There is little chance your product will prosper unless you have marketing and distribution plans in place.
It is an obvious simplification, but it is easy to understand the importance of a strong business plan if we compare the marketing of a consumer or industrial product to something familiar like a Saturday afternoon lemonade stand. Basically both business need to be ready for: recognizing a need, considering the competition, organizing finances, developing the product, packaging, distributing, selling, and creating profit.
The major reason potentially successful businesses don’t make it is when the sales effort collides with difficulties that stop forward progress.
As an example there are number of ways a lemonade stand might fail. Too few lemons could result in an inferior product, it might be located on the wrong corner, or maybe the serving cups are too large. A good business plan addresses basic issues early in the process, while there is still time and energy to find a solution.
Information on business and market planning is relatively easy to find and comprehend.
So when a customer comes to Omnica with a viable idea and they don't have a realistic strategy for success, we’re somewhat disconcerted. Other than inadequate funding, it may be the most common error committed by first time inventors, and occasionally, seasoned business professionals.
In the best interest of our future clients we ask questions like:
- Do you have adequate funding?
- What are your expected sales volumes?
- What is your buyer profile?
- Do you have a projected end-user price?
- What is your understanding of the scope of the project?
- Will it be sold through retail distributors, wholesalers, or direct?
- Of the people who show interest in your product, how many do you project will actually buy it?
Day job too? No way.
Finally it comes as a surprise to the uninitiated that developing a new product while maintaining a “day job” is an unrealistic expectation. Professionals will experience the burden of divided mental energy, an excessive “to do” list, and the all too frequent unanticipated issues. Considering the seemingly endless elements of a process that requires vigilant attention, there is simply not enough time in the day to do everything. It’s even true for our young lemonade vendor who tries to balance obligations of the stand with summer’s other enticements. He can’t keep track of the quarters, get more ice and relax on the beach.
"A realistic business strategy considers as many variables as possible and allows proprietors to take advantage of opportunities and face unforeseen situations before they become intractable complications" Ron Sully – Director of Marketing, Omnica Corporation
If you present us with reasonable expectations and comprehensive requirements, working with Omnica will likely be the most composed and least expensive aspect of your entire product development effort.
11 Business Facts You Should Know
1. Your best chance of success is to start with a good business plan.
2. Remember the “2 times rule”: Bringing your product to market will cost twice as much and take twice as long.
3. Begin working with distribution partners early in the process.
4. Development costs are usually less than 15% of a product’s creation and marketing cycle.
5. Big box stores prefer to do business with well established firms who control a line of goods, not just one product.
6. Overseas manufacturing firms require high volumes to stay profitable.
7. The retail price of a product should be at least 4 times the manufacturing cost.
8. Catalogs and home shopping networks typically buy products for 40% to 65% of the end-user price.
9. The best selling price category on home shopping networks is $19.99 to $39.99.
10. It’s difficult to sell a product that’s incrementally better than something similar, but more difficult to use.
11. You’ll have an easier time selling a product that doesn’t require the user to learn a new process or method.