When your small business discovers you can offer a new product and requires a channel to sell it, the right strategy must be adopted to garner optimum results and a balance in cash flows. This allows a business to exercise its efforts in a planned and systematic manner that enables small businesses to get the most of their offering. Here are five steps that you should follow to build your new product:
Develop proof and document your product:
You should document your ideas with concrete proof in a way that relates to the product and its functioning. Ensure that you have your patents in place. Note down your ideas in a journal, follow up on the patent process and complete the documentation of your product to ensure that it is a product of your company. This is the first step in securing your product and building a system that will allow for the smooth flow of cash into your business.
Research your product:
For a new product, it is imperative that you research your idea from a legal and business standpoint. Before you file a patent, you should complete an initial patent search and research your market if there are potential people that would buy your product.
This allows your business to cash in on the highest saleable value of your product by allowing your product research to give you the confidence in setting the price. In turn, the maximum amount would be recovered from sales and help in boosting your revenue and cash flow index ratio.
Create a prototype:
Ensure that you have made a prototype before you file for a patent. In the process, you will discover flaws in your design or think of ways to develop new features. Consider this; if you patent your idea before all the mistakes are addressed, there is a high probability that your patent may lose its rights over a new design.
This issue can be attended to by creating a drawing, a concept, and a mock-up. In time, you will save your small business from unnecessary cash expensive, and maintain a more favorable cash flow that can be used to grow and diversify your business.
Finalize your product and file a patent:
Once you have finalized and accounted for all the changes and added features in your product, you should file a patent. Small Businesses can choose between a Utility patent (required for the development of new processes or machines) and a design patent (required for the new manufacturing or ornamental designs). Take the help of a patent attorney or agent to look over the application. Before you file it, look for loopholes and other methods that others use to infringe on your patent to avoid legal problems in the future.
By doing so, you can reduce the capital expenditure required to account for product and assembly-line changes that can be minimized once you finalize and patent your product in its nascent stages. This enables you to plan your cash flow expenses and allow for a steady flow of cash into your business on account of the sale.
Take Pre-Orders and market your product:
One of the best launching strategies for a product is to release the product and take pre-orders before it is out in the market. All pre-orders that have been shipped are considered as sales only on the date of launch.
Determine the best pricing for your product and research is based on how many prospective buyers sign up for your product. Subsequently, you will need a business plan to address issues relating to cash flow, manufacturing location and mode of sale.
This will allow you to boost the visibility of your product, increase cash flow earnings and improve sales lines. It would enable your small business to run a tight ship in terms of spending on cash payments and in turn, you can position your business with a favorable cash flow index formula. In time, you can decide on whether you should sell the product on your own or license it to others for a royalty fee.
These simple steps will help you go a long way in the creation of a new product and a favorable cash flow. New products usually take time, from the point of conception to the final consumer buying them off the shelves, to make a profit. But the road to progress can be planned and altered until you meet the right marketing and product mix that will propel your product to greater heights.