Innovate. Ask for outside advice. Have a solid plan. Hire the best, and build strong relationships with your key suppliers. It may all sound like common sense, but the Business Development Bank of Canada is suggesting more small businesses need to keep these five things in mind if they want to continue to grow in 2015 and beyond.
As Canada celebrates Small Business Week, the BDC has been holding a series of events, Webinars and social media campaigns aimed at disseminating the key recommendations of its latest report, The 5 Do’s and 5 Don’ts of Successful Businesses. It’s particularly interesting research, because the BDC has a unique insight into what can go right with a firm as well as what can go wrong. (The “don’ts,” in its report, for example, come from looking at 118 companies that required restructuring or other measures.)
Most of the really helpful, data, however, came from a survey of than 1,139 small businesses across the country. The results were organized by the most successful firms based on revenue, profit and employment over three years, and “all others” -- the SMBs that may need to catch up with their counterparts. Perhaps not surprisingly, use of technology and a focus on innovation were the first things that distinguished the best from the rest:
“Seven out of 10 of the most successful businesses reported that they were either first adopters or early adopters of new technology, compared to only half of all others,” the report says. “When asked specifically about the types of innovation they undertook, the most successful businesses reported that they innovated more than their counterparts when it came to making internal processes more efficient, developing new products and services, adapting their business model (e.g., developing new billing structures) and finding new marketing channels.”
While the numbers are relevant for any SMB in Canada today, the BDC acknowledges that some of the issues are perennial:
“Our findings echo, in part, those of a major Statistics Canada study published 20 years ago which found innovation to be the single most important factor that led to business success,” the report says. “While the business landscape has changed over time, the need to innovate has remained a constant.”
What’s changed, of course, is the growing sophistication of tools that can help SMBs know customers better and develop the kind of relationships that drive satisfaction and encourage loyalty. The availability of those tools has also changed, from expensive software that SMBs would have been reluctant to purchase and nervous to install to cost-effective, easy-to-use products that can be hosted online.
The BDC’s 38-page 5 Dos and 5 Don’ts of Successful Businesses is worth reading in its entirety, and could be the starting point for reconsidering how to approach technology and strategy for firms that want to continue growing. Innovation may always be something that gets lost amid all the other priorities SMBs have, but perhaps one purpose of Small Business Week could be to remind them about why it’s so important.