Four things to consider before adding new products to your business

Adding new products or services to an existing business line can be key to unlocking new growth for many companies – under the right conditions. Under the wrong conditions, new product lines can adversely impact your business in a number of ways ranging from distraction to negative brand impact and financial loss.

Here are a few things to consider as you explore the viability of new product lines for your business.

1. Launching new products can take a lot of energy, planning, resources, and employee buy-in, so don’t go down this road unless your core business is healthy. In most circumstances, using a new product line as a Hail Mary in an effort to save a struggling business will only hurt it further. Tend to the core issues first.

2. There’s a good chance that your customers are already telling you what sort of new products they’d like to see you offer. Ideally, those new products will have traits similar to your core offerings. This allows you to continue to serve the type of customer your brand is built around in new ways, which will give you a competitive edge.

For instance, at Greenleaf Book Group, our core business revolves around publishing and distributing books. Over time, we saw that our authors were repurposing the core ideas from their books into workbooks, keynote presentations, white papers, blog posts, and other content vehicles designed to engage and serve their audiences. Beginning to offer these services was a natural extension of our in-house talents and familiarity with our authors’ ideas.

3. Stick with what’s familiar. Veering too far outside of what your company knows and does best can be dangerous in terms of infrastructure, costly mistakes, and in risking employee morale.

Case in point, we’re often asked why we don’t sell eBooks directly to consumers via our website. After considering the potential upside against the development, maintenance, and support costs, we decided against it for a few reasons. Our core business is not built around selling retail to consumers, and readers typically purchase eBooks through the company that manufactured their e-reader device of choice. The potential reward wasn’t strong enough to warrant the risk.

4. Be careful about biting the hand that feeds you. Your core operation might currently be bringing in new customer referrals from companies in complementary but not competing businesses. If you move into that referring company’s space and lose their referrals, are your new customer acquisition sources diverse enough to withstand the hit?

For example, a pool supply store may receive customer referrals from a number of pool cleaning and maintenance companies. If that store starts offering pool cleaning and maintenance services, chances are good that the competing maintenance companies who once sent the supply store new business will stop doing so. The pool supply store needs to be prepared for that impact and factor it into their assessment as they consider whether moving into the maintenance business makes sense.

In many ways, launching a new product line is like starting a mini-business inside a parent business. It deserves all of the thought, strategy, business planning, and projections that any business needs in the start-up phase. It also needs the energy and support of your team, so be sure to strongly and consistently communicate the purpose and benefit of the new product or service. If that’s done correctly, your people will appreciate the chance to be a part of an exciting new growth opportunity.

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