Startups are springing up every day and there is a high demand for
innovation. There are market needs and
customers are interested in the solution every business is bringing. Starting a business in a mediocre way is not the way to go these days. Brands struggle for relevance which is tied to how they are able to devise innovative ways to solve certain problems. This has increased the quest for innovation by startups.
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The challenge, however, is that in most cases, the resources needed to drive innovation are not available. At these points, what should startups do, especially small businesses that are planning to grow over time? There is the need to develop an innovation budget that will help fund this process.
Here are steps you can take as a
business owner to plan out your innovation budget.
This is definitely the first thing to do. Know the need you want to meet, the problem you want to solve and your prospective customers. This will enable you to know how to channel your finances, and most importantly, what to channel it to. Effectively carry out market research and document your findings, with set goals to achieve.
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Understand Your Competition
It is true that there are other brands or businesses that are solving the same or similar problems. It is important that you get to know what they are up to. This does not mean that you should lose focus on your own project and keep spying on them. It only means that you should keep tabs on them. Observe. Know what strategies they are implementing and work towards a budget that will improve on those strategies. Also, consider partnerships and useful collaborations where possible. Check out similar startups and companies that invest in them. Look for ways to partner with them. This will help you gain valuable connections to fund our own innovation budget.
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Align Your Innovation Strategy
Some companies fall into the trap of drafting innovation strategies that are different from their corporate strategy. Every business naturally has strategies for operational effectiveness, market penetration, scaling and otherwise. Their innovation strategies form just a part of their overall business strategy. It is only wise to sync these strategies to ensure that you are achieving a common goal. The innovation strategies should be aligned to the company’s corporate strategy. This will enable you to budget in the right places.
It is pertinent that you familiarize yourself with innovative business models and analyze the outcomes of their effective implementation. This is related to the first step of knowing your market. Determine who your customers are and whether they will buy or engage with your product/service. Numbers don’t lie. Project where you see your business and what impact it will be making. For instance, if you know your market share, you can budget what it will take to reach them.
Drafting an innovation budget does not mean you will need to break the bank. If that is the case, then there will be no banks in Nigeria. This is where the knowledge of what exactly you want to do comes in. Know the exact innovative step you want to take and make sure it is neither overestimated or underestimated. Ensure it is relevant to your market and that you will make profits in the long run.
Adequate planning is the way to go in any venture, innovation budgeting inclusive. Consider the necessary stakeholders, make collaborations and seek funding, you will only be one step to realizing that dream of yours as regards your business.
Featured Image Source: Harvard Business Review
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This article was first published on 19th October 2021
chidiogo-akaelu
Chidiogo Shalom Akaelu holds a degree in English and Literary Studies, from the University of Nigeria. She is a freelance writer, editor and founder of Loana Press, a budding online publishing outlet.
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