A business can’t be static. In order for it to continue to be successful, it needs to grow and evolve over time. But, a business can’t grow without some sense of direction or purpose. Taking your company to the next level involves careful planning and assessment. Whether you plan on introducing a new service or product or want to break into a new market, it can help to ask your company some questions first.
What is the Competition?
When assessing a new business opportunity, it helps to examine the current market and any current competitors. Are there companies out there who are doing the same thing you plan on doing or who are targeting the same customer base you plan on targeting? Take a close look at those potential competitors. Are they offering the same exact product or service you plan on introducing? Are their customers found locally, nationally, or globally? How loyal and committed are their customers? Do your competitors have any clear weaknesses or strengths? Are their companies performing well financially?
Has the Product/Service Been Tested?
The business world is full of products that seemed great on paper, but failed once introduced to the market. When assessing a potential growth opportunity, it’s important to see how the public and your customers react to the new product or service. You can test products in several ways. One option is to survey your current customer base. Ask them if they have interest in the new product, if they feel they have a need for it, and if they would buy or use it. Another option, which should come after you survey your customers, is to produce a test product or a trial run of the service. Called a minimum viable product, it’s the most bare-bones version of what you’re planning on offering. The goal of introducing a minimum viable product is to gauge the feedback from early adopters or early users. Are people willing to pay for the new product or service, even when it’s at the most basic level? When they use the service or product, does it meet their needs or perform as expected or is there considerable room for improvement? Would they purchase the product once all the intended bells and whistles are added?
Will it Make Money?
You also want to look at how profitable a new business direction, new product or new acquisition will be. How much do you expect to be able to sell the product for and how did you arrive at that figure? How much does producing the item or introducing a service cost your company and how much does it cost your business to promote, advertise for, and market the new product or service? How do you know that customers will be willing to pay $XX for the product?
Does Someone From Your Business Have Experience With the Product?
If you are branching out into a new area, it helps to have someone with some experience in that area on your team. Is anyone on your current team familiar with the product or service you plan on introducing? If you need to hire a new person who does have experience in that area, is he or she a good fit for your team? If you are expanding your company by acquiring a similar business or a competitor, will it be beneficial to keep the current management team at the company or bring in an entirely new team?
Asking the questions above is the just the first step to assessing an opportunity for growth or for new business. Working with New Direction Capital and a virtual chief financial officer can help you plan the next steps for your company. For strategic planning guidance and assistance taking your business to the next level, contact us today.
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