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Determine if your product is profitable before you make it
Written by: Mark GwilliamArticle Overview: However hard you run, you'll still lose the race if you're running on the wrong path. In the same way, however hard you work to start up your business, you'll still end up failing if you started the WRONG business. A business venture revolving on the wrong idea, product or service is certain to fail. The fact that only 1 out of 10 business start-ups survive the 5-year mark should prove this. Before you start your own business, therefore, find out if you are going to be the exception or the norm. Find out by doing the following.
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Free Download - Reveal one of the most frequent mistake why thousands of small businesses flop By Mark Gwilliam |
Determine if your product is profitable before you make it
Identify Your Target Market
The first step is to identify your target market. Who needs your product or your service? The answer to this question will help you answer the question, "To whom are you going to sell your product or service?"
If you can't find an answer to these questions, you should abandon your business idea for a better one.
Conduct a Saleability Study
You can save tons of money if you take the time to do a study on the saleability of your product before you actually mass-produce and distribute it.
A simple survey asking people who belong to your target market (a random sample would be ideal) the question “would you be interested in buying this product or availing of this service in case it becomes available?” could save you from a very expensive mistake.
Conduct a Profitability Study
Your target market may be interested in your product or service, but are they interested enough to purchase or avail of it at your asking price? Thus, you have to analyse how much money and resources you'll need for producing and distributing your product or for offering and delivering your service.
Basically, you want to determine if your product or service can be produced or offered at a cost that will let you sell it for a large margin of profit.
Conduct a Competitive Study
Even if you can produce your products or offer your service at a rate that your target market can afford, this won't be enough if your price is not competitive. Even if your target clients are willing to pay $1,000 for a full online marketing service package, they are not likely to do this if they can get a comparable service for a lower price.
Starting a business requires deliberation and planning. Isn't it much more reassuring to know that you're headed for success before you take the first step? Thus, before you begin your new business venture, let a professional evaluate the profit potential of your business idea.
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About the Author: Mark Gwilliam RSS for Mark's articles - Visit Mark's website  Click here to visit Mark's website   The good the bad and the ugly of podcasting for your business Why its important to have a network of advisors part 2 Why segmenting your customers will help in the long run Am I in the Right Business How to run a successful home based business |
Related Forum Posts
Re: Service Or Product?
- If you are in a hardware business you will have a product.
The production of products has changed a lot in the last 20 years.
Some profitable companies manufacture as they sell product.
For example many personal computers are assembled after the order has been placed.
Very often the computer company has been paid for the computer before the company pays for the components.
I have seen this model in many highly profitable companies.
It is often referred to as "just in time manufacturing."
Re: Do you have to have your own business in order to
- I think you really have to go with your gut feeling. If you think it's a product that you can keep selling over and over (consumer) and never have to worry about not having enough business, then I say go for it. Do one product and do it well. But if the product is something they probably will only buy every 10 years or even just once in a lifetime, then you may be better off thinking the whole thing through before putting a lot of money into it. Most internet marketers tend to sell one product and then have several "up-sales" for the same customer that are in the same line. For example: their logic may be that if they'll buy one book about how to start a profitable pet walking service and it was a helpful piece of information, they'll buy another book about how to expand on that same business or how to teach the pets to walk without twisting the leashes. That's goofy.....but you get the idea.
Follow your passion
- Hi Kevin - I think there is some middle ground here.
If you look at any of the successful entrepreneurs that we've profiled they all talk about having passion for what you are doing.
If your business idea is not immediately profitable I would look at how you can a) either make it more profitable (find another angle) or b) start it part time so you can get something up and running and you can transition it into a full time business as the revenue comes in
Re: Networking
- [quote="2william":1iytxx5u]hi ! i’d like to know more about how else internet may improve your business. More than sell your products online, what is another profitable tool that you find here?[/quote:1iytxx5u]
William: The internet is not only a place to make sells, it's also a spectacular place to generate hype around your product. Through SEO tactics, social networking accounts, and regular maintenance, you could have a thriving community that is buzzing about your product or service. This will in turn, create sales and create awareness about you and your business.
Re: Service Or Product?
- I would say both, service or product may be profitable once you take advantages from the online market. it depends on its performance and particularly the website appearance
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