When it comes to growing your business, innovation is the name of the game.
While more than 40% of Australian executives indicated in a recent report they believe SMEs and startups are driving innovation in Australia, finding new business ideas is not necessarily straightforward, let alone easy.
So where do you find new business ideas? And does innovation need to be a formal, documented process or can a more casual approach work?
The companies in the 2014 Smart50 have more than a few runs on the board when it comes to innovation and so we asked them how they generate new business ideas.
Here’s seven ways to find new business ideas.
1. Ask your team
Almost all of the companies in this year’s Smart50 said their own employees are one of the best sources of new business ideas.
Smart50 winner Pet Circle has a combination of formal and informal mechanisms for staff to contribute ideas.
“At Pet Circle we believe ideas can come from anywhere within the business,” says founder Mike Frizell.
“Our monthly all-staff session is held in our casual meeting space and key business updates are shared with staff and feedback and ideas are encouraged.
“We also run a more formal customer-facing prioritisation meeting on a weekly basis. At this session, proposals are presented to the management team and are prioritised. This prioritisation process is designed to ensure we are focused on delivering a benefit to the consumer and allows us to effectively allocate our available resources.”
But other companies take a more laid-back approach, like drinks manufacturer Capi Sparkling, where founder Pitzy Folks says all new ideas are developed over lunch.
“Lunch at the office by our chef is how we do every part of the business,” Folk says.
“We do not have a hierarchy but run more like a board to come together with ideas and thoughts.”
2. Pick your clients’ brains
What would be the one thing that would make a difference to your client? Find a way to satisfy that need and you’ll have a new business idea, as well as one happy customer on your hands.
At Key Person of Influence, co-founder Glen Carlson says new business opportunities come from knowing the business’ clients well.
“We talk to them, go on ski trips with them, drink wine with them and discover what drives them and what’s getting in the way of them getting what they want,” Carlson says.
“If we are excited about solving those issues, we go into brainstorm overdrive and start producing our next product or service.”
Edward Lakman, founder of online sunglasses retailer iframes, is also a firm believer in listening to customers to develop his business.
“They tell us what they want, whether it be more types of frames, more brands, more colour, more sizes, what the latest trends in sunglasses are, which celebrities are wearing what,” he says.
3. Brainstorm, brainstorm, and brainstorm again!
For online retailer Showpo, it’s hard to go past an old-fashioned brainstorming session to generate new business ideas.
“We take a day a month to brainstorm and discuss ideas,” says founder Jane Lu.
The team behind Vinomofo also nominate brainstorming as among their key idea generation techniques.
“With over 40 staff, Justin and I now work on the business, not in the business,” says co-founder Andre Eikmeier. “The machine turns without us so we’re always living in the growth space.
“We spend at least a third of our week in a room, brainstorming or problem solving. We analyse everything and we listen to everyone – customers, suppliers, our team. We’re always looking to how to provide a better experience, not just for customers, but for our suppliers and for our team.”
Wealth Enhancers also allocates time just for creating new ideas – even handing out awards to staff for improvements and innovations within the business.
“Each meeting has some form of problem-solving or brainstorming within it and we continually run what we call ‘innovation projects’ across areas of the business that need to be improved or where an opportunity has been identified,” says co-founder Sarah Riegelhuth.
“At our quarterly planning days and annual retreats we dedicate about 40% of the time to creative thinking, brainstorming and problem solving, and have created a series of fun exercises we use to achieve this.”
4. Be an information gatherer
Our Smart50 stars are ferocious information gatherers and they suggest reading business books, going to conferences and signing up to industry newsletters – just like SmartCompany!
“We sign up to every industry e-newsletter, attend online retailer conferences, talk to other people in the industry, workshop ideas with our team, read books and articles, go to trade fairs around the world and look to other websites, locally and internationally, that we admire,” says Erica Stewart, co-founder of online retailer Hard to Find.
“We’ve found that every conversation leads to something, so we try to say ‘yes’ to as many meetings as we can – it’s amazing how many pearls of wisdom we’ve gained just by having a chat!”
GMG Search Engine Optimisation takes a slightly different approach, choosing instead to encourage employees to learn as much as they can and then bring that learning to work.
“To truly tap into the potential of all our employees, we encourage them to educate themselves not only on our industry, but in whatever interests them,” says co-founder Nick Grinberg.
“We attend conferences and seminars, and often sponsor guest speakers in the office. We believe consistent education, approached from various perspectives, will enable the most successful creative collaboration.”
5. Check out what the others are doing
Watching what your competitors are doing and then trying to do it better can also give your business an edge.
“When time prevails, we research other businesses in similar and different fields,” says Terry Baker, co-founder of professional services provider MBS Services.
“We take note of what processes appear to be behind their success and see if it can be replicated in our business.”
6. Look at your data
One form of innovation currently receiving attention is data-driven innovation; that is, using insights from data to solve problems, boost efficiency and create better products. A recent report from PwC estimated this kind of innovation generated an estimate $67 billion in new value to the Australian economy in 2013 alone.
So how can SMEs get a piece of the action? By taking a leaf out of Punters.com.au’s book and looking more closely at existing sources of data within your business.
“We listen to feedback as much as humanly possible, even I am active on the forums, often reading posts or Facebook comments regarding website improvements or feature suggestions,” says founder Luc Pettett.
“We also watch a lot of US or UK-based sporting websites or news websites as you learn a lot from those markets as they are far more saturated than ours.”
7. Expand your horizons
Finally, what better way to discover new ideas than immersing yourself in a totally different environment, in a different city or country?
For Oz Trampolines, regular overseas trips are essential for generating new ideas.
“We are constantly looking at overseas companies, visiting China three or four times a year and going to new factories to see if they have any different ideas,” says founder Richard Haby.
“It is also looking outside the industry to see what the trends are in customer service, commerce and social media.”