How to Bring Your Concept to Market
You have moved past the stage in which you have a brilliant business concept; and, you are no longer in the product development phase, where you do the pre- and post-prototype. You have tested your concept by conducting online surveys, focus groups, trade show demonstrations or through some other means to determine if potential customers will buy your product or service. You have refined your concept based on reliable feedback. Now comes the business development, which means you are all geared up to start manufacturing, marketing and selling your product or offering your service.
"I started out with a concept on a piece of paper, now we are in 1,000 uniform stores," says Gary R. Bronga, president of Miami-based Clipeze Worldwide. The Clipeze is Bronga's personal design spin on an identification badge that features a bar at the bottom of a lapel pin allowing for custom logos and artwork for companies and associations. Braga had worked in the aerospace industry at Cape Canaveral for 21 years, where wearing identification badges was a routine part of his wardrobe.
After applying for five different design patents, finding a supplier for the prototype, and coming up with a low-cost price point, Braga contacted buyers in catalogs. "The advantage of going to catalogs is that they like new products," he says. "I conducted a marketing campaign where it was geared toward the individual buyer with a personal letter. I sent samples. I followed up."
According to Braga, catalogs help in several ways: "They distribute to an entire industry, they provide a stream of income, they keep your product in the catalog as long as it sells, and they open up access to other outlets, including retailers." Your local library will house directories listing catalogs and mail-order retailers.
"Once you get into that first one, which is always the toughest, other catalogs companies in that category will contact you. If you are good for their competitor you are good enough for them,' adds the author of Bringing A Product To Market From Your Home. Clipeze is in some 20 catalogs. Braga has sold to date over three million of his badge holders. Nurses and other medical professionals are among his biggest supporters.
An analysis of your business will of course dictate if mail-order is the best distribution channel for your particular product. Or if your business is a service then how will you find customers and how will they know about you.
How to Bring Your Concept to Market: Have A Business Plan
There are three resources that must be maximized to ensure your business success -- money, strategy, and people. Having a business plan provides a detailed description of the best way to optimize these resources. But this goes beyond a 10 to 20 page document; you need a well thought of plan of action.
What are the mechanics to bringing your product to market: how much will it cost to produce, what price will you sell it at, what is estimated sales volume and profitability? The answers to these questions are where your earlier market research and consumer feedback comes into play.
"Moving forward without a written business plan is a common mistake among budding entrepreneurs," says Jeff Mesquita, chairman of the Atlanta chapter of SCORE (Service Corps or Retired Executives). "A business plan forces you to clarify the strategic plan for business growth," he adds. It's also a living document that you should revise more than once over the course of the business.
For help developing your business plan, go to local small business development centers, many of which are affiliated with local colleges or chambers of commerce. Start is with the Association of Small Business Development Centers. Also, SCORE's Quick Start program assists business start-ups nationwide.
Dig Deeper: Business Plan Template
How to Bring Your Concept to Market: Execute Your Business Concept
Your job now is the implementation. Figure out how to get your product or service into the hands of customers who are your target market. Will you do it yourself or will you outsource manufacturing? Who is going to physically transport your product to customers? If you haven't already done so, line up suppliers, manufactures, and distributors. Check with the National Association of Manufacturers, Thomas Register of American Manufacturers, or National Association of Wholesaler-Distributors.
What are the methods of distribution: retail, online, and/or catalog purchases? 'What's your understanding of the final consumer, the end-users? Your market research should have revealed more than do you like my product or service but really how and where does your target market buy,' says Suzan Barnett, a consultant and area director of the Small Business Development Center at Valdosta State University in Valdosta, Georgia.
Who will sell it: you, in-house sales staff, independent reps, telemarketers? What about facilities: will you operate from home, a kiosk in the mall, or local storefront? Take into consideration key factors. Foot traffic is a big deal in retailing. Don't overlook business incubators, which are one-stop shops of space and services, including technical assistance. Contact the National Business Incubation Association.
How will you get the word out about your product or service to your target market, asks Barnett. If they don't read newspapers but look for information online, then you don't want to spend money on print advertising (and vice versa), she explains.
Many cash-stamped entrepreneurs are using Google, which provides a host of web-based products, services, servers, and client applications beyond Gmail. Google's AdWord enables small businesses of all kinds to place ads for as little as $25 a month. Yahoo! has a Small Business Resource Center that offers a wide range of Web hosting, e-commerce storefronts, sales lead generation, and online marketing services.
How to Bring Your Concept to Market: Protect Your Concept
Once you have tested your concept and found it to be sound, safeguard your brand name or image by registering it as a service mark or trademark, suggests Richard Stim, attorney and author of Patent, Copyright & Trademark: An Intellectual Property Desk Reference. To protect a unique product you have invented—one that is fully developed and working—register a patent with the U.S. Patent and Trademark Office. Literature, music, art, fashion designs, and software programs are copyrighted and registered with the U.S. Copyright Office.
The most common response by a competitor to a successful product or service is to imitate it. "The best defense is to always strive to be No. 1 in the marketplace," says Braga. "Most companies will let you gain market share before they copy you." Have plans in the works for making improvements to your product or your service so that you are prepared when there are competitive threats to your business, he suggests.
Not every product requires a patent. This is a costly process in terms of lawyers and fees-- from $3,000 to $15,000. A lot of it depends on how difficult it is to duplicate your idea or reverse engineer your product, says Stim. Coca Cola doesn't patent their secret formula so that their recipe doesn't get stolen; it's treated as a closely held trade secret.
One way to protect your product or service is to position yourself as an expert or go-to person in the industry, says Susan Friedmann, a nichepreneur coach in Lake Placid, New York and author of Riches in Niches: How to Make it Big in a Small Market. Use social media, blogs, Twitter, Facebook. "Those things become important in letting people know who you are and what you do." Arrange for speaking opportunities at conferences or attend trade shows to let people see how knowledgeable you are even when aren't selling directly to them.
How to Bring Your Concept to Market: Build Your Capital
Bank credit and traditional loans are even harder to access these days in the post financial meltdown economic climate. Which means you'll probably have to tap into personal savings, equity in your home, or relatives to finance your new enterprise. Braga started his business with $500 and a computer. "I made sure that I didn't go out and borrow a bunch of money and get into a lot of debt."
Barnett notes that if you have not positioned your personal credit such that a bank will see you as a strong enough credit risk, they won't lend to you. "A poor credit score will ruin any chance of qualifying for a loan."
Starting out, have enough money in savings during the first 6 to 12 months of operation so that you're not relying on the business to cover personal living expenses. Pour profits back into the business to pay for the business' expenses.
Keep in mind selling a lot of product or service doesn't mean your making money. Some businesses spend more than they earn. "Stay on top of your finances," says Barnett.
Dig Deeper: How to Finance a Business With Your 401K