Overuse of the Word Innovation

Innovation.  Everyone is talking about it.  Everyone seems to know they need to innovate.  And everyone seems to try to sell their innovation as a marketing pitch. 

But the word “innovation" has become an over used buzz word.  Even the president of the United States talked about small business innovation in one of his State of the Union addresses.  

The problem is that the true meaning of the word has been lost because of the overuse of the word innovation.

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The Importance of Innovation in Business

I love small businesses - I advise them and have started a couple of them - but I have to admit, owning a business today is harder than ever before.  

A successful business recipe used to consist of the following:

     hard work + a fair price + good customer service = successful business

Now, that recipe is no longer enough.  Today, we need...

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3 Ways to Hack Your Business Today

Change is never easy.  But change is essential to keeping up with the competition.  Especially for small businesses who must compete against the economies of scale of large corporations.  Change doesn't have to be a major production or significant undertaking with months of planning and the use of major resources - change can be accomplished through business hacking.

Business hacks are the micro-elements of innovation and strategy.  When added together piece by piece, business hacks can provide for a large, substantial change.  Just like a marathon is run one step at a time.  The following are three ways to quickly hack your business today:

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Target's Business Model

Walmart leads the world as the largest and most powerful retailer.  Their big box stores offer low prices and a large selection to their customers who line up to take advantage of the savings.  As I explained in a recent post, Walmart has been able to offer such low prices due to their economies of scale. But it has come at an expense; their customer service is often nonexistent.  And this provides an opportunity for other businesses to gain a strong market share in Walmart's shadow.  One of these businesses is Target.

In this article, I am going to dissect Target's business model focus of customer service and how they have found a competitive advantage to compete with Walmart without (completely) slashing their prices.

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Economy of Scale Example: How to Compete

Competing in the age of big box stores can be overwhelming.  "Mom and Pop" stores have been run out of business by huge corporations like Walmart, Home Depot, Kroger, and yes, even Amazon.  Yet, many consumers want to "shop local" and support business owners.  But how can a small business compete with the big box giants of today?  By applying strategic innovations to their businesses.

But first, we must understand why it is important to have an awareness of economies of scale.

I first learned of the concept of "economies of scale" in my high school business class.  It was explained to me in basic terms that big businesses gain efficiencies from being large that make it difficult for small businesses to compete.  While economies of scale include things like a knowledge base, expertise, distribution, partners, and advertising, one of the biggest challenges small business owners have in competing with giant retailers is price.

Several years ago, a friend of mine owned a game store where they sold all types of games, both common and unique.  He was able to dig into a niche market and were experiencing success.

At the time, the game "Apples to Apples" was brand new and building momentum.  My friend started offering this game early on before

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How to Design a Business Model

I recently met a fantastic artist.  Scott Stearman is a sculptor who specializes in bronze work, such as life-size statues and memorials.  The process he goes through to create the end product truly is amazing.  Long story short, Scott actually starts his process with a very small clay model.  This model is then magnified and processed to create a mold for the bronze, which is then finished.  The part of this process that I found most intriguing is that the large finished product is being made from a very small model.  This means that any errors that are made on the model are magnified multiple times when it is enlarged to create the bronze mold.  Having a half inch error on a model can result in a four inch error when the model is magnified to become eight times larger.  

I have found that the same is true with a business model.  If a business does not fully refine their strategy on the small scale, it becomes magnified as the business grows.  This is not always a bad thing, but how much more effective could a business be by being intentional?  If a business model is not intentionally designed, the business will ultimately default on a business model that may, or may not be the most effective model for the business.

Regardless of the size of a business, any business owner can be intentional about the design of their business model by refining four strategies.

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