Grow Your Small Business with New Products and Services

Small businesses account for a major percentage of product and service innovation. As local, regional, and national markets evolve, one thing is inevitable. To keep pace, your company must expand its offerings, even if your firm is relatively new.

Refine Current Offerings

Examine your business goals—where you are today and where you want to be in two or three years. Consider the following questions:

  • How has competition in your industry and market changed, and what changes will likely occur in the next few years?
  • Have customer buying habits and purchasing trends changed in the last year, and are they likely to change in the future?
  • What new products or services threaten to make my business obsolete, or at the very least, to siphon off a portion of your current business?
  • Are customers buying products or consuming services through different channels, and does it affect your business?

Then, think about simple ways to change how you currently do business.

  • Incremental improvements. Consider small, short-term changes you can make to your current products and services. If customer buying habits have changed, determine how to position your products to meet that change.
  • Different means of delivery. E-commerce has changed the retail environment dramatically. Even if you run a local brick-and-mortar store, you still must compete with online retailers. Find ways to deliver products more conveniently to compete with home delivery online retailers. Online retailers are always open. Create ways you can expand your store accessibility to make shopping more convenient.
  • Different service paradigm. You still can provide the same basic service but in a dramatically different way. For instance, if you provide maintenance and repair services, some customers may prefer signing up for a monthly service contract instead of paying for services on an as-needed basis.

Think about ways to deliver information more conveniently. Consider posting product manuals, warranty information, and how-to guides on your website. In short, regard your products and services not simply as "items" but as comprehensive solutions for customer needs. Then, adapt to meet those needs.

Develop New Products and Services

Once you’ve tweaked your current offerings, it’s time to consider adding new products and services.

Start by extending your current offerings. If you sell products, consider complementary items that leverage the ones you currently sell. A simple example: if you own a motorcycle shop, it makes sense to sell helmets, leather goods, and other accessories.

Think beyond the obvious to include other products that make sense. In a motorcycle shop, including repair manuals, travel guides, cleaning and storage products, outdoor gear, and pre-packaged food items for long trips can increase purchases through convenience. Sometimes, you may not be able to stock certain products, but you can partner with other companies to help make your establishment a one-stop shop.

Consider complementary services that leverage current skills or equipment if you provide services. Repairs or maintenance for some heating and cooling products can be a natural extension for plumbing contractors.

Here are additional guidelines to follow:

  • Add value. It’s easy to create new "products" by bundling existing stock. Most customers expect to pay less for these deals, though, and your goal should be to increase sales and profits. As an alternative, focus on enhanced service as an added value.

    For example, many book manufacturers provide a "preflight" service, checking customer files well before production to eliminate delays due to file preparation issues. Those manufacturers provide a tangible value since publishers can better control delivery schedules and avoid costly delays. The manufacturer charges for the service and smooth experience.

    Apply this thought process to your own situation. Consider how you can add value. Enhanced value can look like half-price carpet installation for two rooms or more, preventive maintenance on electrical appliances, or flexible return policies.

  • Create entry-level products. If you sell high-end products and services, it may be tough for new customers to overcome the price hurdle. Find ways to introduce customers to your business gently.

    Say you provide heating and cooling services for large buildings and facilities; consider offering system diagnostics, an energy audit, or other services that generate revenue. This will also allow you to prove your skills to a new customer.

    You can do the same where products are concerned, but ensure you don’t "cheapen" your brand by offering entry-level products that damage your overall brand perception. For example, a high-end watch company would never add inexpensive digital watches to its line of products for fear of damaging the brand.

  • Think about the impact on current offerings: New products and services sometimes cannibalize sales in other areas. Consider the motorcycle shop: If you offer comprehensive how-to maintenance guides, selling that information may reduce the number of oil changes and basic repairs your service area performs.

    Consider your customer demographics. You may decide those interested in performing some repairs independently will not use your maintenance services. In those instances, selling maintenance guides simply generates additional revenue.

New product and service development is easier than it may seem at first. Your customers often tell you what they want, so take the time to listen and act on what you learn. Not only will you grow sales, but you will also build greater customer loyalty.