2018-02-12 11:27:26 Starting a Business English Learn about the many different inputs that go into creating a new product from scratch, starting from the initial idea and moving all the... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/02/Team-Brainstorming-About-Inputs-Needed-To-Create-Products.jpg Inputs Needed to Create Products

Inputs Needed to Create Products

2 min read

Inputs, which are also called factors of production, are all the resources you need to take a product from an idea to market. Specific inputs vary based on the item you’re creating — the process of making digital software is considerably different from the one used to manufacture engine components. As you bring a product idea to life, it’s important to consider each part of the process.

Entrepreneurship

Entrepreneurial inputs are some of the most important in the life cycle of a product — they are the intangible energy, effort, and time you devote to the process. A product begins with a single, crucial input: an idea. From there, you contribute different resources, including the mental energy required to develop the initial concept, information-gathering to understand practical limitations, and analysis of the data to make necessary changes. In the beginning, particularly when you don’t have funding, your entrepreneurial drive is often the input that fuels the development process. Down the road, you may also need human capital inputs, which are the skills and experience needed to take the product from one stage to the next.

Labour

As soon as your idea for a product goes from a possibility to a plan, labour comes into play. For many small businesses, the bulk of the labour is your own. You must write a business plan, seek funding, and work with manufacturers or designers to build a prototype. Eventually, other labour resources come into play as your employees and partners make products, conduct tests, check quality, package items, and handle distribution. The labour input category is one of the most complex because it includes a wide variety people outside of your business, including raw material suppliers, the companies that manufacture each component, and product sellers.

Land

Land is a general input category that covers all of the natural items that go into creating a product. At the base level, you need land itself to build offices, factories, or distribution centers. Then, there are the raw-material inputs that come from the environment: oil to act as fuel, trees to build, or sunshine to power solar panels. Other common land-based inputs include water, soil, and geothermal heating. If you’re like many small businesses, you rely on a middleman to secure and process these raw inputs for easier use. Consider lumber: rather than cutting down trees and milling their own boards, most business owners rely on loggers and lumber mills.

Capital

Capital refers to the resources you need to take your product from an intangible idea to a physical item: equipment, buildings, and tools. This category includes the trucks that haul your raw materials, the factories that house your production line, and the warehouses that hold your inventory. If you’re making hand-embroidered works of art, for example, your capital would include fabric, wooden hoops, needles, and thread. Financial capital, or the funds you need to purchase other capital items, is also an important input.

Legal and Social

At different points of product development, you may encounter legal or social inputs. Legal considerations include the laws and policies that impact how and when you produce your items. For many small businesses, other unavoidable inputs include licenses, patents, trademarks, and plant inspections. Social issues, including public opinion and customer preferences, can also impact your product.

Whether you’re manufacturing goods or designing items that exist only in the digital world, you’re likely to encounter a wide variety of inputs. By anticipating and planning for each factor, you can streamline the development and production process.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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