A focus on innovation is a focus on the future of your work. A recent Commonwealth Bank report suggests that Australian businesses investing in innovation are the future of the national economy. The Regional Business Insights Report 2017 states that 50 per cent of regional businesses are already actively innovating, and these businesses have generated $19 billion of economic activity around the country.
If all regional businesses in Australia invested equally in innovative ideas or solutions, and achieved the same returns of approximately $279,000, the national sector could grow by $44 billion. The initial investment is the driving force behind the growth, and if your business doesn't have the required working capital or cashflow, you could struggle to keep pace with your competitors.
Why invest in innovation?
Investing in innovation is investing in the future.
Investing in innovation is investing in the future. It's all about coming up with new and creative solutions to problems that you're struggling to overcome. You might have a manufacturing business that's seeing overheads rise and profit margins fall. To get around this problem, the innovative solution might be to install robotic manufacturing tools in your factory, reducing the need for human labour and thus lowering your overheads. Of course, that investment in robotics is expensive, but that's where debtor finance is so useful.
"They're encouraging people to challenge the status quo and expecting them to come up with creative ideas, and by doing this, many regional operators are unleashing the innovation potential of their teams," stated CommBank Executive General Manager of Regional and Agribusiness Banking Grant Cairns in a statement, as reported by SmartCompany on March 31.
"Mastering innovation means making creativity and experimentation an essential part of your business' DNA, rather than a one-off process improvement drive or product development program."
Forking out money for an innovative process or solution might not completely change your business, or even your bottom line, but continued investment will change your "business' DNA", resulting in continuing change and improvement.
Who is innovating?
You might think that most of the innovation around Australian businesses is happening in the cities - that's not the case, as seen in the CommBank report. Instead, the regional businesses are driving the innovation, with 49 per cent innovating, compared to just 43 per cent of metropolitan businesses doing so.
Any business that innovates in more than one area, however, has a much higher chance of increasing revenue.
There are many benefits to innovating, including increasing revenue. For businesses that innovate in just one area of their operations, 59 per cent will experience an increase in revenue, 35 per cent will see no change and 6 per cent will see a decrease. Any business that innovates in more than one area, however, has a much higher chance of increasing revenue (76 per cent), with 22 per cent experiencing no change and only 2 per cent decreasing revenue.
What's more is the overall benefit to the Australian economy. As previously mentioned, if every regional business in Australia invested the same amount of capital in innovation, they would provide a $44 billion boost to the economy. If every metro business in the country did the same, the benefit to the economy would be $171 billion! Of course, it requires some upfront expenditure, but the stronger economy could pay that back.
For regional businesses, the average return on investment is $279,000, but for metro businesses, this is again significantly greater, at $460,000. When business operations stall or profit margins start on a worrying downward spiral, innovating might be your only solution. For farming businesses, examples of innovation could be using the cloud for greater control over your stock, or using autonomous vehicles to do work around crops and fields.
Debtor finance through Earlypay can help you to realise your innovation dreams by providing you with sufficient capital to invest as you see fit. No more waiting around for your unpaid invoices - instead, have the funds paid direct to your account within 24 hours and start using the money to improve your business (and maybe even help the Australian economy). For more information, get in touch with Earlypay today.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].