What is product development and how can ready cash help your business develop new products and improve existing ones?
New product development is the process of developing a new product or service for the market and it will help ensure the future of your business. Without innovation, fresh products and new ways to deliver or enhance core services, your business truly cannot survive, much less thrive among market trends and changes. But that doesn’t mean every idea for a new product or service can or should be developed.
There are essentially three basic steps business owners should take to create a successful new business development plan:
Idea generation – Often referred to as the “fuzzy front end” of the new product development process, business owners at this step look for new ideas by doing basic research in market and consumer trends; watching their competitors; conducting focus groups; listening to existing customers, employees, vendors; going to trade shows and reading their industry magazines.
It is a good idea to generate as many ideas as possible, pushing for an impossible number, say, 1,000, will force your new business team to really use their imaginations. Out of these ideas, a few will survive through implementation. Ideas in hand, business owners need to invest time in confirming their target market and its size; identifying the buyer of the new product or service; determining the need for (and unique proposition) of it; and identifying how the product or service will be produced. Regardless of how small your business is, developing new products and services still requires more thought than impulse. For example, a screen printer adding a new line of promotional products is certainly taking less of a risk than the same printer adding a second machine, but the thought process is essentially the same.
Preliminary review – This step requires identifying costs involved in manufacturing and marketing a new product, including materials, direct labor, overhead costs, marketing and sales costs, accounting and administration costs, equipment costs, outside professional services such as lawyers, trademark agents, etc., and any other related costs. If your business has a track record for developing new products, a Merchant Cash Advance could be a good way to pay for these initial costs.
How can a Merchant Cash Advance help? – Your business may well benefit from an infusion of cash to use for targeting the existing and new markets, hiring a consultant in new business development to help steer the process (and avoid costly mistakes) and complete the preliminary review. Do not use a Merchant Cash Advance to speculate or give in to impulses, but once the product or service, its costs and its target market have been fully researched, a Merchant Cash Advance can be an appropriate way to fund new ideas.
Green light, go – Once the new product or service has been green-lighted, determine which additional resources, including people, equipment and additional cash your business needs to create a trial run. (Tip: Consider offering beta customers a discount in exchange for testing and feedback.)
The beta run will provide both product-driven and service businesses with information about economies of scale and costs. Is the product selling at a rate that warrants investment? Is the service economical to your business? Does your business need extra supplies and materials? Must employees be trained to handle the product or service? If so, think about using a Merchant Cash Advance to fund this stage of development.
The way a Merchant Cash Advance works, your business gets the lump sum of capital needed right away. Spend that on whatever new business-related purchases your business needs. Then over time, the remittance is handled through your credit card processor and normal sales activity. (Learn more about
how a Merchant Cash Advance works.)
Once the new product or service is ready to move from beta to launch, business owners should build a marketing program that includes the price, promotions and place for the new product. Developing new products and services can be an expensive process, but the benefit is not only that your business can make a profit but also that it is viewed as a market leader in the industry with good, consistent product development.
How has your business used a Merchant Cash Advance? What Product Development is your business planning this year?
As noted, the “Mini-Payment” feature of NewLogic loans helps Business’ cash flow by creating smaller, more frequent payments instead of one lump sum monthly payment. Business Owners can choose one of two “Mini-Payment” plans. See Relevant links for more details.
