Small business tips: turning your business dream into reality
By Neil Purssey
Guardian Professional,
Back in 1993, during the last recession, I wanted to create a product
that would beat the boom and bust of business. I walked past one of
those gimmicky plastic flowers that danced when music played. It was
then I had my brainwave. If plastic flowers can dance to music, could a
door react to a fire alarm? The first of our intelligent products was
invented – Dorgard, a door wedge that holds open fire doors but closes
automatically when a fire alarm sounds.
Fireco is now 20 years
old. It still prides itself on bringing innovative ideas to market and
giving real solutions to its customers. Here are my tips on some of the
steps to take a great business idea to reality.
Getting the cost and price right is one of the key ways to become successful. Sometimes thinking big and buying large quantities helps keep unit costs down, yet buying in bulk can be a false economy if you can't sell your stock. So carefully plan your production runs and sell through rates, and try and get an indication of forward orders if you can before you spend your money on production.
If design is involved and it is straightforward, sometimes using smaller or independent designers rather than well-known prestigious outfits can keep costs down. Make sure you understand the manufacturing process of your product. Production management should keep track of how many units need to be made in the first instance. How much raw materials are needed? How much production time is needed? Making sure you have agreed all this upfront ensures you do not pay for extra time or access raw materials from the manufacturing process.
Looking abroad for production can sometimes be cheaper, but remember to factor in duties and other international charges such as bank fees for paying in foreign currencies, shipping and other such costs which can sometimes be hidden in an initial quote.
Although compromising on quality should never be on the agenda, often compromise is needed to ensure you get your product to market. Like buying a house, you might need to decide between location and size of the property. Often you will need to compromise somewhere along the line to get your product to market.
A top specification may not be right for a mass market product. Or maybe the cost of packaging is squeezing the profit margins. Sometimes getting it right needs a little evolution, so don't be scared of change if that's what is needed.
If you have the idea, make sure you have a technical person in the company too who can balance the "what" with the "how". Pushing the boundaries is good when it comes to invention but making sure it really is feasible is also important. Ensure you have the great idea and the expertise to put it into practice. Some of the best partnerships are formed by those who hold opposite skills.
Alexander Graham Bell invented the first telephone in the 1870s, but it didn't really take off as a household item until the 1940s, nearly 20 years after he had died. Likewise, barcodes were first conceived as a kind of visual morse code by a Philadelphia student in 1952 but retailers were slow to take up the technology. It was 20 years later, in the early 1970s when the same student, Norman Woodland, then employed by IBM, devised the Universal Product Code, which now appears on almost everything we buy.
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A great idea is the first step to success, but getting your product or service to market requires more than just blue sky thinking. You have to be willing to persevere and go the distance if you want to see your product become a success
Back in 1993, during the last recession, I wanted to create a product
that would beat the boom and bust of business. I walked past one of
those gimmicky plastic flowers that danced when music played. It was
then I had my brainwave. If plastic flowers can dance to music, could a
door react to a fire alarm? The first of our intelligent products was
invented – Dorgard, a door wedge that holds open fire doors but closes
automatically when a fire alarm sounds.Profitability
Make sure that the product specification comes at a cost that allows you to sell on and make a profit. So many initial inventions are really expensive and this limits their market. It is only when something can be accessible to its target audience that you can really drive a new market.Getting the cost and price right is one of the key ways to become successful. Sometimes thinking big and buying large quantities helps keep unit costs down, yet buying in bulk can be a false economy if you can't sell your stock. So carefully plan your production runs and sell through rates, and try and get an indication of forward orders if you can before you spend your money on production.
If design is involved and it is straightforward, sometimes using smaller or independent designers rather than well-known prestigious outfits can keep costs down. Make sure you understand the manufacturing process of your product. Production management should keep track of how many units need to be made in the first instance. How much raw materials are needed? How much production time is needed? Making sure you have agreed all this upfront ensures you do not pay for extra time or access raw materials from the manufacturing process.
Looking abroad for production can sometimes be cheaper, but remember to factor in duties and other international charges such as bank fees for paying in foreign currencies, shipping and other such costs which can sometimes be hidden in an initial quote.
Don't compromise on quality
When the figures start to stack up many people begin to make compromises. Make sure quality isn't one of them. For us at Fireco, this is a matter of life or death, as it can often mean the difference between hindering a fire or not. However, in any industry, your product or services are your reputation and the basis of whether your company will succeed or not. There is nothing worse than launching a product, undertaking an extensive marketing campaign to shout about it and then under-delivering. Test your prototype thoroughly.Although compromising on quality should never be on the agenda, often compromise is needed to ensure you get your product to market. Like buying a house, you might need to decide between location and size of the property. Often you will need to compromise somewhere along the line to get your product to market.
A top specification may not be right for a mass market product. Or maybe the cost of packaging is squeezing the profit margins. Sometimes getting it right needs a little evolution, so don't be scared of change if that's what is needed.
Creative versus practical
Be sure that the creative process and initial flash of brilliance isn't lost in production or by ensuring the balance sheet stacks up. How true is the old adage that creativity doesn't sit comfortably with practicality. Make sure you have both elements covered – it's no good to have a great idea that doesn't work or an idea that works but isn't new.If you have the idea, make sure you have a technical person in the company too who can balance the "what" with the "how". Pushing the boundaries is good when it comes to invention but making sure it really is feasible is also important. Ensure you have the great idea and the expertise to put it into practice. Some of the best partnerships are formed by those who hold opposite skills.
Perseverance is crucial
Remember it might take a while to get your idea into all the minds and hands of those it is suitable for. Don't give up. Good things come to those who wait. If you believe in your product or service and have researched and gone through the above checks, all you need to do is shout loudly and the sales should come in.Alexander Graham Bell invented the first telephone in the 1870s, but it didn't really take off as a household item until the 1940s, nearly 20 years after he had died. Likewise, barcodes were first conceived as a kind of visual morse code by a Philadelphia student in 1952 but retailers were slow to take up the technology. It was 20 years later, in the early 1970s when the same student, Norman Woodland, then employed by IBM, devised the Universal Product Code, which now appears on almost everything we buy.
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