Nothing can be more exciting or tantalizing for an entrepreneur than believing you’ve either thought of or stumbled upon the next great product or service, leading to wealth and acclaim within your industry. However, many great ideas for products and services simply don’t stand up to rational scrutiny, and while it can be disappointing and frustrating to have to abandon what you initially believed to be a great idea, it’s much better to abandon the idea before you invest a significant amount of time, money, or even your reputation in a product or service that isn’t viable, no matter the reason.
Are You Ready To Move Forward?
In our previous post, we discussed the importance of impartially evaluating whether or not a new product or service is viable and worth pursuing through fairly broad but fundamental questions about the existence and nature of the potential target market for your new product or service. If you believe you have identified a problem that your new product or service solves and a target market that should be receptive of your product or service, you’re ready to take the next steps!
What Is Your Potential Selling Price And Markup?
Once you’ve determined that a market exists for your product or service, the next step involves roughly determining the potential selling price and markup you will pursue. Part of becoming a successful entrepreneur, especially at the beginning, is understanding and respecting your limitations, which can be just as important as embracing your seemingly limitless drive to succeed. If your product or service will struggle to be profitable, especially if the costs related to manufacturing and marketing your product are exceptionally high due to your stature as a small business, it is important to determine if your target market will accept a higher price point with a large enough markup to sustain your business.
How Resource-Intensive Will It Be To Bring Your New Product Or Service To Market?
At this point, you’ve likely established that your new product or service is viable, that a target market exists, and that you can sell your product or service at the right price point to generate at least a reasonable profit. Before you start the process of developing your new product or service, it is important to determine how resource-intensive it will be to bring it to market, and if you need to make adjustments to your existing schedule and business in order to accommodate the additional demands on your time and budget. If you don’t have the time or resources to commit to your new product or service, a number of options exist: you can choose to postpone the release, you can seek out a partner to assist you or hire an additional employee or employees, or you can investigate ways to potentially license your product or service to other companies or entrepreneurs.
Do You Need To Patent Your New Idea?
If you have an idea for a product or service that you truly believe is original and innovative, registering a patent is an important step in securing your rights to exclusively produce or license your product or service for a period of time and preventing other companies and individuals from utilizing and profiting from your idea. Patents can be expensive, including both the registration fees and the time and money you’ll need to spend in order to determine that someone hasn’t already patented the same idea. You will also need to be prepared to, if necessary, defend your patent in court.
What’s Next?
These posts have provided a generalized guide to evaluating a new idea for a product or service. Additional steps are necessary to complete a truly comprehensive evaluation, so you may need to consult with a professional who can accurately determine its viability.