Product development is an essential part of any business. Big businesses normally have dedicated teams for product development, whereas small businesses won’t often have the funds for this. However it is essential that small businesses still invest in product development as it will help the business grow and expand.
It can be costly and time consuming to develop new products for your business, nonetheless it is a necessary venture. Here are five steps to break down the process of developing new products.
It’s important to make a judgement call as to when you and your small business are ready to dive into product development. You need to make sure that it’s not so early that it may take up all your funds, and not too late that you have to play catch-up with your competitors. You don’t have to be the first one in the market to launch a certain product however you do need to make sure that your product has something unique to offer.
You need to take time to really consider if your business can handle a lengthy, time-consuming and potentially very expensive venture. As a small business owner, there already seems to be little time for all the tasks required of you – do you have the time and dedication to give to this new project? As the owner and leader of the product development project, you will be the driving force behind it, so you need to make sure that you are fully prepared to take on the project.
There are several questions you should have about the whole process of product development, and market research will allow you to answer them. Here are some of the questions that you should be answering when carrying out your market research:
- Is this new product wanted or needed by your customers? This will help you decide if there really is space for your product in the market.
- Is the product going to bring in more customers and help you retain the loyal customers? That should be a focus of a new product development as the whole goal is to grow and expand your business.
- Are you following a trend? If you are following a trend then timing is key, you need to make sure that if you are jumping on the bandwagon of a trend that you are timing it right. You need to get the product at the right time, which may make it difficult for small business owners, as the costs could be huge.
- Do your competitors have a similar product? Are you just playing catch up with your competitors because you feel like you should, or is your product genuinely going to bring something new and different to the market?
- You will also need to find out how long it will take to develop the product, as well as a rough estimate of the costs.
Before the actual process of developing the product you need to take time to prepare. Firstly, you need to write a product specification. This will give a detailed breakdown of the product, allowing yourself and others to understand what the product is all about. You will also need to set a budget for the whole process of developing the product. Be conservative with this and make sure you give yourself room for error by over estimating costs. Your product specification should also include a unique selling point (USP), making sure that your product has something unique to offer. This is especially important if you are releasing something similar to a competitor, your prospective customer or client will need a reason to pick your product over your competitors.
If possible you should try to put a team together whose main responsibilities will be to work on the new product. This may be difficult if you are a small business owner, however it is vital that you have the right people to work on the project. You may only need two or three people including yourself, however everyone should be made aware of their individual tasks and objectives on the project. Additionally, create a timeline for the whole team to follow in order to avoid any unnecessary delays.
When you start to actually develop the product, you may have to see several prototypes and designs before you even begin to be happy with it. Product development can be long and grueling process and you will really have to be patient with it. However, if the product isn’t perfect you will need to work on it over and over again, making sure that the end product is what you expected, or that it surpasses expectations.
Once you have the final product, you will need to test it. Test it internally, you can do this yourself and ask your staff and team to also test it out. This will help you be sure that it is fit for it’s purpose and ready to be tested externally. You will then test your product externally, this can be with your loyal customers and clients to get feedback and see if you need to make any other changes.
You will also need to make sure that you have developed the packaging for the product, as this is one of the most important parts of a product. Additionally, you will need to set a price for your product which can be decided by considering the costs of actually making it.
After what may seem like years, your product is finally ready to be shown to the world. The launching of the product is almost as important as the production of it. You need to execute a marketing strategy together with your marketing team that will make you new product attractive to potential customers or clients.
You may consider having a launch party and inviting the most relevant and important people you want to hear about it first-hand. For example if you are releasing a cosmetics line, you may want to invite industry experts, bloggers, and makeup gurus to your launch party to get word out there about your product. Social media influencers are also great people to invite as they can build relationships for you and allow you to reach a wider audience that your brand may otherwise be unable to reach.
Alternatively you may want to have a more intimate affair with carefully selected clients, and share the product with them first. If you have created a product that you want to cross-sell to your existing customer base, then this type of launch event would be ideal.
Developing a product will need thorough research, a considerable amount of time and potentially a large amount of money. However this step by step guide should have given you an insight into the procedure and whether it is something your small business is ready to consider.