What Innovation Means to Small and Family Owned Business

Ken Maisch

Ken Maisch, TechSolve

Innovation distinguishes between a leader and a follower.
- Steve Jobs

Lately, innovation has become a buzz word.  While most of us associate it with new technology breakthroughs such as self-driving cars, what happens to businesses with more modest and practical services? Can a small, family owned business find ways to innovate without a billion dollar research and design budget?  

The truth is that small businesses, and particularly family owned businesses, are the core of America’s economy. Subsequently it could be argued that innovation is more important among small and family owned businesses than any other market.

Innovation is a vital function for small business to avoid being commoditized or defeated by larger chain organizations. Business leaders of small firms must:

  1. Find new ways to better their customer service model
  2. Revise the way they manage their supply chain, and
  3. Do whatever they can to eliminate unnecessary costs in order to stay competitive.

Speed and Relationships

For small and family owned businesses, innovation starts by taking a look at the basic structure of your business. What is working now?  Will it work in the future?  What needs to be changed?  

A previous generation may have started the business many years ago on a 1935 business model, but the market has changed drastically.   Fifty years ago the closest thing to LinkedIn was the local barber shop.  Now the methods for reaching customers have radically changed.  The business universe has become vast due to the internet and social media.  While this presents a challenge, it also presents an opportunity to find new and innovative ways to reach your customer base.  The 21st century consumer operates at lightning speed and expects immediate gratification.  Innovation could mean finding a way to respond to and correct customer problems faster.  This may be a key factor in establishing those loyal customers who make family businesses so successful.

For decades, business loyalty has been about bricks and mortar.   Everyone had their favorite restaurant or grocery store that they frequented for comfort and familiarity.  This type of loyalty has dramatically dissipated. Family owned grocery stores have to come up with significant value added reasons why consumers should choose them, because it is impossible to be competitive to the prices of the big chains.  In this case maybe innovation is unmatched customer service or the convenient online shopping or rewards programs.  Innovation and differentiation can be the difference between success and failure.


Taking over a family business after a parent’s retirement can be tricky. Many of the business’s core customers and contacts may be aging as well, and the people replacing them may not have the same kind of sentimental attachment to the company or service that their predecessors did. How can a traditional business change or innovate to ensure continued growth? As the younger generation transitions into leadership roles, they must find a way to add value to a whole new market of consumers.  The widget that Dad has sold successfully for years is tried and true, so why not find a new market to sell it to?  Innovation can be as simple as making what you already do relevant to a new set of customers.


There is a fine line between becoming an expert in an industry and becoming commoditized.  While it’s important to have expertise, it can be easy to get cornered into a tightly niche market. Market and customer diversification is innovation that can mean growth for a small business.  Target and “own” a specific customer segment. Look inward and “own” a distinguishing business attribute – “own” the highest quality, or the most convenient or the fastest turnaround etc… choose a relevant differentiator and “own” it.

It is clear that businesses can’t afford NOT to innovate.  The time to make fundamental changes from top to bottom is now.