Bringing the innovative concept for an original product to life is usually one of the highest hurdles for ambitious entrepreneurs. Developing a brand new product from scratch is somewhat a mysterious process. If you ask five entrepreneurs to hear the origin stories of their great businesses, you’ll find out that the journey to a finished product rarely resembles a straight line.
Still, there are six general phases of product development, and each one of them is crucial in its way to achieving final success. Even if you are not a rookie entrepreneur, following these six stages while developing a new product will make life easier for you and your company. Improvising is good, but knowing what lies ahead is even better!
Check out our six stages guide to be prepared to face the challenges involved at every step of your product development journey. Nothing comes overnight, and neither will your new product design. Know that even the most experienced entrepreneurs who achieved it all, invest months, and sometimes years into producing new and more innovative commodities that will hopefully answer unanswered customer demands, solve problems, and make the lives of millions of people better.
Step 1: Coming Up With The Idea
Having the right idea for a jaw-dropping new product is often a problem for aspiring entrepreneurs, mostly because they are waiting for a stroke of genius to reveal the perfect product they can manufacture and sell. Even though developing something fundamentally new can be creatively satisfying, many of the best ideas are the result of iterating upon an existing product.
Suppose you are all out of original ideas. In that case, we strongly encourage you to utilize the SCAMPER model, a quite useful tool for coming up with product ideas by asking simple questions about existing products where each letter stands for a prompt:
- Substitute: Is there a substitute for an existing product?
- Combine: Can a product complement well with another byproduct?
- Adapt: Can you adapt a current product?
- Modify: Can you do a little twist on an already existing product?
- Put to another use: Can a particular product be put to another application?
- Eliminate: Can someone be eliminated in the supply chain?
- Rearrange: Can a product be rearranged and develop a whole new use?
Ask yourself these questions and see if you can develop fundamental approaches to modify existing ideas or even adjust them for a different target audience or usefulness.
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Step 2: Research, Research, Research!
Once you have the new product idea in mind, you might feel inclined to leapfrog ahead to manufacturing, but that can become a crucial misstep if you fail to validate the idea first. Validation shall ensure that you are developing a product that people would like to acquire and pay a certain amount of money to have it.
There are many ways that you can validate your product ideas such as talk about it with your family and friends, send out an online survey to get some feedback, start a crowdfunding campaign, ask for feedback on forums, launch a “coming soon” website to gauge interest via email and pre-orders.
The idea is to get feedback from an unbiased audience about whether they are interested in what you’re about to produce and if they would buy your product. Also, visit your competitors’ websites and sign up for their email newsletter if they offer one. This way, you can understand how they attract potential customers and generate sales. The information compiled from the thorough product validation and market research will enable you to know the demand for your product and the level of competition before you start planning.
Step 3: Planning
Step three is the phase where it’s essential to take some time and plan the whole process before you begin to develop your initial prototype. Draw a fully detailed sketch of the product design with labels explaining various functions and features. Using the final drawing, create a list of different components and materials you will need to bring the product to life.
Altogether with components, consider the possible retail price of your new product and the category your product will fall into. Are you developing a product that’s going to be an everyday item or for special occasions only? Are you going to manufacture the product using premium materials, or perhaps the product will be environmentally friendly? There are tons of questions you need to consider in this third phase to guide you not only through the product development process but also through your marketing strategy and brand positioning.
Step 4: It’s Time To Develop Your First Prototype Of The Product
The objective of this phase is to develop a finished product to use as a sample for mass production, or a way to prove the concept for your idea to possible clients, investors, and CEOs. In most cases, smart entrepreneurs work with third-party companies who excel at prototyping to develop their prototype models.
For end products like household accessories, electronics, toys, and other hard-exterior objects, it’s for the best to have a 3D rendering of your product design created in CAD software, and afterward develop an actual physical prototype either through 3D printing or with the help of injection molding technique if you are in a hurry to quickly test out the market with low-volume parts.
Photo from Pixabay
Step 5: Building Your Supply Chain
As soon as you are satisfied with the prototype, it’s time to start securing the partners needed for mass production and gathering the materials. This phase is more commonly known as building your supply chain, as you need to find and secure the vendors, activities, and other resources essential to creating a product and putting it in your customer’s hands.
Besides manufacturing-related services, make sure that you also factor in warehousing, storage, and shipping into your choices at this phase. Speaking of suppliers, there are endless resources available, both in-person and online. Even if it may seem a bit old-fashioned, many business owners attend trade shows dedicated exclusively to sourcing. Within the sourcing phase, you will surely come across the decision whether to produce your product locally or overseas. Make sure to spend the necessary time and compare the two options, as they each come with their own set of advantages and disadvantages.
Step 6: Costing
Once you’re done with everything else, you should have a clear picture of what it will require to produce your product in the end. The last phase of our guide is dedicated to the so-called process of costing. This is when you should take all the information you’ve gathered so far, add up what your expense of goods sold (COGS) will be so that you can define a final retail price and gross margin for your product.
Photo from Pixabay
Create an Excel spreadsheet with each extra cost broken out as a separate line item. Include all raw materials, factory costs, manufacturing costs, and shipping. Don’t forget to include import fees and other duties you will need to pay to get your final product into the customers’ hands.
When you have your total COGS calculated, you are now ready to come up with the final retail price for your product and subtract the COGS from that price to get the actual gross margin, or profit, on each unit sold.
While each journey to a finished product is somewhat different, and every industry comes with its own set of quirks involved in developing brand new products, follow our six-step guide as you undergo your development process. This way, you will be able to break down the overwhelming task of introducing a brand new product to the market into more digestible phases to set yourself up for a successful final product.