One of the most effective ways to grow your business is by expanding your product or service offerings. As business owners, we are often flooded with new ideas about how we can provide more value to our clients or customers.
Introducing new products or services—especially those that generate recurring revenue—can greatly accelerate your sales and further your company's growth. This strategy, employed by successful small businesses for decades, allows you to diversify risk and capitalize on your established reputation in the market by tapping into new customer segments while increasing value for existing ones.
Not every idea is a ticket to success, however! A poorly thought-out expansion can result in wasted time and lost financial investment and may even jeopardize your current business. To avoid such pitfalls, strategic planning is essential. Here are three critical questions you need to ask yourself to kickstart your business development process:
1. Why is my business ideally suited to provide this product or service?
Your chances of success significantly improve if the new product or service caters to your existing target customer base. Furthermore, if you can seamlessly incorporate the offering into your current business model with minimal investment, the execution process will be cheaper and easier.
Remember, venturing into concepts beyond your current customer base or business model can be rewarding, but they require extensive research, time, and potentially a considerable financial investment. Knowing this upfront is crucial for strategic planning and weighing your options.
2. Who is my competition?
Diversifying your product or service range may broaden your competition. It's important to conduct a competitive analysis to understand the success
of your competitors in delivering the product or service. Reflect on your unique value proposition: What could you do differently that would persuade a customer to choose your business over the competition?
3. How much money will I make?
Conduct a preliminary financial analysis to gauge the potential profitability of your idea. Remember to consider if any of your current business would be cannibalized by the new product or service, and factor that potential loss into your analysis.
In the end, the goal of strategic planning in business development is to focus your time and effort on the most promising ideas. If you’re able to successfully address these three questions about your potential product or service, you can confidently invest more time in thorough research and eventually in the development of the new offering.
As a business strategy coach, I love helping women business owners harness the power of strategic planning to drive their business development efforts. Expanding your product or service offerings can open new avenues for growth and profitability, and I'm here to guide you through that process. If you're a woman business owner ready to broaden your horizons and are seeking the help of a strategy coach, I'm excited to meet you. Let's take your business to the next level. Connect with me today!