Wednesday September 17, 2014
  • I have a great idea, Now what ?
    Blog

    bright idea     Q.  I’ve got a great idea for a new product. I believe it could make a lot of money if I can get it to market. Unfortunately, that will take a big cash outlay. Do you have any advice before I invest all of my savings into this venture?

     

         A.  We commend your entrepreneurial spirit and wish you great success. Before launching your business, we advise you to develop a robust business plan. There are many templates available. Find a good one and use it.

    Below are several questions that your business plan must address. We caution you to be brutally honest. If your idea isn’t going to fly, it’s much better to come to grips with this reality now rather than after you have invested your life savings in the venture. The questions you should answer are:

       ·         What differentiates your product? We assume that your product fulfills a want, need or desire. If it doesn’t, rethink your plans. Sometimes the market doesn’t know it needs your product—that’s fine. Henry Ford said, “If I had asked them what they wanted, they’d have told me faster horses.” The first step is to identify the need your product will fulfill. Then determine whether or not this need is currently being met and if so, how and by whom? Why should a prospective customer buy your product rather than a competitor’s? If you can’t answer this question clearly, concisely and definitively, go back to the drawing board.

       ·         Is there a large enough segment of the market that will value this difference? Identify the segment of the market that values the thing that differentiates your product. Estimate the size of the market segment. Now, reduce the size of this segment by the percentage of people who won’t be willing to pay what you will have to charge to make your business profitable. Can you still reasonably project enough volume to make your business economically viable?

       ·         Is the thing that differentiates your product defensible? If your idea is a good one, you had better know how you will keep a large competitor with deep pockets from copying it and running you out of the market. There are many examples of well healed copy cats overtaking people with good ideas. You need a plan to protect yourself from this. Perhaps you can protect your intellectual property through a patent. Perhaps your idea, for one reason or another, is difficult to copy. What entry barriers are there to keep the competition from moving in? 

        ·         How will you reach the target customer segment with your marketing message cost effectively? Whoever said, “If you build a better mousetrap, the world will beat a path to your door,” was simply wrong. If the world doesn’t know you have a better mousetrap, no one will come knocking. Make sure you are clear regarding how you will reach your target customer segment with your marketing message. You need to have a clear plan for cost effectively acquiring customers. A marketing cost per acquired customer of $50 is no good if you only make $40 on each new customer.

       ·         How can you prove the viability of your idea quickly and inexpensively? You said that it will take a big investment to launch your product. We challenge that assumption. There may be ways to prove the viability of your concept without making the full investment. Outsource manufacturing or make version 1.0 by hand rather than buying expensive equipment. Launch in a limited geography.

    Chances are good that the initial version of your product will fail—most do. Our advice is to fail fast and fail cheap. Launch as inexpensively as possible. Learn from the market’s reaction. Make the necessary changes. Prove that your concept will be successful before investing in a full rollout. You may even need to sell the initial units for less than they cost to make. That’s fine, if you know you can manufacture them at a cost that is sufficiently below the market price before rollout.

       ·         What will your cash flow look like? Make sure that you build a thorough financial model that supports your decision to move forward. We encourage very conservative assumptions. New products most often take much longer and cost much more to launch than you would think. Unless you have a lot of experience launching new products, what you will consider fairway estimates are almost certainly aggressive. If the economics of your product don’t look good with very conservative assumptions, you may want to rethink things.

    Launching a new venture can be exciting and rewarding. It can also be fraught with risk. Honestly answering the above questions will help you make decisions that are more informed.

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I HIGHLY recommend Polly and Doug. They have wonderful insight to help small business owners prioritize and identify strategies for growth and improvement. Wish I had met them 20 years ago!

Sharon Madere
President
Premiere Pet Products
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Doug and Polly, I want to thank both of you! The past few months have been enlightening and overwhelming all at the same time. Your guidance, direction, wealth of knowledge, and wisdom have exceeded all my expectations. No words could ever completely describe just how amazing of a “dynamic duo” you two really are!

Dawn Beninghove, RN, CCM, CRP, PN
Chief Executive Offer
Companion Extraordinaire Nursing Network, Inc.
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My company brought Polly in as a business consultant resource to provide Professional Skills curriculum to our early and mid-career leaders. It was company leadership that brought her in - it was her success with our associates that continued to bring her back! Using her HR and corporate leadership experience and her ability to connect with people at various levels of the organization, Polly was one of the most effective outside leadership development resources I've come across in my Talent Management years. She was extremely reliable and someone that I could trust to provide solid learning experiences that aligned with our corporate value system and talent development goals.

Scot McCarthy
Director of Workforce Development, CENTRA Health
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My team and I have had the privilege of working with Polly on our business. Polly's keen business insight and savvy is something special. She was honest, direct, and tactful about her observations and recommendations for our team and how to grow our business. It was a pleasure having her help us and I would tell anyone that’s serious about growing their business to call Polly. She’s great!

John OReilly
Managing Partner
Base Camp Realty of Richmond, Inc.
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Doug White took on an unfocused operation (in the financial services sector) and created an efficient, centralized system dedicated to excellence.  He did this not by driving change from the top down, but by helping the entire team see how their part of the process could be improved. Doug then mentored us toward effecting the changes ourselves. He taught us all how to bring our “A game,” and how to take ownership and pride in what we do.

Donna Levin
Vice President of Operations
care.com
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I have known Polly for over ten years. As an HR Manager, I have utilized Polly’s training expertise at my former company and with my current company. Polly exceled at assessing the needs of our management teams and tailoring training programs that resulted in visible positive change. I also know I can count on Polly as a resource on any HR topic or bounce ideas off of her when I need a second opinion. Polly has been a mentor to me and I have always appreciated her willingness to listen and offer valuable advice and expertise.

Leigh McCullar
HR Business Solutions Manager
Sheltering Arms Physical Rehabilitation Center
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I have had the privilege of working with Polly White for several years on a variety of projects. She consistently provides clear direction on how to resolve a wide range of employment-related issues. I look forward to my continued relationship with Polly.

Elizabeth Wilkins
Business Manager
Manorhouse Management, Inc.
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