return to homepage

Posts Tagged ‘product development’

Is Now the Best Time to Start a New Business

Wednesday, October 8th, 2008

by: Geoff Ficke

I am often asked if these are good times for new enterprise opportunities? Should I wait? Is the economy down? Is it a good funding market? Is competition too intense? These, and dozens more stated concerns are nothing more than self-imposed hurdles to movement.

Now is the best time in history to start a business, launch a product or offer a cutting edge new service. More people than ever before have jobs. More people than ever before own homes. More business incorporations are established each year than the previous year. Global prosperity is galloping along, with formerly poor countries like China, India and Malaysia, seeing spectacular growth (potential new customers for new products and services) in the middle class.

Much of what I just stated might seem at odds with the media presentation of a struggling economy. The mass media knows that bad news sells. It is in their interest to report the problems of General Motors, layoffs, health care benefit cuts and downsizing while ignoring the spectacular growth of jobs and small business more than making up for the fallen old lions of industry. Mass media has a goal of keeping readers on edge; uncertain about the future and discontented. Pay no heed, do your own research on current market conditions if this is a concern.

The opportunity to successfully start a small business, market an invention or new service is always dependent solely on the value, novelty and benefits of new offering. If there is an under-served market segment and you can identify a niche in a large market category, the time is always right to move ahead.

For many years I called on large national department store chains. Buyers always had a reason why now was not a good time to place an order. “Easter is coming”. “We have inventory next month”. “Let’s see how next weeks sale goes”. Always excuses. Meanwhile inventory on hot items was low and sales would be lost. It is the same with inventing excuses to delay an entrepreneurial opportunity.

My advice to students, clients and inventors is simply this: “Time is never an entrepreneurs friend”. I saw an entrepreneur lose a multi-million dollar contract purchase with Home Shopping Network by three days. Initial hesitation, self-imposed hurdles, lack of focus and mistakes in the development process caused needless and damning delays. HSN was fed up and placed the order with an inferior but better organized competitor. The loser of this race never recovered. The winner does over $20 million annual turnover with HSN and has built a strong international business. It is maddening to me how often delay equals opportunity lost.

Do not delay movement to commercialize an opportunity based on short- term business conditions, perceived or real. For example, interest rates have been historically low for the last several years. Recently they have begun to inch up. How high will they go? What effect might the rise have on ultimate success for my venture? No one really knows the exact answer. We only can state with certainty that rates go up, rates go down. Look at the historic averages and anticipate that these averages will hold true to form. Base your financial assumptions on the mean averages, but do not delay movement on a great idea because of uncertainty about one element. Remember; if rates go up, they rise for your competition as well.

Also, do not listen to negative nannies nit picking your project. If you have done an effective job of due-diligence, can identify your market niche as being under-served and can quantify an excellent financial proposition you probably have the makings of a successful business. You will certainly know more than the critics. It is easier for people to be negative than to encourage your interest in taking a risk. Risk equates to possible failure for most people. You will be changing your life and most people instinctively fear change.

I always encourage seeking advice from friends, family, valued experts and independent counselors. It is important to know as much about your projects strengths and weaknesses as possible before committing your energy and resources. I also know that successful entrepreneurs almost always have an inner compass which sorts through the mass of concerns, objections and negatives they receive. It is always easier to say no, not move forward, than to commit and push ahead.

America is teeming with dreamers and doer’s, all hoping to succeed in a cluttered, very aggressive marketplace. Delay is never a wise course of non-action if your project has real legs and commercial viability. Somebody else is potentially working on a directly competitive product. You can not afford to lose a first to market advantage because of dallying and uncertainty about entering the market at the optimum time. There is never a perfect time to start. There is only now, and now is plenty good enough.

The Most Common Mistakes Entrepreneurs Make and Why Markets Tolerate No Shortcuts

Wednesday, March 7th, 2007

by: Geoff Ficke

The question I receive more often than any other is: “What is the mistake you most frequently observe inventors or entrepreneurs making?” The answer is an easy one. Most unsuccessful entrepreneurs try to get to market by taking shortcuts.

We live in a commercial maelstrom. The marketplace is constantly churning, changing, adapting. Successful marketers are constantly adjusting, anticipating, re-inventing. Opportunity for product launches entering this market has never been greater, but there is zero tolerance in this highly cluttered environment for half done, distorted product or service offerings. The commercial markets will simply spit out these otherwise, potentially powerful possibilities.

How do we define a shortcut and why does each definition disqualify the product from successfully positioning itself in the contemporary marketplace? Here is a list of some of the most basic shortcuts we see entrepreneurs attempt to circumvent.

  • No Patent, Trademark, Copyright Filing

Typically the cost of filing and utilizing a patent attorney is the principal deterrent. Many entrepreneurs attempt to fill in the blanks on a template available from bookstores or the inter-net and self-file. We have never, never seen this avenue succeed. There is a reason that patent lawyers practice no other type of law. This is the classic specialty practice. Investors, partners or licensees want to know that the idea they are reviewing has protection.

  • Amateur Prototype or Design

Professional quality, shelf ready prototypes are an absolute requirement when seeking to place, sell or license a product opportunity. The 3-dimension CAD art is also crucial in patent submissions and creating the cost of manufacturing the product. Occasionally the inventor has the skills and equipment needed to successfully create this absolutely crucial design element. However, we usually see amateur attempts to avoid the cost, time and research necessary to properly render the features and benefits of the product or service. This is an opportunity killer.

  • Fictional Sales Model

Inventors are passionate about their creations, and passion is important. However, they often do not properly research the size of their target market, competition and create a sales model that is supportable and believable. What is a sales model? A sales model is a quantified, qualified, well-researched formula to extrapolate the realistic sales potential for an opportunity. Knowing the dead net cost of goods is absolutely essential in establishing a believable sales model. What is the demographic for the product? What is the competitive overview? How does the new product differ in features and benefits from competition?

During year one, two, three, how many store openings will realistically be obtained? What will be the annualized turnover per door? Will there be international sales, kicking in when? A fictional sales model is tantamount to opportunity murder.

  • Let’s Guess the Cost of Goods

It is amazing that learning the absolute cost of goods (COG) receives such short shrift. This number is to a product as blood is to life. If COG is too high, a product has little chance to compete. A low COG, with uncompromising product quality, is essential for success. Each element of a product or service needs to be included in a supporting Bill of Materials with costs extended to fractions of pennies. These are then totaled. Then add costs of freight, customs and duties (if offshore production involved) to obtain a dead net COG. Dreaming, wishing and hoping that COG is accurate is a dead giveaway that the inventor has taken deal-killing shortcuts.

  • This Opportunity Does Not Need a Business Plan!

These are famous last words. No modern home is built without an architectural drawing. A cell phone is designed around highly technical engineering models and art. Retail stores are painstakingly designed and planned. And yet, entrepreneurs, all too often, either will not recognize, or will not commit to writing a customized business plan. Again, an inter-net template is a waste of time. We receive hundreds of Business Plan submissions annually. We are still waiting for the first exciting, comprehensive plan that would be a candidate for funding, license or sale that came off an inter-net download template. This route screams shortcut and lack of serious commitment.

These are only a few of the most common shortcuts we see entrepreneurs regularly take. Most disappointingly, the shortcuts taken will kill otherwise excellent start-up opportunities. There are thousands of new opportunities chasing a limited amount of new enterprise funding dollars. Matching invention and success will not be achieved, no matter how revolutionary the new item, without presenting a fully researched and vetted package for market consideration. No Shortcuts Allowed!
Continue reading “The Most Common Mistakes Entrepreneurs Make and Why Markets Tolerate No Shortcuts”