. The report also indicates that new technological advancements like cloud computing, mobile communication and social media are offering SMEs the ability to streamline their business processes, a benefit that was accessible only to large organisations previously. The PwC survey also reports that businesses need to have an innovative strategy in place for effective implementation of business processes. A whopping 79% of enterprising businesses were found to follow a well thought-out strategy.
SMEs in India can follow three different paths to innovate:
- Introduce improvements in their existing products or services to differentiate themselves from their competitors or create new products or services to target new markets
- Implement new ideas in the design of the supply chain to reduce the base cost of the business, that is, innovate with logistics strategies to enable suppliers to deliver products and services faster and at a lesser cost
- Innovating with the company interface for its consumers and suppliers to enhance the demand-and-supply match, which enables the business to offer value to their customers and in turn ensure business growth
Apart from technological advancements that help SMEs to innovate, organisations offering unsecured business loans to SMEs are further helping them to overcome the financial challenges that they often face during their growing years. Small and medium-sized businesses can now avail unsecured business loans online and make the most of the array of the SME-friendly benefits that these loans offer.