It might be a great idea for your business to add new product lines. This move can help you enter new markets, offer new items of value to your current customer base, boost your competitive positioning against other businesses in your industry, and, importantly, increase your revenues.
These outcomes aren’t assured, though. You’ll need to take steps to study the needs of your target market, your production capabilities, economic factors, and other conditions before folding new product lines into your strategy.
What are the most important considerations?
Before deciding whether to expand your product offerings, you’ll need to assess several factors:
- Your business’s capabilities
- Its current capacity
- The needs of your market
- Whether adding product lines that complement your current inventory or help you expand into new markets could help you achieve important goals
Start with the following questions:
- Does my business have the design, engineering, manufacturing, packaging, and distribution skillsets needed to create and deliver new products? If not, can we afford to add staff or invest in training to improve our skillsets?
- Does the business have the capacity for another product line, or would other equipment lines, storage facilities, or production sites need to be acquired for this product?
- Can the business afford to invest in a new idea, or do I have access to investors, loans, or other sources of capital to make it possible?
- Would introducing a new product be too big a distraction to take on today?
- Does my market have a need for accessories to my product, variations to my product, alternate products, or new sets of products that would help them meet a core need?
There are other factors to consider, too. Ask yourself these questions before making plans for production:
- What does consumer spending look like today, and how might it change during the time it takes to bring this idea to market?
- Is the labor market robust enough so that I can find abundant, quality workers to help me execute this idea?
- What do material prices look like today, and how might changes to those prices impact the profitability of a new idea?
How do I find the right product to offer?
The best products address a clear, definable, common customer need. The need could be real: “There isn’t a product that solves this problem.” Or it could be a call for a solution that brings your customers more joy, more time savings, more monetary savings, more prestige, or a means for improving their lives.
If an idea isn't obvious today, look to your customers, your customer-facing employees, and your vendors and suppliers. You'll likely have your own insights about what will be a win in your market, too. But whether you're ready to engage others or are still grappling with ideas on your own, you can think about the following questions to try spotting common needs:
- What are our customers talking about when considering our products?
- Do our customers want more compatibilities?
- Are our customers mentioning other needs we don’t fulfill?
- What kinds of requests are my sales and services teams fielding that we can’t meet today?
- Are there calls for lower-priced products that may be fulfilled by offering products with fewer features?
To find answers, talk with your employees, suppliers, retailers, product installers, and others who have a first-hand view of what’s going on in your market. Ask what they’re seeing, what they believe your customers would value, and where they see needs going unaddressed.
Then, talk with your customers. Ask for feedback on what they need and value. Ask what they wished you offered. And, ask what matters to them in a solution—and what doesn’t. Your customers’ insights should drive any moves you make to serve them better.
I’ve identified some needs. Now what?
Gather all the needs you’ve identified and choose the ones worth pursuing. You can often find the best ones by weighing your options against the following factors:
- Does this idea fall in line with the mission of our business?
- Will this idea have broad appeal with our target customers?
- Can this idea be produced profitably in the current economy?
- Would this idea help us expand our market and increase our customer base?
- Will this idea help the business to be more competitive in the market we serve?
- How would this item need to be priced to maximize sales and suit our current customers?
- How much revenue could we expect from this product?
- Could we produce it before the bulk of our customers seek out other options?
You can test the ideas you identify with customer surveys, which could be formal questionnaires or informal discussions with your clients, with focus groups, and in some cases, with small-scale trial launches (provided the product is relatively simple to produce). You may even create prototypes to show your customers to gauge their interest and feedback on whether your idea would help them accomplish their goals.
I’m ready to proceed. How do I develop a concept?
You can work with a product designer to design and test ideas. Most will help you create drawings and 3D samples of the items you want to create. Then, when you find a winning idea, your design can help you create a small test batch of products.
You may decide to produce your product in-house, or you can work with an outsourced manufacturing firm that can take on this job. There are benefits to each approach, which you can explore in our article, Should You Outsource Your Manufacturing or Produce Your Products Onsite?. If you already know your planned course of action, the following resources can help you get started:
- How to Find a Manufacturer for Your Products
- Best Practices to Optimize Your Production Lines
- Incorporating Manufacturing Standards in Your Production
Be sure to get your customers’ and employees’ feedback with each iteration you design. Then, choose a model that will have the most impact for your customers, works within your cost structure, and makes sense for your overall strategy.
|Consider getting a patent for any product you design. You can learn more about the process in our article What You Need to Know to File Your Business’s Patent and Trademark Documents.|
What will I need to do to bring the product to market?
Before your first round of production is complete, form a marketing strategy to firm up the following elements:
- How you'll price your new product
- What you’ll do to promote it through the sales channels you use
- How you’ll deliver it to your customers
You can work through this step with a marketing expert who’s experienced in product launches. Connect with your local business incubator or SCORE to find one in your area.
What comes next?
Importantly, you'll need to ensure that your production lines can scale to meet high demand for your product. Have plans in place to hire more production workers, rent or install more equipment, or request more capacity from the manufacturing house you choose to work with.
You should also be prepared to monitor your new product's acceptance in your market. Track sales, collect feedback, and start planning for future iterations that may serve your market even better in the future.
I’m ready to get started.
Log into your owner’s portal for more articles that can help you take on this task. You can also access a free checklist that’s curated to your business to help it grow and scale.