In Maine, the legislature is currently debating slowing or eliminating an increase in the minimum wage enacted last year after a citizen initiative passed. Small businesses came to Augusta to argue that they couldn’t raise their prices, and so the increase in their labor costs was too high.
For small businesses who sell products based on price alone, it’s probably true that raising prices isn’t possible. But why don’t these businesses try to offer new products or services that aren’t commodities? Why don’t they try innovation as a strategy? It may be that many small businesses think innovation is only something that high-tech companies can do. Here are some examples, all small Maine companies, that prove them wrong:
Gelato Fiasco, a small business based in Brunswick, ME, wanted to enter the crowded ice cream business. But, instead of making ice cream like everyone else, they decided to make gelato, an Italian type of ice cream. By being different, they were able to gain a large following. Today, Gelato Fiasco’s Brunswick store is still crowded on summer evenings, but their product is also sold in grocery stores nationally.
Sea Bags, based on the waterfront in Portland, ME, makes tote bags. You’d think that tote bags are all the same. But Sea Bags decided to make theirs out of old sails. So, not only are they a sustainable business, using recycled materials, but their bags are very different – each one is unique, depending on the sail it was made from. By the way, they aren’t cheap! But, by being unique, Sea Bags has earned their price point. Sea Bags has grown to have 19 retail outlets and sells online as well as to corporate clients.
What’s more a commodity item than compost? Coast of Maine, based in Washington County, ME, made compost into a higher priced, designed product, by incorporating locally sourced materials such as shellfish (lobster & crab shells), salmon, wild blueberries, and cow manure. Additional local ingredients include: tree bark, worm castings, and seaweed. Coast of Maine distributes organic retail bagged goods to independent garden centers along the Northeast, Mid-Atlantic, and parts of the Mid-West.
Luke’s Lobsters is another innovation story. It seems like almost everyone in Maine sells lobster rolls. Luke and his brothers saw a unique opportunity – sell lobster rolls where people least expect them to be! His first food truck in the Lower East Side in Manhattan was wildly successful. Now, they are in multiple locations in Manhattan, Philadelphia, Washington, DC and soon, back home in Portland. To make this happen, they have had to be innovative about their supply chain and distribution network.
Innovation is new ideas, products, processes, business models that get implemented, that come to market. And, innovation can be defined, to quote Doug Hall, as something that is “meaningfully unique,” something that your customers would be willing to pay more for! When you uncover a need that potential customers have, and you meet that need in a way that is important to them, they will generally pay more for it! If something is really unique, versus being more of the same, you will generate new revenues, either from your normal customers or from new ones.
Are you interested in learning about innovation and entrepreneurship-focused economic development? Get started with this complementary pdf. https://pages.convertkit.com/d33a2124c1/13b87cf746