Much has been written in the UK press about the role that Britain’s SMEs will play to lead the country out of its economic doom. We know that as a result a number of initiatives have been set up to assist UK SMEs with their business growth.
A recent UK government survey found that three quarters of the nation’s small businesses were intending to grow over the next three years, while some 47 per cent of SMEs had significantly increased the number of new products or services they were presently offering. Clearly we trust in SMEs to stimulate the UK economy, and need them to remain innovative and deliver growth and success.
Innovation often forms the core of a new business. You need only watch an episode of Dragon’s Den or The Apprentice to experience the breadth of ideas behind the UK’s entrepreneurs. The early years of a business often provide the most freedom to experiment with innovation and the opportunity to still change the direction of the business.
An original business strategy might easily not run according to plan, and we realise that we’d rather pursue another avenue in order for the company to blossom. The main aim is to offer something original that will look to fulfil a gap in the market. As a result, many smaller companies focus on remaining agile enough to adapt to changing marketplace demands. But as the business matures these opportunities become more problematic to seize, if only due to uncertainty that deviating from the initial business blueprint is truly the best course of action.
The decision to shift direction may pay off for smaller companies. It certainly did for us. Evolving our business has been at the roots of Limited Space from its early years when the decision was taken to significantly change the direction of the business. Following extensive research we identified the media potential within the retail environment and decided to move the focus of the company and its products away from display in car parks – the company’s starting point and where it saw modest success – and into the shopping mall arena. The decision to alter our focus paid off and Limited Space began to rapidly expand into a network of 82 UK malls, delivering an advertising audience of over 50m shoppers every two weeks.
Making the initial decision was easier by undertaking the market research to prove the opportunity was solid, but it can still be worrying for SMEs to veer away from the initial business course. However, constantly reassessing that the business is on the right track has become a fundamental part of how we have sustained our growth even during recessional times, which have hit our sector, advertising sales, hard.
After continued growth in the following years, like many SMEs we put a significant focus on innovating to keep us fresh and help to keep us distinct from other, much larger, players in the marketplace. This focus on constantly innovating can bring its own challenges and is a frequent speedbump for smaller companies who may not have the staff or revenue to devote to business development. In 2010, we sought to grow our revenue through expansion of the network, but in ways other than acquiring new contracts.
With three established products already in place it was important not to introduce an entirely new commodity to an already competitive market and one which could also end up cannibalising existing products. Instead, we looked at ways in which to complement the existing offering.
With the mall environment already very sophisticated it required a strong proposition to achieve this. The solution came as an extension to one of our existing offerings, Panoramic sites. We focused on developing a solution to support these large format, select sites, which proved to be unique ‘banner’ portrait formats hanging in central atriums of the mall. This solution complimented the existing sites and significantly added to the audience reach. Not only did it instantly start generating significant returns, it also attracted new advertisers.
While developing our offering, we also managed to make existing products more effective and generated additional value without drawing sales away from our other products – and delivered 72 per cent growth for that financial year.
The lesson here for SMEs facing the innovation challenge is to consider the avenues for development carefully – often it’s not necessary to reinvent the wheel, rather than looking to enhance services already on offer.
Taking a risk and changing the focus of a business or innovating an existing offering is essential on the road to continued success. While small businesses are nimble enough to endure experimental changes, undertaking such action for a company take guts and determination from founders to achieve a triumphant outcome. It’s important for the business to consider the impact of new developments on existing products and services. Essentially adding a sprinkle of bravery and a dash of insight can be the icing on the cake for any high-growth, mid-sized business.
Samantha Sida is the co-founder of Limited Space.