Every business needs to stay fresh to be competitive. This may mean regularly refreshing your products or services, taking them to new markets or even coming up with an entirely new offer. Simon Wicks looks at how to identify opportunities for innovation
Innovation is at the heart of every viable business idea, but "new" can quickly lose its gloss in a competitive marketplace. Rivals will waste no time improving on your offer, and customer expectations will rise accordingly. If you don't keep up with the market, someone else will.
"If you sit on your laurels, there's a risk your customers will move away from you," warns John Fitzgerald, chief executive of entrepreneur-support organisation BRAVE. "You could have a perfectly good product or service, but your customers may have become more demanding or there may be new competitors in the market. Good companies keep an eye on what's changing in their environment."
Listen to your customers
"Any small business needs to look for trends in its customers," Fitzgerald says. "What are they thinking? Are their expectations changing? If your clients are drifting away, you run the risk of waking up and finding they've gone.
"But if you listen to your customers, you find out whether they may be thinking of leaving and give yourself time to do something about it," he continues. "Don't allow the day-to-day to get in the way - put time aside to talk to your customers, and not just your favourite ones either."
Watch your competitors
Knowing your competitors' strengths will help you identify gaps in your offer. Knowing their weaknesses will help you identify gaps in theirs, and could highlight needs in the market that are not currently being met. Mystery shopping is one way of finding out about rivals, as is attending trade shows. But your customers are likely to be the most valuable source of information.
"Ask them 'What makes you stay with this competitor?'," advises Fitzgerald. "Is there an opportunity in that for you? For example, if you offer a higher standard of service, maybe that gives you a new unique selling point. Look for weaknesses in your competitors and use that information to win new clients and keep your existing customers."
Keep up with legislation
New laws steer businesses in new directions and may even open up new markets; environmental regulations, for instance, have generated an industry dedicated to helping firms reduce their environmental impact.
"Keep an eye on the Government changing the landscape," Fitzgerald says. "A lot of companies don't keep up with legislation and this costs them opportunities."
You can also learn from the way other sectors do business and, if appropriate, bring their approach into your own firm. "The most important thing is to give yourself time," he concludes. "The earlier you see a problem, the easier it is to adapt before anyone else."