Harnessing Financial Support and Non-Financial Support To Stimulate Innovation in Businesses
Financial support is the bedrock of any business. Most businesses must always utilise the benefits of financial support in order to stay afloat. Is there any business that thrives without any financial support?
A lot do survive without it, but not for long. Finances pay the business bills and attract valuable products and services for businesses.
How does Financial Support Stimulate Innovation in Businesses?
Innovation fosters new perspectives in the development process and for a business to be able to stand out amongst its competitors or even become a reputable brand, it must invest financially to make it work. The development of a product or service usually starts with leveraging the minimum personal resources, and as growth and demand begin, there has to be an investment in acquiring assets that will help create a formidable brand.
Here are some of the benefits of financial support for businesses:
1.Innovation of Marketable Products and Services
Not every product or service is likely to gain ground in an emerging or saturated market. For a business to succeed in building a marketable product or service that will eventually become a household name or align with the needs of its targeted clients, the business must invest heavily in financial resources especially for operational needs for its success.
2. It helps the business to raise seed funds
There is no business without a startup capital. New businesses, especially startups, always source for seed funds from angel investors, friends and families, venture capitalists or debt financing.
Most times, the investors prefer to go with equity financing so that it will be easier to monitor how the funds will be utilised.
3. Providing financial support helps to bring in high-end profits for the business.
When businesses have adequate financial backing, they are able to leverage on always providing the needs of their customers. They can stock up or even resolve customer complaints immediately without hesitation because they have the right team working with them. Customers would always want to trade with a business that can easily provide their needs. So when there are high demands of their products and services, it leads to more revenue.
4.Financial support always helps grassroot businesses to thrive
Most of these grassroot businesses obtain loans from cooperative societies and microfinance banks. These financial institutions sometimes go as far as providing them with the necessary business tools that will enable the growth of their businesses. This is what is referred to as supporting local markets.
Without financial support, local markets will never be a beehive of activities because they mostly deal with the cash economy.
Leveraging with Non-Financial Support
A new business owner also needs non-financial support when growing a business from scratch.
What Is Non-Financial Support?
A form of supportive effort that does not involve financial help.
So, here is how non-financial support leads to innovation.
1.Mentorship
Business owners, especially new founders and already existing businesses in the marketplace, should always look for mentors that will help them to improve their skills. The marketplace does not remain static and if a business does not receive the right mentorship programme, it could end up without cash flow therefore staggering the growth of the venture.
Business mentors provide insight on critical aspects of running a business. Business mentors teach small businesses on how to use growth strategies for their own benefits. Business mentors will teach a business owner the factors to put in place in order to avoid bankruptcy.
2. Networking
Networking is one of the crucial parts of business growth. A business must actively participate in business networking with the right network. The right network involves great industry leaders that have made a name in the same line of business. The best way to seek a new face of business is to align with the right people.
Networking helps a business to build up wealthy knowledge.
Conclusion
Financial support and non-financial support must go hand-in-hand in order to stimulate innovation in businesses. Businesses must understand that every step of growth involves financial backup and also the right network and knowledge to produce new marketable products and services for their business.
Written by Emmanuel Otori
Emmanuel Otori has over 10 years of experience working with 100 start-ups and SMEs across Nigeria. He has worked on the Growth and Employment (GEM) Project of the World Bank, GiZ, Consulted for businesses at the Abuja Enterprise Agency, Novustack, Splitspot and NITDA. He is the Chief Executive Officer at Abuja Data School.
