How To Kickstart Small Business Innovation

Small business innovation is vital

business teammates brainstorm ideas on white board

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Innovation is crucial for small businesses. Innovation makes businesses competitive, and it helps them better seize business opportunities they encounter.

It's important to encourage innovation in your small business, but how? Here are some ideas for how you can innovate at your company.

Key Takeaways

  • Innovation doesn't have to be complex, but you do have to spend time, energy, and money on the effort.
  • Include customers and suppliers in your innovation process by sending out surveys.
  • When possible, look for ways the government might assist innovation in small businesses, such as through loans or tax credits.

Realize That Innovation Can Be Simple

We tend to think of innovation as a formal and complicated process, but it doesn't have to be. Innovation is just a fancy word for improvement and invention. For example, when you come up with better packaging, find a supplier who will give you a better rate, or try out a new marketing idea, you are involved in innovation.

Build Innovation Into Your Business Routines

Innovation won't just happen. You need to dedicate time and effort toward innovative projects. There are a few strategies you can use to ensure you take the time to innovate. You could set aside an hour each week to think and exercise your creativity.

On a larger scale, you can build innovation into your business planning by setting goals that focus on improving products and processes. For example, one of your business goals might be to find and try out a new way to communicate with your customers.


Create an innovation action plan to implement your innovation goals.

Actively Solicit Suggestions for Improvement of Your Small Business's Processes and Products

You'll need to use both formal and informal methods to get customers to make suggestions for innovation. For example, you could use questionnaires, surveys, or casual one-on-one conversations.

You should also talk to your suppliers and see what suggestions they might have.

Involve Staff in the Innovation Process

Include your staff to draw from a larger talent pool and keep your employees engaged. Here are a few ideas for how to bring your staff into the conversation:

  • Make problem-solving a part of every staff meeting
  • Have a suggestion box
  • Reward staff for suggestions that are followed through on
  • Talk to staff impromptu—get out of your office and personally visit with staff
  • Provide creativity/innovation workshops for staff


For example, at each meeting, you might ask a discussion question on a specific product or process. Ask, "How can we improve this product/process?" Publicize the topic of discussion a week ahead of time so people have time to think about it.

Invest in Innovation

Innovation isn't free. You'll need to invest in technology that improves your business operations and make your company more competitive. Information and communications technology are particularly worthwhile.

You'll also need to spend money updating machinery and equipment that will allow you to make productivity improvements. The same goes for new products and services.

Cultivate an Innovation Mindset

Continue to educate yourself about innovation by attending workshops, webinars, and conferences. Keep up with relevant blogs and other media. This will help you stay on top of developments in your industry, including any technological advancements that could improve your efficiency.


If you haven't yet, join at least one professional or industry organization. This will allow you to meet other innovative people in your industry at meetings and events.

Look for Special Programs Designed To Help

Some government programs assist innovative companies. For example, the Canadian government strongly supports Scientific Research and Experimental Development (SR&ED) through the SR&ED tax credit program. Canadian companies can get reimbursed for research and development projects in the form of tax credits. The size of your business doesn't matter—you only need to ensure that you're using the money for qualified research and development.

Work Hard

It's not enough to say that innovation is a priority; you have to actually work at it.

Mechanical Engineer and VMAc co-founder Jim Hogan puts it this way; "I've developed my own philosophy about innovation. It may sound corny, but you have to think you're smart and try things. If you don't, your competitors eventually will. The prize goes to the people with the guts to try"

Frequently Asked Questions (FAQs)

Why are small businesses more innovative than big companies?

Small businesses aren't necessarily more innovative than big businesses, but their smaller size can allow them to be more nimble. Large corporations with complex operations have to account for many different factors whenever they consider making a change, whereas a small company might be able to pivot to a new strategy overnight.

What are innovative ways for startup businesses to find funding?

In the U.S., the Small Business Administration has many resources to help startups find funding. Among those resources, the SBA supports loan programs, including specialized loans for startups.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Government of Canada. "Find Out If You Can Claim the SR&ED Investment Tax Credit."

  2. Small Business Administration. "Loans."

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