Innovation

Jun 27 2006 By Evening Gazette

The successful exploitation of new ideas is crucial to a business being able to improve its processes, bring new and improved products and services to market, improve its efficiency and, most importantly, improve its profitability.

* Marketplaces - whether local, regional, national or global - are becoming highly competitive, reflecting the ability of companies to access new technologies and further heightened by the power of trading and obtaining knowledge through the Internet.

* This guide explains how you can adopt innovation as a key business process and outlines the different approaches you can take. It also gives you advice on planning for innovation and creating a business environment that nurtures innovative ideas.

The business case for innovation

* It is important to differentiate between invention and innovation. Invention is a new idea. Innovation is the commercial application and successful exploitation of the idea.

* Fundamentally, innovation means introducing something new into your business.

This may take the form of:

- Improving or replacing business processes to yield higher efficiency and productivity, or to enable the business to extend the range or quality of existing products and/or services

- developing new and improved products and services - often to meet rapidly changing customer or consumer demands or needs

- adding value to existing products, services or markets to differentiate the business from its competitors and increase the perceived value to the customers and markets

* Innovation can be a major breakthrough - totally new products or services. But it can also be a small, incremental change.

* Whatever form it takes, innovation is a creative process. The ideas may come from inside the business, from the employees and managers.

* Research & Development - or from suppliers, customers, researching the market, links with universities and other sources of new technologies.

Identify opportunities for innovation

* You can identify opportunities for innovation by adapting your product or service to the way your marketplace is changing. For example, if you're a specialist hamburger manufacturer, you might consider lowering the fat content in your burgers to appeal to the increasingly health-conscious consumer.

* You can also innovate in your business by identifying a completely new product. For example, you could start producing a vegetarian burger as well as a meat one.

* You could innovate by introducing new technology, techniques or working practices - perhaps using better processes to give a more consistent quality of product.

Planning innovation

* Innovation must be planned and integrated as part of your business strategy.

* Some ideas may just come out of the blue to you, but, you also need to have a strategic vision of how you want your business to develop. You can then focus your innovative efforts on the most important areas.

* Start by considering all aspects of your marketplace. You should:

- look closely at your competition

- study trends reports

- have a strong relationship with your customers

- involve your suppliers and other business partners

- follow news in your sector, including reports in trade and professional magazines

* Think carefully about what you could do to improve your position in your market.

* You need to consider how you can offer your customers added value and better exploit your strengths.

* Consider what a particular innovative step could mean for your business.

* Ask yourself:

- what impact it will have on your business processes and practices

- what extra training your staff may require

- what extra resources you may need

- how you'll finance the innovative work

- whether you'll be creating any intellectual property that will need protecting

Finally, you should include your vision in your business plan. Put down your goals, both long and short-term, and detail how you intend to achieve them. Link them to financial targets, such as achieving a specific turnover by a set date.

Funding innovation

There are a number of ways you can fund your growth through innovation.

* You could finance innovation using your own funds, or external funding such as loans or equity finance. Some government grants are also available for innovative businesses.

* If you approach your bank for a loan, you'll need a well thought-out business plan.

* If you are willing to relinquish some control of your business you may be able to attract investment from business angels - wealthy individuals who invest in private companies, typically £10,000 to £250,000.

* Venture capital firms provide higher levels of investment, from around £3m upwards, in return for shares in the business.

Grants

There are a number of grants that may help finance part of your project.

* Regional Development Agencies also actively fund innovation. The amount of funding available varies from region to region.

* Many of these agencies focus on certain industry sectors, often benefiting from historical links to their area.

* Businesses can claim tax relief and credits on appropriate research and development spending.

Business Link has access to a wide range of expertise and can work with you to build an understanding of your business. We can source the most relevant assistance and, if appropriate, help with the identification of funding, to ensure you achieve your business goals.

Call Business Link now on 0845 600 9 006 or email info@tees.businesslink.co.uk or alternatively visit www.businesslink.gov.uk to see how you can get the most from your business.