Business strategies
SMALL and medium size businesses are the backbone of all Pacific Island cultures – without them the economy would not survive or thrive. In this series I look at different ways in which we can grow and develop our small businesses sustainably.
Today my focus is on choosing the right new products and new markets.
This series is all about developing and growing our small businesses and over the last few articles I have focused on the help we can get to support us. Last week I switched focus to what we need to do as business owners to develop our businesses in a sustainable way. Sustainability simply means development and growth that we can maintain over time.
Firstly, new products or services – to be sustainable these need to be as close to our existing range as possible. This allows us to use our current skills, knowledge, resources and contacts. However, before we proceed, we must ask ourselves the question why - why do we want to grow? Is it because our current business activities are not profitable, or customers are asking for more or we simply want to try something new or we have spotted an unmet need among our customers that we would like to meet?
Discuss these questions with a trusted advisor so you can rely on their feedback which needs to be honest and helpful – not just telling you what you want to hear! If your current business activities are not profitable what makes you think that something new will be? Perhaps lack of profitability is nothing to do with the business idea but everything to do with you and the service you provide! Remember ther economic challenges and opportunities that exist at the moment.
If you are going to introduce a new product or service to your existing customer base then find out if they want it – do some research first. Get some objective evidence that suggests your plans could work and will be well received by people who will pay for them. Look at your competition to see who else is doing something similar. If possible, start small maybe with a limited edition or pilot to test the market and your own ability to deliver on time to the agreed high quality.
Secondly, new markets – you might be attracted to set up in business in a new area, town, island, province or country! You might decide to meet the needs of different groups of people – young, elderly, people with disabilities and so on. You might decide to start up a business online. You might be attracted to working with others or to business concepts like multi-level marketing. You might respond to a tender for new business. You might look for business in a different sector (e.g., public service).
Before approaching any new market ask yourself two basic questions. Firstly, how much of your existing market are you serving? Do you need new markets to grow the business or more business from the market that you are familiar with? Secondly, if you are convinced you need to approach a new market, how much do you know about it and their needs? You might be used to selling to adults but know little about the needs of children. You might be used to providing services face to face but know little about selling online. Do you have the resources to go farther afield?
Entering a new market might seem at first to be very attractive. However, you do need to do your homework – how much do you know and what do you need to learn about the new market; do you and your staff need further training; do you need to buy new equipment, transport or materials; who will you be competing against in this new market; do they want what you have to offer at the prices you are charging? These questions require careful planning following an intensive period of research and development.
So, to conclude this article, take care choosing a new product or service or entering a new market. Be proactive and go and look for yourself – do not just rely on the internet! Can your existing business cope with growth of any kind? Are you and your team ready for it and properly trained? Do you have adequate funds that can be invested in a new venture knowing that anything new is a risk – you have to be prepared to lose this money if things do not work out as you hoped.
If you can’t think of where to start with growing your business, then email me and I will try to assist. Next week I will focus on how well we understand today’s business economy in which we operate and how that can impact on sustainability. If you have any other suggestions or any questions or comments, please contact me.
Breadfruit Consulting (www. breadfruitconsulting.com) is a Vanuatu-based business providing advice, training, coaching, and mentoring to businesses throughout the Pacific islands. Contact chris@breadfruitconsulting.com or hazel@breadfruitconsulting.com