Setting Up A Business – Your Product

What Products Are Right For You?

In this article I am going to take a look at how to find and / or develop products. What you sell is vitally important to your business. Without the right product you haven’t really got a business.

So, how do you find the product that is right for you?

Choosing A Product For Your BusinessWell, the first thing I would say is that you must have a product that people want. Obvious? Errr, ask Sir Clive Sinclair. Who remembers the C5? For those of you that don’t, this is the story.  During the 1970’s Clive Sinclair was instrumental in the Consumer Electronics boom. He could do no wrong. He is credited with inventing the pocket calculator and then went on to deliver one of the first popular home computers the Sinclair ZX Spectrum.

His empire grew to epic proportions, but then he went a step too far and tried to change the world. For those of you that don’t know he “invented” something called the C5. Basically it was a very low slung electric tricycle that was encased in very cheap plastic. It was one of those idealistic products. And, to be fair the ideals were spot on, to cut down on growing congestion and of course pollution.

However, the thing looked cheap, it was difficult to manoeuvre and use, was difficult for cars to see on the road, and it was relatively expensive.  Oh, and congestion and pollution were simply not the “hot” topics they are now.

How Not To Choose Your Product

The C5 bombed horribly, in fact, it became an object of absolute ridicule and brought down the Sinclair empire. So, the moral of the story is, make sure you have a product that people want.  And, to be frank it’s no good thinking what you’ve got is what people want. That’s the trap Sir Clive fell into.  He believed he had become untouchable and that everything he touched would turn to gold. He didn’t do his homework.

And, that word, homework, is so important.  Do your homework.  I cannot stress this enough, you need to research and make sure you know there is a market for what you propose to sell. Yes, I know that seems obvious, but if a stalwart of British industry can make such a basic mistake you can too! Indeed, history is littered with similar stories, so please be diligent in your research. It will save you an awful lot of time and money if you take the trouble to get this phase of your business right.

So, how do you go about finding the right product?

Well, I am a great believer that you have to believe in what you are selling.  It’s no use selling simply for the financial gain, because if that’s your motivation, you will probably fail.  However, if you sell something that you genuinely believe in, you’re much more likely to succeed.  The money is simply the result of your activities, the scores on the doors if you like. It’s a measure of your success.  I’ve always found it important to try to take the focus off the pure financial rewards side, although I know how difficult that is to do!

Moving on, there are a number of ways in which to find products.

product development lifecycleFirstly, you can go out to the market, speak to manufacturers, inventors, wholesalers etc and find a product that you like and then take it to market.

Secondly, you can take a hobby, interest or your own knowledge (business or otherwise) and turn that into a product. This has both advantages and disadvantages. On the plus side, if you develop a product yourself it doesn’t cost you anything to “buy” it, however, on the downside, your development time and effort could be extensive.

I mentioned my horse racing site in part one, this was the route I took with a good friend of mine in developing that site. My friend’s (and business partner at the time) first love (apart from his wife, obviously) was horse racing. Every morning he could be found pouring over the Racing Post and to be fair he was pretty good at picking a winner. I would often call him in the afternoon to find him in the bookie cheering home another winner.

After he left school, my friend went into pensions, working as a salesman in the City for one of the big Pension companies. He was hugely successful, but his life revolved around walking the streets of the City and often finding himself “entertaining” clients late into the evening in the City’s hostelries and Curry Houses.  He had no home life, was putting on weight at an alarming rate and was heading nowhere apart from for a massive heart attack.

He knew he had to get out, but wasn’t sure how, the typical caught in the rat race scenario. Being a little unsure as to exactly what the problem was, he changed pension’s company. Once again, massive success followed. Then one Friday night he was called into a meeting and a new commission scheme was introduced.  Over the weekend, he studied the new scheme and realized that, to maintain his existing earnings, he would have to double his sales.

Getting up that following Monday at 5.30am was somewhat of a struggle. As usual, he got on the 6.15 train to the City and then it struck him, the enormity of the situation he was in, the pressure, the struggle, the lifestyle and all of a sudden he knew he had to change – there and then.

He got off the train at Euston and promptly got back on another one going the other way! He went home, rang in sick and sat down to develop his strategy. Here’s what he did:-

Product Based On Your Hobby

He knew he loved his horse racing and he thought hard as to how he could incorporate that in his “job”.  He also knew he had to earn money to live in the short term.

So, while we’re on this part of the story, think about what my friend did here? Ask yourself, what do I really like, what floats my boat? What do I know about in depth? What do people come to me for advice on? Can any of these things be turned into a product?

