This post is a followup to The ride's not over (so get busy). In that post I talked about the fact that this present time provides on opportunity that won't last. This is your opportunity to build a business that is stronger, more resilient, more profitable and more sustainable than ever. Don't wait for the economy to save you, it won't. There's a lot of evidence that suggests things are going to be worse in a year rather than better. Don't settle. Don't go along for the ride. Instead develop new products and services.
Your customer base may need to change or it may have already changed. The number of businesses or consumers that can afford your products and services is almost certainly smaller than it was a year ago and it may be smaller yet in the year to come. That means you have to change your pricing to bring old customers back or you must offer alternative goods and services to attract new customers. At Axiom we felt the pinch when some clients started cutting back on $2,000 and $3,000 monthly consulting and CFO services. We developed a $400 - $600 bookkeeping service available to a much wider audience as a way to capitalize on the market shift.
If you are going to develop new products and services realize that there are only two options. You can:
If you are building something that doesn't fit either of these scenarios you are building a new business. That may be OK, but just be careful. Building a new business without realizing it and planning for it will eventually cannibalize your existing business.
When building something that can be sold to existing customers it is imperative that you seek their input during the development phase. Don't build something you think they want. Build something they tell you they want. Not only will you build a better product, you should be able to close a good number of pre-sales that will help cover some of the development cost.
When building something to attract brand new customers you want to make sure that you can map out the progression from new customer to ideal customer. With a plan and a process in place you can more easily and quickly convert these new customers into the types of customers that will sustain your business and capture market share.
For instance, when building our bookkeeping business it was important to understand how a client could progress from basic bookkeeping services to basic financial analysis to broad business planning to strategic consulting to outsourced CFO and executive consulting services. That roadmap allows us to use a new product to feed the core business over time. Everything happens deliberately rather than haphazardly.
Tomorrow we will tackle the issue of cost cutting.