Dear M & M:
I am considering taking on a new product line. Anything I should consider before I take on anything new?
Besides money, time seems to be one of the more valued assets business owners face daily. We never seem to have enough of either. Are we making good use of our time and money?
Could we spend our time on customer service and generate more sales or profits with what we already have. One always has to measure if the money being spent on adding additional product lines is money well spent?
What is the purpose of the additional product line?
Is it to generate more traffic, increase sales or to increase bottom line earnings?
We should always be looking to increase our offerings in any market. New products and being the first to launch a new product in any market has rewards and risks. Many of the risks can be mitigated if one looks before they leap. Is the distributor reliable, is this new product tested and does it do what is claims to do?
Return policies, pricing, cost of goods, service after the sale are all things that need to be considered. Is it replacing an existing item that is just taking up valuable selling space?
Maybe, it is going in a spot that has been underutilized all along. There are two concepts to consider. One is called the bird in hand. Is there something you already have that you haven’t taken advantage of that one could spend more time on?
Like the example of spending your time on rolling out a great customer service campaign. The second concept is affordable loss. Don’t risk anything you can’t afford to lose. Let’s say you buy 10,000 widgets and they don’t sell. Can you afford to lose the money, time, floor space, and everything else you will need to do to try and sell 10,000 widgets?
Maybe you could try 500 and see how they do first. Don’t forget the value of adding new product lines, increasing and expanding will draw new customers. Test the market, ask your customers, and do what you can to mitigate any risks you might see. Spend some time thinking on a few of these concepts and you will find more money in your pocket at the end of the day. Maybe we can talk next week about finding the time to spend it.
To ask your questions: Call the Small Business Development Center(SBDC) at Cochise College (520)-515-5478 or email firstname.lastname@example.org or contact the Sierra Vista Economic Development Foundation(EDF) at 520-458-6948 or email email@example.com