Launching a new product or service is exciting. But before you jump in with both feet, you need to make sure it’s the right thing to do. Having an idea is one thing; implementing it is another.
When taking on a new project, there are four major components you must take into account to help ensure your project will be successful.
1. Managing change
To launch your next big idea, it will require people to change. And change is sometimes scary for your employees to accept. They need time to adjust and get used to the idea. Maintaining good, clear communication can alleviate many of these concerns.
• Contemplation – Acknowledging a need for change
• Preparation – Getting things in order, developing a plan
• Action – Implementing the plan
• Maintenance – Working to stabilize and keep the effort going
You may be tempted to skip the preparation step – you’re ready to go from awareness of a need for change to putting the program into place. But, preparation is where all of the kinks get worked out – it’s the road map for the future. It’s where the plan is established – everything from expectations and who’s in charge of what to deadlines, competition and measurement tools. It’s also where you go through the strategic checklist, ensuring your business is ready for the next big thing. The strategic checklist will include the plan’s steps and milestones and how to reach them. If you can motivate others to help develop this, you’re more likely to get more buy-in for the project.
2. People costs
If you’re starting a new product line, beyond the cost of the product itself, you’ll need to train your people. Look at the training and time your employees will incur to take on the initiative. Do they have the right skills? Will you need to hire new people? Take stock of what it will cost to move the initiative from concept to reality and beyond.
If you’re a service business, 70 percent of the expense is people; and if you’re going to launch a new initiative, it’s going to involve people.
Perhaps, the biggest “people cost” is opportunity cost: What you have to forgo when you choose this initiative over doing something else; what won’t your employees be working on while getting this new initiative off the ground.
I have learned the hard way the art of productivity is NOT multitasking. It’s the exact opposite. You’ve got to work on one thing at a time. And the best practice is for the entire company to be working on one initiative at a time. When you start something new, make sure it’s the right one thing, and everybody is working toward the same goal.
3. Equipment and technology costs
What tools (hardware and software) will your business and employees need to be successful? If you’re producing a new product in-house you may need to purchase new equipment. Manufacturing and distribution costs need to be closely scrutinized to ensure you’re not going to accumulate too much overhead.
If you hire new employees, you may need to provide each of them with new equipment – desks, chairs, computers, phones and other office supplies – as well. For one employee this may not seem like a big deal, but multiply this by 10 new employees, and these costs can add up.
In addition, you need to consider what kind of technology you’ll need to launch and sustain your new service or product. Be sure to look not only the cost of the actual software, but also the costs associated with setup, implementation, training and product updates.
4. The bottom line
Companies go out of business for three reasons: cash flow, cash flow and cash flow. You don’t want to get down the road on a project and find you don’t have the finances for a key piece. If you don’t have the money to sustain this project for the long-haul, you may want to rethink your plan.
What is the investment and are you willing and able to commit to it? This certainly is the capital outlay for the initiative, but it also should include your people cost as well as marketing and other ancillary costs.
The big question that needs answering is: Should we take on this new project? That’s the most important step. Does it make sense? If not, it can be a very expensive diversion of your most precious and costly investment: your people.
Still not sure if your business is ready to launch your next big idea? Learn how GrowthForceTM, an Insperity strategic alliance partner, can help support your financial department and give you greater insight into your financial world.