“The Simple Innovation Framework Every Small Business Should Use”.

Introduction: Why Small Business Owners Think Innovation Isn’t for Them.

When I sit down with small business owners — especially those in mature, well-established markets — I often hear the same line:

 “Innovation? That’s for big companies or tech startups. I just need to focus on keeping things going.”

And I get it. When you’re running a small business, innovation sounds like a luxury. You’re juggling staff, customers, cash flow, and all the day-to-day fires. The word “innovation” conjures images of Silicon Valley, massive R&D budgets, or flashy new products — none of which feel relevant when you’re running a local service business, a retail shop, or a trades company.

But here’s the truth I’ve seen play out time and again: 

“Innovation isn’t about technology or massive reinvention. It’s about finding smarter, simpler ways to serve your customers.”

Let me give you a few examples.

There’s the independent café owner I worked with who felt stuck as the ‘chains’ opened around her. Instead of trying to compete on price, she started offering a subscription coffee service: prepaid monthly plans where locals could grab a daily coffee without queuing at the till. She locked in loyal customers and smoothed out her cash flow — that’s innovation.

Or the family-run dry cleaner who introduced an SMS pickup and delivery scheduling system. Same machines. Same core service. However, by improving convenience, they stood out from competitors who hadn’t changed in 20 years.

What both of these businesses did — without big budgets or fancy tech — was innovate along their customers’ journey. They found small ways to make life easier, and it paid off.

That’s where McGrath and MacMillan’s consumption chain comes in. It’s a simple framework that helps you spot opportunities to innovate at every step of your customer’s experience — from how they discover you to how they replace or dispose of what you provide.

In this blog, I’ll break down why small businesses often overlook innovation, how the consumption chain works, and how you can use it to unlock new value, without blowing your budget or reinventing your business.

Let’s dive in.

1: The Consumption Chain Explained.

When I first came across McGrath and MacMillan’s consumption chain, I had one of those lightbulb moments. It’s so simple — but incredibly powerful. The idea is this: instead of focusing only on what you sell, you map out the entire journey your customer goes through, from the moment they realise they need something to the moment they’re done using it (or replace it).

Think of it as stepping into your customers’ shoes and walking alongside them the whole way. At every step, you’re looking for friction, frustration, or opportunities to make their life easier.

Here’s how the chain typically looks — and how it applies in the real world:

1.1 How do customers become aware of their need?

This is the moment a problem or desire pops up.
Example: A local accountant starts offering free “tax health check” webinars, helping small businesses realise they’re overpaying tax or missing deductions. That creates awareness and positions the accountant as the solution.

1.2 How do they find your product or service?

This is about discoverability.
Example: A traditional butcher starts posting daily specials on social media, making it easy for time-poor families to plan meals and shop locally.

1.3 How do they choose you?

Selection is its own pain point, especially in crowded markets.
Example: A local gym offers transparent online pricing and virtual tours so customers can compare easily without feeling pressured.

1.4 How do they order or buy it?

What’s the experience of making the purchase?

Example: A bakery sets up online ordering for next-day collection, saving busy customers the hassle of queuing during lunch breaks.

1.5 How is it delivered or accessed?

This is where convenience often breaks down.
Example: A florist introduces bicycle couriers for same-day delivery, outpacing larger chains on speed and sustainability.

1.6 How is it paid for?

Example: A café launches a mobile app with prepay and loyalty features, cutting down queue times and encouraging repeat visits.

1.7 How is it set up or first used?

Example: A home services company sends new customers a quick video guide on using their app to book and manage appointments.

1.8 How is it used over time?

Example: A car valeting business offers subscription packages so customers stay on top of maintenance without thinking about it.

1.9 How is it serviced or supported?

Example: A local IT repair shop introduces remote support packages, solving minor issues quickly without repeat visits.

1.10 How is it disposed of or replaced?

Example: A garden centre offers a plant recycling program with discounts on new purchases, encouraging eco-conscious replacements.

By looking at each of these steps, you’re not trying to reinvent your business — you’re finding small, meaningful ways to make your customers’ lives easier. And that’s what innovation is all about.

In the next section, I’ll explore why small businesses in mature markets often miss these opportunities — and how you can avoid falling into that trap.

2: Why Mature-Market Small Businesses Miss Innovation.

Over the years, I’ve seen it time and again: small business owners in mature markets convince themselves that innovation is something that happens elsewhere. In Silicon Valley. In big corporations with massive R&D budgets. In shiny industries that get headlines, not in local trades, shops, or service businesses like theirs.

And I understand why. When you’re running a business in a mature market — where customers, competitors, and ways of working have been largely stable for years — it’s easy to fall into a certain mindset:

“There’s nothing new to do here. The game is set.”

But that’s where the danger lies. Because the game is never set. Customer expectations shift. Technology changes how people want to interact. New competitors enter, often with a fresh take. And if you’re not paying attention, you wake up one day and realise someone else has out-innovated you — and taken your customers with them.

Here’s why small businesses in mature markets often overlook innovation:

2.1 “We’ve Always Done It This Way” Thinking.

It’s comfortable. If a process or service model has worked for 10 or 20 years, why change it? The trouble is, this mindset blinds you to small changes that could create huge value. I worked with a local print shop that resisted offering online ordering — they thought their loyal customers wouldn’t want it. They lost significant market share to a competitor who made it easy for customers to upload files and order prints without leaving their desks.

2.2 Focus on Operational Survival.

When you’re focused on paying the bills and keeping the doors open, it’s hard to lift your head up and think strategically. I see owners stuck in daily firefighting — dealing with suppliers, customers, cash flow — leaving no time or energy to explore what could be done better.

