Launching a new business or product can be very exciting. You have the drive, have set ambitious goals, and are ready to turn your idea into a success. The sky’s the limit!
While passion and hard work are important, launching a new business requires in-depth planning, making key financial decisions, and making sure that certain legal steps are complete. Here are some steps to help your dream become a successful reality!
Conduct Market Research
It is easy to overlook this important step. No matter how great your idea is, if there is no demand for it, there is no market. Market research will tell you if there’s an opportunity to turn your idea into a successful business. Market research combines consumer behavior with economic trends to confirm your business idea and help find customers.
It’s crucial to understand your consumer base from the outset. If done properly, it can give you a leg up against the competition. Gather demographic information to better understand opportunities and limitations for gaining customers. This could include population data on age, wealth, family, interests, or anything else that’s relevant for your business.
- Demand: Is there a desire for your product or service?
- Market size: How many people would be interested in your offering?
- Economic indicators: What is the income range and employment rate?
- Location: Where do your customers live and where can your business reach?
- Market saturation: How many similar options are already available to consumers?
- Pricing: What do potential customers pay for these alternatives?
You’ll also want to keep up with the latest small business trends. You can do market research using existing sources, or you can do the research yourself and go direct to consumers.
Understand The True Costs of Your Products
Buy a product at a certain price, sell it at a higher price, and you’ve got profit – right? Well, unfortunately, there’s quite a lot of elements that go into the price you buy a product at, and if you’re not aware of them, they can significantly eat into your profits. Working out the landed cost of your products is a fundamental part of business, so what exactly is it?
What is Landed Cost?
The landed cost of a product is the total price of the product once you have received the shipment of it. It might seem simple, but there are actually a lot of different elements that go into the landed cost. Shipping costs, insurance fees, and taxes can vary greatly, meaning landed costs can be unpredictable and cause headaches for businesses. You want to keep your landed costs as low as possible in order to boost your margins, but keeping track of all your landed costs can be difficult.
This is the price you pay your supplier for each unit. Although this might seem very simple, it isn’t necessarily so. If your supplier is based abroad, then you have to factor in currency exchange rates, which can make the unit cost quite variable.
The shipping is a massive part of your landed cost. Transporting goods around the world is an expensive business, and it’s going to add significant cost to your landed cost. This is one of the main reasons for buying large quantities of items.
Imagine if you buy 10 units for $100 but shipping them costs $200. Your landed price before you factor in other fees is $30 a unit. Now imagine you buy 100 of the same unit, totaling $1,000 and pay $600 for shipping. Suddenly your landed cost has come down to $16 a unit.
Finding the right shipping solution can have huge consequences for your ability to sell a product because it plays such a big part in landed costs.
As we often see in the news, international trade is a delicate subject. Whenever you ship goods internationally, there are rules and regulations that need to be met, and often tariffs that need to be paid.
There are a host of fees that start to rack up during this process, and you can expect to pay customs taxes, VAT, customs duties, levies, and harbor fees. Sometimes you even get to pay for the privilege of having your goods inspected.
All of these fees start to add up, and this is before you even get your hands on your products and can begin to think about selling them. When you add all this up, your landed cost starts to look quite different from your unit cost.
When you’re shipping valuable cargo, you’re going to want to make sure it’s insured. You’re shipping something across the globe, and during that process, items can and do get broken and lost. In order to protect your investment, you will want to get insurance, once again adding to the landed cost.
Market Your Product at a Trade Show
Launching a new product at a trade show is one of the best ways to maximize exposure and connect directly with consumers. Trade shows offer a great opportunity for you to showcase your products to potential customers and build connections with other complementary businesses.
One of the advantages of a trade show is the media coverage that can highlight your product. Create a media press kit and hand them out so you can draw media interest. Having the local paper or industry publication write about your product can be the exposure that you need! You can give a demonstration of your product, hand out samples, and get direct feedback from people.
An important aspect of trade shows is finding the right one for your product. There are thousands of trades shows around the world, one that features different industries and products. Perhaps the most well known is the Consumer Electronics Show, held in Las Vegas every year. Is your product a kitchen and dining, garden and outdoors, or other homewares item? Research the nearest gift fair 2020 and book a place.
A trade fair acts as a showcase, but keep in mind this goes both ways. Customers see what you offer and you see what they want. Take this information back and if needed, continue to improve your product to find a competitive advantage for your small business.
Find Complimentary Business Partners
Partnering with another company is one of the most effective ways to launch a new product. It can grow your business by instantly expanding your customer base. Strategic partnerships can help allow you to provide more value to your existing customers. It can also give you a competitive edge and increase your profit margins.
Working with other companies can give you leverage for lower costs on goods, gain valuable feedback to improve your product, and gain exposure to a new market. Regardless of the size of your business, strategic partnerships can help you share best practices and marketing channels.