Six Stages to Develop Business Ideas
Every business and product begins with an idea. A person looks around and asks a question such as, why can’t I find a product that does this task or a business that offers that service? Getting from those kinds of question to offering something on the open market, however, requires a process that breaks down into six main stages.
In cases where an idea doesn’t strike fully formed in response to a perceived need, brainstorming acts as the standby for idea generation. A person or team considers a particular industry or type of product and asks what new or variant products and services the industry or consumer base might welcome. After compiling a set of ideas, the team winnows the list down to a shortlist – often one idea – for the next stage.
Once the team develops the shortlist, management or the business owner needs to tentatively sign off on the concept. Approved concepts proceed to the research element of the process. This includes basic market research, often with a mockup of a new product, to understand potential customer interest across various market segments, as well as acceptable price points. If sufficient interest exists in a large-enough market segment to make the new product or service profitable, the concept moves forward.
While a business plan typically is associated with starting new businesses, companies often develop complete business plans for individual products or services. Doing so allows the business to compile all the relevant information, from marketing information to financial data, as well as organizational elements relevant to the resource allocation and management. A business plan for a product also allows the business to provide guidance about how the new product strategy fits with the larger business strategy.
Development calls for proof of concept. This means the actual production of a working model of the new product or a small-scale version of the new service. Assuming the working model or small-scale version of the service live up to the concept, the business can develop tentative plans detailing procedures for full-scale production, as well as marketing and operations plans.
Validation encompasses a broad spectrum of issues. Full-scale production testing must occur to ensure the procedures work as planned and within acceptable variances from estimated costs. The business needs to test customer response to the final version of the product or service. Any major changes to procedures, materials and processes take place in this stage. The business must also fine tune marketing and operations plans to reflect adjustments to the product or service.
The launch stage entails bringing the product or service fully onto the market. Large-scale manufacturing or a full version of the service goes live. The marketing efforts probably transition from straight interest building to either a hybrid interest building/selling or straight selling. In essence, the product or service becomes a public, commercial endeavor, rather than just an in-house project.