New products and services are the lifeblood of any company. Without them, eventually, every company’s sales dry up, however good the original products were.
With large multi-nationals, this is, of course, a concern. But they often have very deep pockets and can afford to run permanent R&D teams whose task is to develop the products of the future.
With small companies, it’s considerably more difficult. Typically, pockets are shallow and time is scarce. Any available budget and time are normally poured into maximising sales and profit from existing products and services. It’s very difficult to make the decision to invest in new products that probably won’t show a return for at least two years. But, be warned. Not doing so can be the worse thing you can do for your long term growth.
So, how do you develop new products in your small business?
Timing is critical. If you start too soon, you could put your company at risk of over-stretching itself. If you don’t start soon enough, there’s equally a risk that your products will become obsolete or your competitors overtake you with the quality of their products.
There are a number of considerations when choosing a new product or service, such as:
What does the market want or need?
What can you cross-sell to your existing customers?
What are your competitors’ products like?
What are the trends in your industry?
How much will each potential new product cost to develop?
How long will each potential new product take to develop?
Can you make a profit on the new product?
Have you got the expertise in-house to develop the new product?
What will it cost ?
This list is not conclusive, but it demonstrates the amount of analysis and planning that should be applied before simply throwing resources and funding at the first idea that comes to mind.
Time permitting, it’s useful to do some market research. Ask your existing clients what their ideas are and what they think of yours. Ask your employees their views too. When you have examined all the feedback, it’s then just time to choose!
Having agreed on which product/s you’re going to pursue, you now need to start the development process. Typically, the process has the following steps:
Create a project plan of who’s doing what and when.
Design a specification outlining clearly the product objectives, key functionality and features. Ideally, this specification will contain pictures too.
Agree deadlines for review so that, as it progresses, you can ensure that it's meeting your vision for it
Test it internally and make any revisions or fixes
Test again and obtain feedback to make sure others like it.
Once the product itself is developed, you need to consider how it’s packaged and priced.
This is a great time to bring in the creative people in your company.
Organise funding for the production and marketing of the product. Loanfinder can assist you with this.
Launching a new product is always an exciting time. You will probably want to work closely with your marketing and sales teams to prepare the launch. Some options include:
A large event where you invite clients and prospects (and maybe the media) to be the first to see the new product.
Arranging face-to-face meetings with key clients for a more ‘intimate’ introduction of the product.
A mass campaign (with advertising and social media), to shout about the product to as wide an audience as possible.
A roadshow in the format of mini events, where you give potential clients from different geographical locations an opportunity to see the new product up-close.
Developing a new product in a small business can be tricky, so if at first you don’t succeed, don’t worry, and don’t be put off. Often you’ll find that the timing was wrong in the market and it will come in useful in the future.
But if it doesn’t, console yourself in the knowledge that next time the whole process of product development will feel easier and a great deal quicker!