Building Your Business Plan: Part 1 – Introduction
Building Your Business Plan: Part 2 – Business Overview
Building Your Business Plan: Part 3 – Products and Services
Building Your Business Plan: Part 4 – Studying the Market
Building Your Business Plan: Part 5 – Identify Your Market
Building Your Business Plan: Part 6 – Competition and Industry SWOT
Building Your Business Plan: Part 7 – Business Environment
Building Your Business Plan: Part 8 – Product Sourcing
Building Your Business Plan: Part 9 – Pricing
Building Your Business Plan: Part 10 – Product Development
Building Your Business Plan: Part 11 – Distribution and Sales
Building Your Business Plan: Part 12 – Advertising Plans
Building Your Business Plan: Part 13 – Purchasing Equipment
Building Your Business Plan: Part 14 – Financial Assistance
Building Your Business Plan: Part 15 – Checklist
Building Your Business Plan: Part 16 – Full Template
This article is written to provide you with the tools required to assist with developing your Business Plan as it applies to Product Development, what steps are involved, and warranties.
In part 9 of this series, we discussed determining prices and what you are going to charge. In this part of the series, we will discuss product development. In laymen terms, this is the process where a business establishes how it will produce its products for its customers, how it will test its products, and what warranties will be considered when rolling out the final product to customers.
Section 9.0 – Product Development
All businesses begin with a simple idea. An idea is something that is intangible which needs to be brought to life to make it into something tangible and worth selling to customers. The product development process supports you to get where you want to be.
A. What stage are you at in the development of your product?
The product development process consists of 5 stages: brainstorming and conceptualization, research and idea screening, concept development, prototyping and evaluation, and product rollout. Throughout this process you have already completed the first two stages through coming up with the idea, doing your market research, and finding suppliers. Now it is time to put together all that you have gathered and begin the development stage.
The development stage involves assessing the costs of designing, manufacturing, packaging, or distributing each product. There might be an instance where you may need to identify the human and capital resources required and/or the elements that should exist for the product to work. It would be valuable to begin to break out a marketing plan and to build a larger scale business strategy. Once you have categorized your products in their development stage, you will have a mark to reference for each and understand what is or isn’t missing. Product development is resource-heavy, and you may need to get funding for your product if you are working with limited capital.
Next comes prototyping and evaluation, in this stage you’ll breathe life into your product concept. It’s time to move into design and production once you have everything ready to rock and roll. Here is when you’ll create an actual prototype or an approximate mock-up. Most businesses begin running a small-scaled release at this point and test their product(s) with a select group of their targeted audience to evaluate and provide feedback. This is one of your last (but never final) opportunities to smooth out any kinks or technical issues. Depending on your product, the cost and time needed will vary.
Pro Tip: There are instances where you may require industry licenses to conduct these evaluations such as a Food Safety certification, permits to do business, and so forth.
Your prototype and evaluations could go through hundreds of changes between the initial concept to final product, so please be patient and trust the process. Each stage of the product development phase plays an integral part of its success, especially when it comes to the prototyping and evaluations. While you are in the development stages, make sure you keep an objective eye on the customers’ insights with each step you take.
The final stage of this would be the product rollout. This is essentially the launch of your product to the public. When you launch your product, it is critical that your operations are prepared, including customer and technical support. Always remember to utilize your previous research and analysis to assist you with this – diligent preparation and abundant resources won’t save a product if it doesn’t meet the customers’ needs.
B. How will the product(s) be made?
To answer this question, refer to the development stage and describe what was done or what technology was used for each stage of the product development.
C. Is all the manufacturing done in-house?
How was your product produced? Did you have to source out suppliers to assist you in the making of your product, or were you able to get it all done in-house? Remember in the previous section, you detailed out who your suppliers are that will provide you the service and support you require for your business’s products.
Section 10.0 – Product Warranties, Guarantees, and Quality Control
In this section of the Product Development, you’ll focus your energy on mitigating risks concerning your product’s warranty and quality control.
D. What product warranties or guarantees do your competitors offer?
Most companies have their warranties or guarantees listed on their websites such as BestBuy, Canadian Tire, Home Depot, The Brick, Starbucks, and so forth. If your competitors are smaller businesses within the locale, reach out to them and ask for their input. We recommend furthering your knowledge by visiting Marketing91. Here you will gain valuable exposure to the difference between Warranty and Guarantee.
E. Do your warranties or guarantees meet or exceed your competitors’?
Before answering this question and making a final call, you may want to be aware of the Federal Government’s legislature on misleading warranties and guarantees, this way you are kept abreast of any areas of potential non-compliance when it comes to your decision on how you compare to your competitors. When answering this question, please describe what you are planning and compare this plan to each of your competitors.
F. What steps will you take to ensure quality control?
Quality control is a system of maintaining standards in products by testing them against your product’s quality standards in the business, industry, or against competitors. You will want to keep directly with your written response and findings in a clear format.
Creating a quality control (QC) checklist to your product’s standards should be among the first steps you take to develop an effective QC program. Creating a QC checklist template for all subsequent inspections will help ensure consistency in reporting, results, and standard quality. A detailed checklist can save you a lot of trouble in the long run, as a handy reference to prevent sub-standard or non-conforming products. Please contact a BIG Representative if you would like to have a template developed for your business.
G. What steps will you take when products/services do not meet the standard?
When your products/services do not meet the standard, it is vital to have a process in place to correct them. When this happens and a customer comes back with an issue, it is crucial to know what steps you are going to take to mitigate the issue.
Section 11.0 – Packaging
Here you will want to ensure your product’s packaging is reliable, consistent, and follows all government legal requirements.
H. Describe the individual product packaging that you want to use.
Here you will indicate the source, size, price and payment terms for the supply of packaging. Typically, you will get this information from the suppliers you selected to assist your business. Once you have the information you need from your suppliers, you will detail out the costs for packaging each product.
I. Describe the packaging to be used for shipping in quantity.
Here you will indicate the type of material you are using for packaging, then indicate the source, size, price, and payment terms for the supply of packaging. Typically, you will get this information from your suppliers that were selected to assist your business. Once you have the information you need from your suppliers, you will detail out the costs for packaging each product.
J. Are there any legal requirements for labelling your products?
This is crucial concerning those industries where products might be chemical or medical based. For more information on this, please see the Labelling Requirements set by the Government of Canada.
With all the questions you have answered as they relate to your business’s pricing, you will have a clearer understanding of your business’s Product Development. Please stay tuned for part 11 of this series when we discuss Sales and Distribution.
Download the Building Your Business Plan: Part 10 – Reference & Guide.