Anyway, back to the story. Firstly, he decided that his short-term vehicle (excuse the pun) for earning would be to “go on the taxis”.  He had a car, he knew the area he lived in well, so he set himself up as a taxi driver. He studied his “knowledge’ and within four weeks was out earning as a driver on a local taxi firm.

Stage one was complete.

Stage two was a stroke of genius.

Working the taxis allowed him to earn money similar to that he would have earnt in the City (when traveling expenses etc were taken out of the equation), without the stress, and more importantly, gave him the time to pursue his main aim of using his horse racing knowledge to found a business.

By this time, we had spoken about his situation and decided that if he came up with “a system”, I would do all of the marketing side of the business.

Use Your “Contacts”

Utilising his spare time, he worked out a “hybrid” system for picking winners (using the knowledge and other systems he had accumulated over the years). In the meantime, I found a friend who was computer programmer and offered him a cut of the profits to program the system for us.  Having got the program we put it on CD and then sold it through direct mail to horse racing enthusiasts.

It did well, but having got into technology, we then decided to take the business on-line. So, in 1998 we put up our first web site. After huge technical problems we “binned” the first attempt at taking the business on-line.

A year later, we were back, bigger and better than before. Technology had moved on, and once again, we used our networking skills to find a friend of a friend who was into web development and fully understood eCommerce. Again, we negotiated a “buddy” deal, and the result was one of the web’s most successful on-line tipster services.

This is an excellent example of how an interest can become your business. Another hugely successful example is Friends Re United.  I’m sure everyone knows the site. A husband and wife started it when the wife couldn’t get hold of an old school friend she wanted to contact. Now it has developed into a multi-million hit site and is one of the post dot com crash success stories. The site recently sold to a media company for hundreds of millions – who needs the lottery when there are so many good and simple ideas just waiting to be discovered?

It is often said that the successful entrepreneurs don’t do it for money, they often just get “sucked into” an idea. An idea that then just takes over and becomes an unstoppable force, the money generated is just a consequence!

So, it is important that you study these stories (and stories like them). Make sure you learn the lessons that are contained within them. They are incredibly valuable.

Make Use of ALL Available Resources

Thirdly you can search the Internet and find the most popular sites for selling goods. You can do this via the search engines and having found a popular product see if you can either sell that product to the same market or possibly even put a different slant or angle on the product to make it even more successful.

Finally, you can find products (informational or otherwise) and buy the resale rights. Once you have the rights you can market them for yourself. There are an absolute goldmine of products out there being developed, and….for the most part, the people developing them don’t have the time to market the products themselves.

However, as a starter, look at the shopping sites such as Google Shopping, Yahoo or MSN. There you’ll see exactly what the hot Internet products are, and you’ll also be able to see, first hand, a model for Internet selling success. Indeed nowadays, it’s probably easier to set up a storefront on eBay and trade there. Again, there are some great products and ideas for getting going on eBay.

Despite all of that, there is one thing that is absolutely key to all of this. You must have a product people WANT. Now I know I’ve used the example of a product developed out of someone’s passion above, but take heed of my warning here.

Be careful if you do choose this route, just because it’s your passion does not mean it will also interest enough people to build you a successful business.  Let’s say your passion is Tea Cards, remember them? You may know everything about every series of Tea Cards for the last 50 years, it may be your overriding passion. So, you decide to open a shop or website to sell and trade with other enthusiasts. Now, if your thing is Tea Cards I’m really sorry, but my bet is you would very quickly go bust. Now you’re probably sitting there thinking, well this is a bit extreme isn’t it? Indeed it is, and that is exactly the point, if you’re not sure, apply an extreme scenario to your idea and you’ll probably get the right answer!  (I’ll probably get loads of e-mails from Tea Card enthusiasts telling me how much money they make now!!)

You also need to beware of fads and fashions.  A few years go, for about 18 months you could have made a good income selling and trading Pokemon cards and memorabilia. Now they’re hardly worth a bean as they are no longer popular. The same went for Power Rangers and Take That (damn, they came back! )

It’s very easy to check what are the most popular searches on the Internet, there are a number of tools where you can check the most popular internet search criteria. By doing this you can see how many times your potential product has been searched for and therefore if your idea is a potential “goer” or not! So, make sure you research fully before going ahead! Commercial viability is the key here!

To conclude this part, a good idea or product is one that loads of people WANT, that they can all AFFORD and that finally, has a large PROFIT MARGIN. Stick to these three basic rules and you should make money!

There are a number of critical lessons in part, please read, learn and, as they say, inwardly digest these vitally important lessons. In part three we are going to explore some further aspects of these lessons and then we’ll be going head-on at the age-old problem of goal setting. (Don’t groan, it’s important and I’ll be explaining why then!)

Until then, good luck