The business is becoming more competitive as the years go by, with costs of operation only increasing and taking larger chunks out of the financial pool.
With the notion of globalization creeping behind businesses’ backs, maintaining cash flow in relatively new trading conditions has become a burden for most. Thriving businesses have only remained on top of the food chain through consistent innovation.
Lacking innovation spells imminent doom for your business, and if you happen to run a small-scale business, there is no choice here. For a smaller-scale business to keep up with changing tides and rougher competition, it must adapt to new markets and increase its market share. How can they do this? The redesigning of old products and the introduction of new ones.
New products mean new value offers, a new market, and an opportunity to cut back on costs. Moreover, a new product kickstarts a whole new mode for your staff and can cause a brand identity refresh.
Small businesses thrive on product development, as markets of all kinds will continuously demand real value from them. By acknowledging the customers’ needs and demands, producing a quality, reliable, and efficient product will be key to achieving a stable revenue stream. Gathering opinions and ideas from both your staff and your market is a quick method to conjure up at least an idea for an optimized product.
Around 42% of small businesses fail due to diminishing market demand. That only goes to show that if you want your business to survive, innovation through product development is the only way to do it. So, if you are creating a business strategy or updating your current one, we highly suggest you look into product development.
If you need any more reasons to do so, here are some benefits of product development that might convince you.
Benefits of Product Development
- Value Refresh
A business should only aim to do one thing – provide value to customers.
Value is nothing that you can control. It is your customers that choose to assign value to products. If your product fails in the eyes of the customers, then they have no reason to buy it. In some cases, the same effect goes if there is too much value.
Consistently tracking the value of your products will tell you how the market receives them, which is why product development should be put in place. If a product is failing, the only way to deal with it is to create something better.
Constant improvement in product and performance is perhaps the most attractive quality that a business could have, and it will have customers lining up in the thousands upon millions if you do it consistently enough. Increasing value is the number one way to eat your competition up and rack up the whole market.
- Studying Your Market
A major step to take in developing new products is researching your market.
Research your audience – everything from what they do daily, their favorite app to use, whether they prefer dogs or cats, and anything of value that may tell you something about the products they buy.
The information you gather is vital to creating an optimized product of value and how you can create a marketing strategy as you go on. By analyzing product price, use of budget, and marketing methods, you can improve your marketing, which is just as important as product quality.
- An Improved Workforce
Product development nurtures a notion of innovation and advancement within the work area, and this will exude productivity to your employees.
Nourishing the ideal that you are in search of quality will only communicate that you are a respectable business owner, which will only invigorate your partners and staff.
This can lead to increased productivity, leading to a more vocal workforce dedicated to the cause just as much as you are. In addition, they will be pitching ideas left and right and will point out any tweaks that the product might have, which will greatly impact how the product turns out to be upon launch.
- Expanding your Market
Developing new products will have you in places that you did not expect to end up in, and this is meant in a good way, developing products that have better quality, added value, and even a slicker design will not only attract your intended market but other markets that you did not know were just looking for the exact product you have placed on the table.
This is of course a good thing as new markets mean more revenue streams. This will give you even more space to innovate in the future as newer customers will give you more information on which directions your products will be taking the next time you have a design update.
- Stay one step ahead of the competition.
Developing new products will have you in better places you did not expect to end up in. Creating products that have better quality, added value, and even a slicker design will attract not only your intended market but other markets that you did not know were just looking for the exact product you have placed on the table.
This is, of course, a good thing, as new markets mean more revenue streams. In addition, this will give you even more space to innovate in the future as newer customers will give you more information on which directions your products will be taking the next time you have a design update.
The Risks of Product Development
We won’t sit here and tell you just all about the wonders and magic that product development is about, but the risks that come with it as well. The risk factor of it all is why many businesses do not pursue product development in the first place, because once a promising new product fails to meet expectations, it could do more harm than good for the company.
You can not underestimate how easy it is to get wrong as well, because there are a lot of factors at play when creating a new product. From manufacturing to marketing, to product launching, and keeping up with quality control, a small gap in either of those can smell long-term damage to your prospects.
Even before getting the product ready, problems can occur in the research itself, or perhaps a lack of budget to get things started is enough to halt a business’ hope of innovation.
There are ways to avoid a disastrous turn for your product, such ways include commercial assessment in the form of a pre-release of the product in question. This means that you test your product in the market before launching it so that you may receive real feedback from your customers you may finetune any details that would have struck heavier damage in later releases. You must ensure that the product you are creating will be enough to put your business on the map or pull it out of the mud by generating enough revenue to cover all the costs put into it.
Sources of Additional Funding
Government Programs
Government grants are the government’s way of helping businesses provide better service to the community and boost the economy.
This makes Government grants certainly one of the safest, most reliable, and most dignified ways of gaining support for your business. Not only do grants provide financial assistance, but some will provide you with technology and other assets that will help you launch yourself to greater heights.
However, grants will differ from project to project and in varying markets, with some grants only offering assistance to niche businesses that may also contribute to their project. So, as there are specific government grants for each industry, you will have to research which one will suit you and the requirements that come with it because obtaining a government grant is very tedious.
For small businesses who plan on innovating, some programs will be interesting to you. One such program is Canada’s SR&ED program, a tax refund program that is one of the most popular in the country. SR&ED aims to advance technology throughout Canada, and it will provide assistance and incentives to businesses that may have the promise to deliver on this goal.
Family and Friends
A simple and easy way to receive funding is through loans from close ties in your family and friends. Yeah, getting into business with family and friends can turn sour quickly, and we understand that. However, the good thing about loans from family and friends is that they can be flexible in creating payment arrangements, making it easier to make a deal where both parties can be satisfied in this endeavor. Nonetheless, these proceedings should be done professionally not to undermine the risk involved.
Equity
Equity entails financing from a third party who hopes to gain a share of the business when doing so. Equity investment grants the investor a percentage of the company. Therefore they will have some say and power over the business. Though this is only sometimes the case, and some investors would prefer to do things privately.
Business angels
Business angels are individuals that invest in entrepreneurial endeavors to gain equity. They will provide additional capital and be an additional contributor behind the scenes through value. They will expect profit or shares by achieving a commercially successful business.
There are pros and cons in partnering with an angel investor, and though advantages include a longer period to wait for returns and a generous amount of knowledge or experience, they may try to gain half or occasionally complete ownership of the business.
Conclusion
With everything that has been said above, we are not even sure yet that we have established just how important it is that businesses allow themselves to evolve and develop newer products. If you are a small business owner, you can not wait around to see the consequences of not doing so, as product innovation means an improvement in your product and a change for the better behind the scenes. Therefore, you and your team should get the whiteboard ready to pitch ideas.
Author’s Bio:
Shelly Solis is the co-founder of SaaSLaunchr, a website offering specialized SEO services for SaaS businesses. Head on to SaaSLaunchr – SaaS Marketing blog!
