When you’re on the brink of starting up a business, you may be confused about whether or not you’ll start from scratch with developing new products or perhaps sell already existing products that are in demand where you are. The easier way is, of course, to sell existing products. But if you’re up for the challenge, this is a better road to take as there are many advantages that come along with developing products from scratch.
Developing new products starts with an excellent and trustworthy product development strategy. This means building a foundation for the creation of new products. In some cases, it can also refer to improving the performance and quality of existing products. When you decide to create new products, it’s not something that a business can immediately jump right into without putting much thought and effort. Planning is crucial to minimize possible costly mistakes.
Generally, the benefits of new product development include an increase in revenue and maximum profitability for a business. It can even refer to a rise in your company’s competitive range. In totality, it helps companies better achieve their respective goals.
Learn more about the benefits of new product development for start-ups by reading through below.
1. Helps Set Measurable Goals For The Business
Every business always has to start with the creation of measurable goals. This refers to your direction. Where do you envision your business to be in five years? What’s your standing in the market three years from now? Setting measurable goals for your business works better when you’re also in the process of developing new products.
The creation of products also generally entails setting goals. What is it that you wish to achieve through creating these products? Why are you creating them in the first place? Doing this helps your business gain a brand-new perspective on success. It also enables you to focus more on creating products with features that your customers will need, not those that your market won’t even get to use or appreciate.
Learn more about product development and setting measurable goals here.
2. Breeds A Culture Of Innovation
One of the characteristics of entrepreneurs is that they’re innovative beings. They’re always on the lookout for new products to create and sell to the public. But if you’ve gotten so used to merely reselling products that already exist, going back from scratch will be difficult. This is because your team isn’t used to it, and it can be hard to develop new cultures or practices when the whole team has already gotten used to something else.
With new product development for businesses that are still starting up, right at the beginning, you’ve already started the culture of innovation. Every member of your development team is trained to think fresh and find new ideas. Rather than settling for products that already exist, they strive instead to bring something new to the market all the time. This is a good company culture that will encourage creativity.
3. Improves The Performance Of The Business
In every business period, companies always study and double-check their performance. This performance evaluation helps businesses position themselves better, such that they’re able to take note of their strengths and weaknesses. If you’ve recently discovered that your business has been slacking a bit on its performance, then perhaps it’s time to consider an overhaul. Change up your strategies, and even the products that you’re putting up for sale.
Are your products staying longer on the shelves than they’re supposed to? If there’s a lot of product wastage, this means that your products aren’t marketable enough. You have to either tweak your existing products to present better versions or create new products altogether. The better route to take is the latter.
Selling fresh ideas in the market can help improve your performance. This stems from the fact that you’re the only business at that moment that’s selling those products. Since you’re the only one, you’ve got full control over the market, and competition won’t be as stiff. If other businesses follow suit and sell similar products as yours, they would have to compete with you instead of the other way around. This means that your business is the one setting the standards.
Other advantages concerning improved performance include:
- Identifying performance considerations that are most important to the market that you’re trying to penetrate
- Charging higher prices for your products
- Increasing revenue
4. Adds Value To Customers
When you create a product that offers a new solution for your customers’ existing problems, you are, in essence, adding value to these customers. You’re making them feel like you care enough about them to offer better and smarter solutions. Naturally, the first goal is for you to earn a profit. But with presenting new products regularly, you’re hitting two birds with one stone by also making your customers feel valued.
For example, when you offer products that are the same as those sold by other businesses, you’re not giving your customers enough reason to spend more money and trade their existing items for the one that you’re selling, even you offer lower prices. Generally, consumers will continue buying from the older brand that they’ve long trusted. As a business that’s only starting, you’re putting yourself in a more delicate position.
By presenting new products, you’re giving customers a reason to spend on you. There are better features, brighter and fresher ideas, and many other factors that will strengthen their desire to buy what you’re selling. This adds value to the customers that you wish to target.
5. Improves Your Overall Business Reputation
When you’re a start-up, your reputation is crucial. You can’t make the mistake of starting off on the wrong foot, or else it’s going to be even harder to position yourself competitively in the business industry. With new product development, you have control over every stage of product manufacturing, which means you also have more control over the quality of the product.
When you’re merely reselling products that have been manufactured by another company, you have very little to no control over quality. The products have already been entirely made when you purchase them for resale in your business. If it’s found to be of poor quality, the manufacturer won’t be the one to suffer, but your reputation as the business selling it.
The opposite is true for new product development. Because you’re able to supervise each stage of the manufacturing process, you’re more assured that these products are of good quality by the time that you put them up for sale in the market. This lessens the chances of committing the costly and sometimes irreversible mistake of selling poor-quality products.
6. Creates A Better Society
Thinking that you’ve got no value to offer to society today is a mistake. Despite the presence of millions of products that are up for sale, providing better and more efficient solutions is still a necessity. Not all products on the shelves of today’s stores serve a useful purpose. Many are just copies (some bad ones at that) of other things sold.
With new product development, your company is better equipped to address the corporate social responsibility that businesses are generally bound by. You’re contributing to the creation of a better society by offering more useful products that provide breakthrough solutions, thus making the lives of the community that uses it better and more comfortable.
7. Increases Competitiveness
Businesses that are still in the start-up stage generally have a lot of catching up to do in terms of competitive ability. Because you’re still building a name for your business, it’s nothing but natural for you to compete. Many existing businesses have long made successful names in the industry but that doesn’t mean your efforts will be for naught. With new product development, you’re able to increase the competitiveness of your business in the following ways:
- Offer products and ideas that have never been sold before.
- Focus on cost-reduction in the development of new products. With this focus, you’re also able to improve your profit margin by having a higher chance of getting more items sold compared to if you were to price them excessively.
8. Ensures The Lifespan Of Your Business
Apart from the competition, one of the problems that businesses also have to face involves its lifespan. Many companies now come and go because they’re unable to stay stable in very volatile industries and situations. This ultimately leads to the early downfall of businesses. That’s a lot of financial loss right there as, in most cases, the capital has not been gained back yet.
When you create new products, you’re effectively increasing the lifespan of your business. The lifeblood of any company, aside from its employees, are always new products and services. If you’re unable to provide anything new, you’ll be swallowed up by those who do. Customers will only get bored with your business if you keep selling items that other stores already have. When you’re presenting fresh ideas, you also stay fresh in the industry.
Developing a new product is similar to the process of giving birth. It takes time and a lot of nurturing. For other businesses, this also means creating upgraded and better versions of their existing products. But if not handled properly, it can also entail serious risks. But with hard work, research, and careful planning, these risks can be overcome by the many advantages that new product development brings. With new products, you’re presenting something fresh and innovative to your market. In essence, it’s like providing unique solutions to even the oldest of problems of your customers. While it may seem like a more difficult option, opting to develop new products will also allow you to reap all of the benefits mentioned above.