Product Innovation: Idea and USP – Starting your own business #4

Product Innovation: Idea and USP – Do ideas always have to be new? I like to say, “grab something and grab Bluetooth”, a thought from the popular series “The Big Bang Theory”. The series was about the idea that men buy everything as soon as they get Bluetooth. Further thought, innovations can be constantly adapted. But it doesn’t always have to be the latest high-tech, even in the fashion industry, new trends are constantly being adapted and thus e.g. sneakers created, with tiger patterns. Next season, it’s a bright neon yellow. An old product is made new.

Product innovation or expansion

Not everyone can construct a rocket for international space travel. The autonomous driving, perhaps even a number too big for the first company. Much more obvious are business areas that have worked for centuries anyway, such as real estate, transportation, communication, food, beauty, dating, relationships and many more. In all these areas innovations are constantly needed to sell products. Often no new invention is needed, sometimes it is sufficient to renew the packaging or even to create an additional, meaningful extension.

Business idea for real estate agents: Find an apartment via App

In the real estate industry one could build a portal that is oriented to the current trend app “Tinder”. By simply wiping left and right on the smartphone and clicking on the notebook, you can express your interest in a property. The same principle can therefore be adapted. Which apartment do you want? With a Swipe to the left you can say no and with a Swipe to the right you show your interest. The real estate agent can then also view the various applicant profiles from the comfort of his office or real estate agency. Who looks good and fits, gets a viewing appointment for the proposal via app.

What’s the advantage? The broker does not have to issue invitations on the basis of e-mail requests, as happens most often, e.g. through real estate portals. The broker can directly see what the person looks like and gets relevant information such as job, interests and marital status. If you don’t have a business idea yet, your chance! The idea’s still up for grabs. What matters to you is you don’t have to reinvent the wheel. Often it is enough to offer an improved service, a small extension or a new, fresh packaging.

Best Practice Example: Order drinks online

A good example of best practice at present are the new companies involved in beverage delivery. Although there are hundreds of beverage suppliers in every city, online ordering is revolutionizing the consumer market. Simply order drinks online and have them delivered in 120 minutes, comfortably to your front door. That’s what a good business idea sounds like. The beverage trade itself brings the proof of concept directly with it, because beverages have always been ordered in larger quantities. The sensible extension of the online order makes the beverage delivery service accessible to everyone.

Click instead of drag. Brilliant. That should encourage you, because you don’t have to revolutionize the world, business can be done everywhere. Using the example of the online drinks delivery service, best practice shows very clearly what a finished proof-of-concept looks like. The question in advance, what prerequisites must be created for this?

Prerequisites: Development, Rights, Patents and Testing

In order for you to bring your business idea to the market, something needs to be developed, from the van to the e-commerce software? Are there certain rights that need to be purchased, e.g. brand names of major beverage manufacturers for advertising purposes. Has the procedure been tested? Does the process from the first visit to the online shop to the shopping cart, the way to the purchase process to order processing, delivery confirmation, picking order, inventory, delivery and even return? Once your own business idea has been created, the validation process begins. Is the business model as planned viable and profitable?

Is the business model profitable (economically viable)?

As you can already see, this part of the work on the business or business plan consists in particular of many questions, which you ask yourself and of course must be able to answer. Ultimately, you will get a realistic assessment for yourself of what you still need for the state. The requirements are extremely varied, from the right personnel to technology, sales, marketing, sales platforms, design, as well as the equipment of the own office, the location and transport connections, but also the financing must be secured. How much does the project cost and how much do you have to put in a bank account if something goes wrong?

Many see the financing of your project as merely the costs of the first stage, which you will have to face. But more money has to be put aside for growth and new employees, for more storage space when needed, for more products, inventories and of course for rising rents, because in expansion you need space. Follow-up costs which are not considered by many founders in the first moment. Then there’s another point that very few people admit to: Sausage Case! What if my first concept fails?

Company failures: Shit happens

The failure of the first business idea, in its basic form, is part of it for many companies. Only in practice can you learn which factors are important for customers, suppliers and investors. Failure is not the same as failure! Just because the basic model of your business idea is not right at the first try doesn’t mean that your company will go bankrupt. The modification (optimisation and adaptation) of the business model is part of the daily bread of an entrepreneur. So don’t worry, the first idea isn’t always perfect.

Accordingly, the company’s own business model is constantly changing before and during ongoing operations. Don’t worry, it’s normal. 100 years ago the automobile was 30 km/h fast, today there are sports cars that make it to 400 km/h – with Bluetooth! Suddenly the combustion engine is no longer in tune with the spirit of the times. Companies are increasingly relying on e-cars. Business models and products are constantly changing. Accordingly, you must not close your eyes and constantly adapt your business model to the wishes and needs of the market. Again many variables that must be considered in advance and therefore of course also at the start date. A lot of things have to be thought through before they start.

When should I start my own business?

When is the right time to start? The ideal time for the foundation is the moment when you realize that you can earn money with your idea and that you have or have created all the necessary conditions for it or have created until the start.

Creating the prerequisites does not mean signing a rental agreement or hiring personnel, it means taking all necessary prerequisites into account. The decisive question then is: Can the challenges be solved? As soon as you can answer all these questions with a “yes”, you are ready to go:

  • How do I find the right staff?
  • Is my business idea profitable?
  • Do I know the best location?
  • Let sales partners convince you?
  • Can I finance everything?
  • Is there a seasonal dependency?

The right time for the greening differs then whether the respective product is dependent on a seasonal business or not. If the business is seasonal, e.g. a trend product that is particularly popular in summer, you have to build up early enough to be ready for sale in good time in spring, two to three months before the main business. If the products are only produced shortly before summer, it is difficult to market them. Because if they really become a trend, no new ones can be produced in the shortest possible time – delivery failure. Most production nowadays takes place in the Far East. Accordingly, production times and delivery times must of course also be taken into account.

  • Consideration of all prerequisites
  • Basic structure and business model
  • Seasonal conditions

Opportunities and risks: honest assessment

We are still at the beginning and have already got to know so many factors that influence or document the success and failure of companies and make them comparable. Now it’s time to define concretely which three opportunities and which three risks are the greatest for your business model? As an entrepreneur, you also make this assessment of opportunities and risks for yourself, so that you can explain your business model to others quickly and easily, e.g. when looking for investors and asking “in which areas do you need support? This can reveal, for example, deficits in personnel or marketing, which can be compensated for by the investor and his team, for example. So you have 2 x 3 indicators for tasks that definitely have to be mastered (based on the risk analysis) and of course also areas that definitely have to be promoted (because they carry great opportunities for the company).

Risks should always be elementary threats, not just “people don’t like it”. It would be better ‘due to the high prices, the product could find fewer customers through spontaneous purchases’. The same goes for the opportunities, of course; the simple keyword “earn a lot of money” will have no place in the real world when viewed by the bank, business partner, business angel or investor. Better would be also here, “by the low competition in the search machines, fast high positionings can be developed and generated thereby Klicks”.

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