Do You Have a Great Business Idea? “Really”

Before you go ahead and waste a lot of time and money building your new product or service, survey the market and figure out what separates yours from everything else that is out there.

You need to ensure that your product or service is different from the competition, otherwise why would someone choose yours over another? Here are 3 ways you can differentiate your product or service from the competition:

• Be less expensive
• Provide better features
• Create something brand new

Be less expensive

Unless you have developed a new proprietary technology that allows you make or sell your products more cost effectively than your competition, do NOT use this pricing strategy.   There will always be someone else that can come along and undercut your price and be less expensive for the customer. If you have developed a way to make your products more cost effectively than the completion, then you would be better off charging the same price and keeping the extra profits for yourself.  For instance, if it costs you $5 to make a product that sells for $10, and it costs your competition $6 to make the same product, then why not charge the $10 and keep the extra $1 for yourself?

Provide better features

Providing better features that are not available in other products is where a substantial amount of innovation takes place today.  If you figure out a way to improve upon an existing product, then you have a good chance at being successful.   Some simple improvements, like changing colors, different packaging, or a better form factor, can give you a leg up in the short term and allow you to build from there. Here are some examples of newer products that offer better features:

1. Before there were juice boxes, there were bottles and cans of juice.
2. Before there were tablets, there were netbook and laptop computers.
3. Before there were DVDs, there were VHS tapes.
4. Before there were cell phones there were landlines.

Create something brand new

Obviously if you come up with a brand new product, then there is no competition because your product or service hasn’t been available in the market before.  If you are following this path, then it is very important that you ensure that it is truly unique and customers will want to buy it.   You will do this by conducting lots of research and then building some prototypes to test out on potential customers.  Don’t use your mother!  Test it on people who don’t know you and couldn’t care less whether you fail or not.