Surviving your first year in business during a recession (part 3) - Marketing strategy consultant and agency, Newcastle - STO Consulting

Surviving your first year in business during a recession (part 3)

Welcome to the third and (for now) final part of my business start-up series. This one is about innovation, product development and whether or not these have anything to do with marketing. Read part 1 on why start-ups are a key part of economic recovery and part 2 on how start-ups can be better supported.

The importance of innovation

Innovation is vital to all businesses in the long term. We have seen many businesses that were previously very secure in stable markets fall rapidly. The video rental market and the entertainment retail industry provide well publicised recent examples. Some companies have adapted and survived; some have not.

Innovation however is not the key to everything and it is not an alternative to other ways of doing business. I’d much rather have an effective offering than one that was celebrated for being ‘innovative’. In any case, it’s the customer’s opinion that really matters.

In the early stages of doing business, it’s much more about focus and relationship building and this means selecting the right idea upon which the company’s long-term reputation is likely to be built. If you get these fundamentals right then you can build an innovative approach to your operations.

Getting the product / service right

This is a dilemma that has never been more critical: The risk at one end of the scale is spending too much time in R&D at the expense of earning revenue. At the other end is the equally catastrophic potential of pushing something out to the market that is not entirely suitable. It would be naïve to think that customers had the patience to wait for improved versions rather than going elsewhere, or that the reputational damage could be undone. For a start-up, this risk is heightened because of cash flow and because they don’t have alternatives to fall back on. Like many things in marketing, the solution is more about judgement than it is exact calculation. I would argue that a business owner should be empowered and allowed to chart their own course and also that a level of control can be exerted by having access to reliable information and a structured process of consideration.

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