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 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.
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