It is no small feat to begin a business and get your product to market. There is a significant amount of hard work that goes into it. However, that is only the first test for your growing business. The real proof of your mettle will be whether you can sustain and grow your brand presence in said market.
Product development can be geared towards the creation of new products or the improvement of existing ones. According to Velvetech, the majority of small businesses opt for the second way. It is a continuous aspect of business that most companies heavily invest in. However, for young businesses, the rigors of research and development can be too costly to bear. Most prefer to play it safe with products that are already performing well in the market.
It thus begs the question, why is product development important for small businesses
Increased Revenue
It is true that research and development can be quite costly. That said, when you do come up with the right product you will increase your revenue streams. Everything you invested in product development will be regained in the long run.
There are two ways through which your business’s income is likely to increase. First, with additional product lines, you will probably be selling more units of products than you did before.
When you offer consumers a variety to choose from, you can cater to a larger demographic hence the increase in sales.
On the other hand, given as you would be producing more, you could advance to a larger scale of production. It would result in lower production costs which increases your profit margin.
Responding to Customer Needs
As customers use your product, they are likely to give you feedback whether formally or informally like on social media. If you hope to build and maintain a loyal customer base, it is imperative that you pay attention to such feedback.
A case study of the importance of responding to customer needs would be wooden docks. For a long time, wooden docks have been the go-to for anyone with a waterfront property. However, they are not reliable during storms or when water levels rise. For this reason, customers are opting for resilient options of docks like Hisea floating docks.
The valuable lesson here is that when you do not take customer feedback seriously, your competitors will. Make an effort to engage your customer base and address their needs. As far as research and development go, feedback is actually a convenient but priceless source of data.
Growth
As you develop new product lines you will also be opening up growth avenues for your business. Increased sales and a larger scale of production will make it necessary to hire additional staff. More hands will ensure that orders are supplied on time and everything runs on track.
Additionally, your improved products may not just attract new demographics of consumers but entirely new markets too. Sneaker manufacturers make for a good example of this. Initially, most of them were focused on athletic shoes but they have gone on to develop fashionable versions. It has resulted in them having a larger international market comprising both male and female consumers.
It is, nevertheless, to be wise about growth decisions. Whereas you may indeed have to expand your operations, do not get carried away. Scale-up within optimum levels of operations to prevent losses.
Competitive Edge
Businesses that are industry leaders are often pioneers that:
- Have a superior product or service
- Built a powerful brand around said product or service
- Continue to innovate and stay ahead of others in the same line of business
It is not feasible for your startup to grow into an industry leader if you remain stagnant. True, a company could certainly produce one key product and find success but chances are you want more for your enterprise. Further, consider that a formidable competitor could easily come into the market and displace you.
If you are to grow and stay ahead of the curve, you need to keep innovating.
Business Ethics
Your reputation is directly linked to your brand. As a small business trying to make a name for yourself, it is essential that you remain fervently protective of your brand. A big part of that will rely on your business ethics such as:
Consumer Safety
It is an emerging health concern that most lifestyle and chronic illnesses stem from the products we consume. Harmful chemicals have been found to accelerate harmful gene mutations among other problematic findings.
To be fair, some of the flagged substances have just recently been found to be unsuitable yet they were acceptable in the past. Still, it would be prudent to go back to the drawing board and develop safer alternatives. Consumers will certainly take notice of such ethical responsibility.
Environmental Safety
For some, the jury is still out on the reality of climate change. Nevermind that it is evident all around us in tragic ways.
Part of being an ethical corporate citizen involves recycling and using renewable energy sources. It is vital that you develop products and packaging that are in accordance with environmental safety recommendations.
Conclusion
Starting a business comes with a long list of hurdles. It can seem almost punitive to begin to think of growth strategies such as product development so soon after finding stability. Nonetheless, it is crucial that you do. After the growing pains of it, you will reap hefty rewards.
