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8 questions every entrepreneur should ask before launching a new product
By ATB Financial 22 June 2020 7 min read
Successful entrepreneurs will tell you there’s no more exciting—or nerve-wracking—business decision than launching a new product. Getting there takes time and resources, both of which might be in short supply if you’re a small business owner just starting to gain a toehold in the market, or if you’re juggling an already-existing product line or service.
If you do it right, a successful new product could be the lifeblood your company can rely on to remain viable for the long term. The reward lies in the form of an additional revenue stream and enlarged customer base.
Here are 8 questions to ask yourself before you launch a new product:
1. “Does the product match the purpose?”
How will the new product reflect your company’s values and purpose? If the answer is, “it won’t,” then it’s time to go back to the drawing board says ATB Financial’s Kate McKenzie.
“You have to have really crystal clear why you do what you do and every single product you offer should match that purpose,” says McKenzie, who provides coaching and mentoring to aspiring entrepreneurs through ATB X.
A product that’s inconsistent with your company’s values could confuse or alienate your existing audience. It’s vital to have a strong mission statement for your business from the outset, and the introduction of any new product or service should align seamlessly with that direction. Just as a company dedicated to sustainable production wouldn’t think to invest resources into a project that runs counter to such values, your new product shouldn’t contradict your business’ reason for being.
2. “What are the true costs of launching a new product?”
Determining the cost of your new product might be one of the most time consuming of the steps to launching. it This step requires exhaustive research and evaluation of all of the resources required to get to market
Itemize line by line all the expenses required for launching the product—such as materials, design, production, research, marketing—to determine the true costs of the initiative, as well as account for unexpected costs that arise along the way. McKenzie suggests imagining the product already exists, and envisioning all of the steps that would be needed to make it a reality.
“Start with the end in mind and plan backwards,” says McKenzie. “You might find it actually doesn’t make sense to launch this product and you might save yourself a lot of headaches.”
Of course, you don’t have to answer this question along. To determine her financial picture, ATB X participant Holly Singer decided to hire a professional bookkeeper not long after she launched Milk Jar Candle Company in Calgary, which manufactures clean-burning candles made with plant-based materials.
Working with a bookkeeper gave Singer a clearer sense of the company’s financial picture, and the confidence to pursue growth. With no need to do the books herself, Singer now has more time to plan Milk Jar’s long term future. She’s launched new products every year since she started the business.
“I’m in year three of my business and I can see how it’s grown from the start,” says Singer. “I would say [hiring a financial advisor] was one of the best decisions I made.”
3. “When should I launch?”
Once you’ve determined the costs for the new product, it’s time to decide when to go to market. The timing of a new launch is crucial not only for maximizing sales, but to ensuring the company is in a stable enough position to weather the accompanying expenses.
“If you have to make a big equipment purchase or hire more staff, you probably don’t want to deal with large costs for the new product as well,” says McKenzie. “You want to launch at a moment that’s a little bit safer for you in terms of managing your cash flow and making sure that you have enough in the bank to get your idea of the ground.”
4. “How should I unveil my new product to the world?”
It’s one thing to have a killer product or service you’re ready to bring to market. It’s quite another to convince your current and future customers that they need it. Even a great product will go unnoticed if the company fails to get the word out. Create excitement for existing and potential customers well ahead of the launch so that when the product makes it to market, there’s already demand for it .
“It's really important to plan a strategy for how you're going to unveil the product,” says McKenzie. “How are you rolling it out? You want to build some buzz around the launch.”
Building that buzz invariably requires the use of social media. Not only is it cheaper than traditional forms of advertising, it can get the word of your product to the right people, that is those who are interested in buying it.
Singer uses Instagram to tease new candle designs of Milk Jar. She posts daily, high-quality images of her goods to the company’s 18,500 followers. What’s more,the company spends hundreds of dollars on photography for each product launch. For Singer, it’s money well spent.
“Poorly taken photos make your product look bad,” says Singer, who credits Milk Jar’s early success to high customer interest driven from those professional photos on social. of her candles posted on social media.
5. “What do customers think of my product?”
Garnering feedback is a key step many entrepreneurs forget or disregard to their detriment. Asking for that feedback allows you to improve your product before you launch.
You can get customer feedback in many ways. You can tease a product’s existence on social, provide free samples and gauge the response, or survey audiences on what was appealing or not appealing about the product. The more feedback, the better.
“Getting it out there means being able to gather more market research now that could impact how you choose to market and sell your product in the future,” says McKenzie.
6. “How does my product match my customers’ pain point?”
In order for your product or service to succeed, it needs to solve a problem for your customers. Determine your customers’ pain points first, and then consider how your product could offer a solution. In some cases, you may realize that the current iteration of your product doesn’t align with those pain points. You can then go back to the drawing board to refine before spending money trying to convince a customer to buy a product that they don’t need.
“You won’t know your product could make peoples’ lives better unless you understand their uncertainties and concerns,” says McKenzie. “You could spend a ridiculous amount of time trying to sell to people with no interest or need for it.”
7. “What are my competitors doing?”
Avoid a costly and ultimately fruitless expansion into an oversaturated marketplace by keeping an eye on your competition. Knowing what markets your competitors are in gives you an opportunity to find a less cluttered venue in which your products can shine. Sometimes that means looking beyond the obvious markets or niches. McKenzie recalls a conversation with a photographer who joined the board of directors for a hotel association despite having no obvious experience in the industry.
“There were no other photographers on the board, which left him without any competition when those hotels needed new photos to be taken,” she says. “He went to where there was a need but wasn’t overly saturated with his competition, so his chances of attracting business increased massively.”
8. “Can I get my goods to market now?”
Even with all the market research in the world, you may never be 100% certain that it makes sense to launch. The key question to ask is whether the product is viable enough to make money now.
If the answer is yes, it’s time to launch!
“It's not worth it to spend time trying to make things perfect,” says McKenzie. “Your goal is to make money, not to be a lifelong researcher of your product. Get it out there, collect feedback and make it better and better. “
Reach out to one of our entrepreneur strategists to explore where you are with your business, where you want to be, and how to get there! If you’re looking for a deep dive on everything you need to know around how to grow your business, our ATB X Accelerator program might be just the place for you.