In order to keep growing and moving with the times, many businesses will want to expand their repertoire from time to time – launching new products or services that complement your key strengths.
Here’s our guide to what to consider when you launch a new product or service.
Design and testing
Of course, every new product starts with a great idea. Once you’ve come up with this, you need to do some in-depth market research – to see what else is available and what the likely customer base for the new idea would be.
Look at your competitors – do they offer anything similar? If not, look harder – be sure that your idea hasn’t been tried (and failed) before.
You also need to look at your resources – will you be able to find the financing and man-hours to develop the new idea, go into production and invest in marketing it, before you see any return?
Once you’re satisfied, you can develop the specification. Don’t be afraid to revise and to get input from others – they may be able to spot issues you can’t.
Before you go into full production of a new product it’s a good idea to create a working prototype – you can use it to iron out any niggling issues, and to test the market reaction (for example, by displaying it at trade shows).
Staying within the law
Don’t forget that under consumer rights legislation, any products you sell need to be fit for purpose, described correctly and of ‘satisfactory quality’.
Depending on the product there may be extra legal considerations – for example, toys need to abide by safety regulations, and producers of electrical equipment may need to register with a recycling compliance scheme. Make sure you do your research on any regulations that apply to your new product.
Service providers also need to be aware of relevant legislation – for example, on discrimination.
Finally, you must make sure you’re not infringing anyone’s intellectual property – trade marks, registered designs and copyright. It’s a good idea to seek legal advice early if you’re not sure.
It’s hugely important to get your pricing right. Too high, and you won’t be able to compete in the market. Too low, and you could risk making little or no profit – or even selling at a loss.
To decide on the right price, you’ll have to consider lots of factors – your costs (including overheads), what your competitors charge, and the value of any special features you offer.
Don’t forget to factor in any discounts customers might expect, eg for bulk orders -or these could end up slashing your profits.
If you find after looking at the figures that you can’t sell the new products at a price that’s competitive and still makes a good profit – it’s time to go back to the drawing board.
This article is provided only for general informational and educational purposes. It is not offered as and does not constitute legal or other professional advice on the subject matter in question. You should not act or rely on information contained in this website without first seeking professional advice on the subject matter in question.