Small Business Products And Services
Small Business Products And Services
William A. Cohen (Author & Founder, Institute of Leader Arts) gives expert video advice on: Which small businesses fail or succeed most often?; How do I find a new product to develop? and more...
What is a "business product" or "business service"?
Ok, the two in some ways are the same, but it does cause some confusion. A product is tangible. You know the chair, that's a product. Or a computer is a product. A service is like computer repair service. Someone repairing, that's a service; You're doing something for someone. That doesn't mean that when you're selling product or marketing a product that you don't want to give good service. That may be why confusion comes in. You want to give good customer service. But the two are different. You can have a business built around products, selling computers, or building computers, or you can have it around servicing computers. That's a service. Consulting is a service. Teaching is a service. Speaking is a service. These are all intangibles. Whenever you've got something, whether it's a computer software or a computer, anything like that or a chair, that's a product.
What are the odds that my new product will be successful?
There are all kinds of figures out and, and I'll give you the worst. The worst one was that there was a study done some years ago by the Boston Consulting Group on all kinds of products, and they found something like 1 of 1,400 products that people thought up actually came out and actually were a successful commercial product. You can narrow that down quite a bit as they were looking at all kinds of products; big kinds of products and everything else. You may have heard of 8 or 9 or 10 products succeeding; I think whether a product succeeds or fails really tends to do with businesses rather than products themselves rather than the marketplace. Regarding the product; it really depends on what you with the product. I am again referring to my master in this: Joe Cossman. I've really learned a lot from him. Joe had a lot of success; he also had some failures. He said that really the basic thing is what you do with the products that's different. He took not only the Ant Farm, but also a potato 'Spud Gun' which sounds like a strange name. It was a toy; potatoes are mostly water and you took this little gun, put the potato in there and fired, and it fired a little piece of potato. That product had failed miserably in the market place; awful. One way Joe used to find products was that he used to call plastic factories around in his city (which happened to be Los Angeles by the way), and he would ask them if they had any old tooling. He found out this one company had tooling and also about ten thousand of these little potato spud guns, and they had lost all kinds of money about ten years previously. He bought the tooling and the 10,000 spud guns for $500. He sold 850,000 Spud Guns, but it was a twist that he made to it and the way that he marketed it that made it different than what this person did before. Any product can be successful. I wouldn't look at the success rate. Just remember that the caution note is that any product can fail but any product can also be a success if you do it right.
Which small businesses fail or succeed most often?
I'm not sure that you can say “All of these fail, and all of these succeed,” because there's so much involved in these things. Some of these things, as I just mentioned, depend so much on what you do with the product. I think that you can look at whether there's a demand for this type of business or not, or the uses of the product. For example, I think maybe Joe, if your name is Joe it helps out a lot. There's a man called Joe Sugarman. He's the most known because he used to sell blue blocker sunglasses on television. He sold those for about 10 years, but he sold a lot of other products. He was the first one to sell handheld calculators, and he sold them through the mail. This is another example of a product which had a terrible time getting off the line. He sold them even before Sears did, and when he sold this thing, he sold by direct mail at first, and it failed, it failed miserably, but he kept track. That's another thing that's a good lesson for all of us; in other words, just keep track of what you're doing as well as the results and where they came from. Joe had different mailing lists that he used, and he found out that even though they lost all the money, I mean they lost the money basically, certain lists really worked. The list of engineers is an obvious one that worked, and other lists didn't, so he went back to the people who brought him the money, and he said, “Look, yes, we lost all the money, but I know what's wrong,” and he showed them the things. They reinvested and it was very successful. I'm not sure you can say that certain products are always not good and these other products always are good.