As we get ready for the final push of the end of year season – the busiest on the calendar for many South African SMEs, many business owners are contemplating the rapidly changing times.
The ongoing shifts happening in business landscapes seemingly leave no industry unaffected. But what does it all mean for SA’s SME owners, whose businesses are the biggest employer of our economy.
Entrepreneurs must be smarter and more strategic than ever about their market offerings, how to keep their hard-won niches and stay afloat. Many are planning around how to innovate to start 2024 on a strong footing, and get ahead of the curve, rather than play it safe.
But any innovation comes with risks, so SME’s must only pursue what makes sense for their business.
Selective use of resources is paramount. As an SME in a small market, you must carefully choose your innovation focus-areas. Though it’s a very natural entrepreneurial (and human) urge to diversify – to avoid putting all your proverbial eggs in one basket, as a business owner, it’s often more useful to stay laser-focused.
Understand your true targets by focussing on your customer’s needs. History’s greatest business ideas were borne out of solidarity with the consumer and empathy with their specific needs. Conduct in-depth market research and dive into your consumer data, and audience analytics. Craft a clear image of your ‘buyer persona’ and keep this in mind constantly as you strategise, ideate, and innovate.
Your ‘buyer-persona’ shouldn’t just be basic demographics like Male, 35 – 55 years old’. That gets you nowhere. On the other hand, “Harry is a devoted family man, in his 30’s. He loves authentic and vintage fashion, craft beer, and watches rugby religiously on weekends. He values honesty in the companies he supports and appreciates a bit of creative audacity in the messaging he receives,” is something you can work with.
Your buyer’s persona should be like a character in a novel; you know their likes and dislikes intimately, and you tap into their passions and inner drives. This also gives you a pathway to the sensitivity you need to avoid creating any unintended negative feelings with your marketing, because you understand the hypothetical buyers’ dislikes and pet peeves as well.
Brainstorm all your possible areas of innovation, and then relentlessly narrow down the list. Choose only those that resonate deeply with your hypothetical buyer, and the ones that best serve your business vision and goals.
Then out of those, select only the most feasible, profitable, and quickly actionable ones, for which you can see a clear way forward and identifiable stepping stones to get you there. If there are more good ideas, park them for the moment, you can always revisit them down the line if you need another iteration, but first go for the low-hanging fruits you’ve identified.
Once you’ve identified a key area in which to innovate, the real challenge comes next: striking a balance between profitability and customer-centricity as you innovate, pivot or bring new, differentiated offerings to the market.
The smartest business people realise that this isn’t a process of creating the product that we think customers want most, and then hope that they buy it.
A better approach turns this upside-down: It starts with putting yourself in your buyer persona’s shoes, walking a mile in them, and then asking yourself ‘what do I need?’ From there, you can better understand how your business might be able to solve for the issues they’re facing, fill the gap in their life, or supply to their needs.
After that, check up on the competition. Is there already a solution that’s very similar or in the same niche that you’re planning to move into? If so, go back to the drawing board and rethink your strategy.
Just like a journalist can’t cover an old story, there’s no use in putting resources into an idea if someone in the same market’s beaten you to it. To truly innovate you must break new ground.
The strategising around all this can get complex as you brainstorm on what innovations could work for you, and what the SWOTS are.
A great approach is to draw out a choice-map.
A choice-map is a bit like a school-style ‘mind-map’ but slightly more structured. With this technique you look at specific problems, like “What’s the best method for safely transporting donated organs?”, and then examining how in-domain contemporaries (like hospitals, in this example) have solved it, as well as out-of-domain, or other industries’ solutions, like food and technology companies cold-storage.
This method guides your thinking, keeps you on track and your business plans grounded.
Test permutations and configurations of your new innovations. Experiment with price points and solicit feedback. Make use of smart digital tech like integrated business cash flow management apps, to really zoom in on what’s working financially, and listen carefully to the responses you’re getting in questionnaires and surveys.
These insights will help guide your business moves, and help you plan as you prepare to launch new innovations for year-end, in 2024, and beyond.
