A small business that doesn't constantly update its products and services is likely to come up short. This means you'll need to flex the gray matter and develop new offerings from time to time. However, doing so requires capital – something that’s notoriously difficult to hold onto. The solution is to use the resources you already have wisely, including your own time and effort. You’ll need to plan ahead as much as possible, and make sure that every penny is put to good use when developing a startup budget and marketing plan for your new products.
This post will look at the process of budgeting for a new product or service more closely. We’ll explore how to develop both the idea and the product itself, and discuss how you should approach marketing and promotion. Let’s get started!
Step 1: Create the idea for your product or service
The first step for any budding small business owner is to turn your spark of inspiration into a marketable idea. There’s a basic workflow to follow here: first you’ll have an initial concept, and then you’ll develop that concept further through planning and research.
This stage won’t always be fun, but it’s absolutely vital if you want to see real results.
Without a clear plan or goal, after all, you can’t set a reliable budget.
Plus, throwing money at a project you haven’t planned out is likely to lose you money.
If you’re starting from scratch, you’ll need to become familiar with ‘idea conception’ and ‘concept’ statements. In other words, you need to learn how to come up with a strong idea, and then sum it up in a few words.
Brainstorming ideas based on user needs and problems is usually a strong start.
Then you can develop a concept statement, which will turn that idea into a handy soundbite you can refer back to when making decisions. This step won’t impact your startup budget much, since it has very little cost other than time. Of course, if you have money to burn, you can find outside resources to help with this phase. However, putting in the effort yourself is usually a better approach.
Step 2: Test the market within your startup budget
There are plenty of ways to get your concept out into the world. Focus groups and customer surveys are stellar ways of getting opinions from actual people about what they want from your business. These techniques can also be cheap to set up and implement.
However, we’d also recommend creating a Minimum Viable Product (MVP). In a nutshell, this is a bare-bones version of your product, made very cheaply and designed for ascertaining the public’s level of interest.
While surveys and focus groups discuss the viability of something intangible, an MVP is an actual scaled-down product people can interact with.
For example, you may have thought about designing a new style of T-shirt, but you don’t know if there’s a demand. You could print of a batch of cheaper quality, “limited edition” shirts for a lower price than usual, on the promise that you can ask for some feedback from buyers. Based on that feedback, you can refine the final product (or abandon the project if there’s little interest).
Essentially, an MVP is a public sandbox for:
- Ascertaining whether there’s demand for your product
- Refining its features
- Deciding on its scope, scalability and growth potential
Since this is a lower-cost way of determining a product’s viability, it will often be your go-to method for development. However, keep in mind that you’re still actually developing, marketing and providing support for a product. While the costs will be lower than what they’d be to produce a full product, you’ll still need capital.
Finding the funds for an MVP can take just as much effort as for a full launch, so reserve plenty of time for that process.
As for actually developing your MVP, you’ll have carried out some of the necessary steps already. For example, you should have already determined what your customers want and how you can meet their needs. All you have to do now is make sure that your MVP only contains the most necessary features, conduct a brief testing stage and then launch the product.
Step 3: Choose your marketing channels wisely
Once you have a tangible product to test, the final step is getting it in front of people. This shouldn’t be an area you scrimp on. Without eager customers who have been primed to buy your product, the previous steps will all be for naught.
While larger businesses often have six- or seven-figure marketing budgets to play with, those kinds of resources aren’t necessary. There are plenty of low-cost or completely free ways to let people know your product exists, with a potential reach of millions.
For example, social media is a wildly popular avenue for marketing. Given its relatively low cost compared to its potential reach, social media should serve as a key pillar of your marketing strategy. Your email newsletter can also form a foundational part of your promotional efforts, so if you don’t have one, you may want to set one up immediately.
Newsletters enable you to reach thousands of qualified customers directly, and are very cost-effective.
Finally, paid promotion is also worth considering, as it can speak to customers you wouldn’t have been able to reach previously. This is more pertinent on social media, since platforms such as Facebook’s algorithm restrict how many people can see your posts. To reach all of your followers, you’ll usually need to shell out a little cash, so make sure your startup budget uses these resources wisely.
When running a small business, you don’t ever want to become complacent. Creating new products and services is key to prolonged growth and success. However, coming up with the funds for those ventures can be tricky, which is why you want to carefully plan out your development time and startup budget.
In this post, we’ve looked at each stage of the development cycle – the conception, development and promotion of your new business offering. The key to success is to come up with a solid idea for a new product or service, create an MVP to test it and then choose your marketing channels carefully.
Along the way, you’ll find you don’t have to spend big in order to produce results.