2.3 Misunderstanding What Innovation Is.

Many small business owners equate innovation with big, expensive, disruptive change — new products, new technology, or entirely new markets. But as McGrath & MacMillan’s consumption chain shows, innovation can mean simply making your customer’s journey easier, faster, or better. It’s not about invention — it’s about improvement.

The good news? Once you shift your thinking, you can start spotting innovation opportunities hiding in plain sight — and that’s what we’ll cover next using the consumption chain model.

3: How to Use the Consumption Chain to Identify Innovation.

Once I started using the consumption chain as a lens for helping small business owners find innovation opportunities, everything changed. Suddenly, what seemed like “mature market limits” became openings. You stop thinking, “There’s nothing new left to do” — and start seeing dozens of ways to make your business stand out, all by improving the customer journey.

Let’s break down how you can apply this in your own business.

Step 1: Map Your Customer Journey.

Grab a whiteboard, notebook, or even a blank sheet of paper. Write down every stage of the consumption chain as it applies to your product or service. From the moment your customer realises they have a need to the moment they replace or dispose of your offering.

Example: A local bike shop might map:

1️⃣ Awareness of needing a bike
2️⃣ Finding a shop
3️⃣ Comparing options
4️⃣ Visiting the shop
5️⃣ Making the purchase
6️⃣ Paying
7️⃣ Getting the bike home
8️⃣ Learning to use it (or getting it fitted)
9️⃣ Servicing
🔟 Replacing or upgrading

Step 2: Ask Friction-Busting Questions at Each Step.

At every link in your chain, ask:

• Where do customers get frustrated, confused, or delayed?
• What do they wish were easier, faster, cheaper, or more enjoyable?
• Where do they hesitate — and why?

Example:

• Selection: A small furniture store realises customers hate not knowing if items are in stock. Solution? Add real-time stock updates to their website.
• Payment: A café notices that lunchtime queues drive people away. Solution? Introduce an app for prepay and pickup.

Step 3: Look for Small, High-Impact Fixes.

This is where innovation happens. You don’t need huge new products or costly tech. You need practical improvements that solve a real pain point.

Examples:

• Awareness: A plumbing business runs “how to spot leaks early” ads, becoming the go-to expert before customers even have an emergency.
• Delivery: A florist adds a low-cost subscription for weekly home flower delivery, creating regular, predictable sales.
• Disposal: A garden centre offers a tree recycling scheme with discount vouchers for replacements.

Step 4: Prioritise — And Plan.

Once you’ve identified opportunities, don’t try to do everything at once. Choose one or two links to focus on for your next 90-day sprint. Build them into your 365/90 plan so you actually follow through, not just brainstorm ideas that gather dust.

The beauty of this approach is that it’s accessible to any business, of any size. The trick is to stop looking at what you sell and start looking at how your customers experience it, every step of the way.

In the next section, I’ll show you how to take those insights and turn them into real action through simple, low-risk steps.

4: Simple Steps to Start Innovating.

One of the biggest mistakes I see small business owners make is overcomplicating innovation. They assume it requires big budgets, complex technology, or entirely new business models. The truth is, small, smart changes based on your customer’s real journey can have a massive impact — and they’re far easier to implement than most people realise.

Here’s how I advise business owners to get started without feeling overwhelmed:

1️⃣ Run a 365/90 Innovation Sprint.

Don’t wait for a quiet moment that never comes. Build innovation into your planning cycle. Use your next 90-day sprint to focus on one or two links in your consumption chain. This keeps things achievable and focused.

Example: A local cleaning company decided to innovate just around payment, introducing app-based subscriptions that boosted retention and reduced admin headaches.

2️⃣ Involve Your Team or Customers.

You don’t need to solve it all yourself. Ask your team where they see customers getting frustrated. Or better yet, ask your customers. A single piece of feedback can spark a breakthrough idea.

Example: A bike shop introduced free at-home delivery because customers mentioned how hard it was to transport bikes in small cars.

3️⃣ Focus on Quick Wins.

Don’t fall into the trap of spending months designing something elaborate. Look for changes you can test fast and cheaply. Even small improvements can differentiate you in a mature market.

Example: A hair salon began offering rebooking via text with an automated link. It cost almost nothing, but cut no-shows by 30%.

4️⃣ Build, Test, Review.

Once you’ve picked an innovation, don’t just launch it and forget it. Make it part of your 90-day review cycle. Did it work? How did customers respond? What needs tweaking? This is how you turn small innovations into long-term value.

Example: A café tried prepaid coffee subscriptions. After 90 days, they found the pricing needed adjusting, and relaunched with better terms that customers loved.

The key? Start small, act fast, and stay focused on what makes your customer’s journey easier or better. That’s what real-world innovation looks like for small businesses — and it’s entirely within your reach.

Final Word: Innovation Isn’t a Luxury — It’s Your Edge.

If you take one thing from this, let it be this: innovation isn’t about tech, disruption, or massive change — it’s about making life better for your customer in small, meaningful ways.

Mature markets aren’t dead ends. They’re filled with customers who still have frustrations, delays, and unmet needs. Your job isn’t to reinvent the wheel — it’s to spot where that wheel wobbles and smooth the ride.

I’ve seen tiny innovations transform small businesses:

• A café added pre-order apps that boosted loyalty.
• A local tradesman offering next-day slots to beat slow competitors.
• A retail shop creating a subscription box that turned one-off buyers into regulars.

These aren’t flashy changes. But they work — because they’re built around the customer’s journey.

The consumption chain model gives you a map. The only question is whether you’ll use it.