Small Business

Small Business

Choose your Products & Service

Product or Service Description

This chapter helps you to develop the part of the business that is related to developing the products and services that your business will offer. It will also describe what needs to be taken into consideration when selecting suppliers.

You can use this information to help you as you work through the development of your business plan.

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Defining your Product or Service

Creating a Unique Selling Proposition

Selecting Suppliers

Intellectual Property

Defining your Product or Service

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To help you accurately define and develop the products and services that you will take to the market, you can create a product description statement.

When writing a product description statement, ensure that you connect the features of your product to the way that they can benefit customers. By having a clear understanding of what your product is, you'll be in a better position to fully exploit its potential when advertising and selling it. A clear definition of your product can also help customers make informed decisions and improve their level of satisfaction.

To further improve the attractiveness of your offering you may like to consider adding additional value using incentives such asguarantees and warranties.

A warranty is a legally implied obligation which guarantees the repair or replacement of a product in the event that it fails within a certain period after it has been purchased.

A guarantee is an agreement by the business to assure the quality or length of use of a product offered for sale by the business and in the event that the product is faulty, a refund is given.

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Product/Service Overview

Q1.Describe your products/services. Give answer

Creating a Unique Selling Proposition

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A key point in developing your marketing strategy is to come up with your unique selling proposition (USP). A USP is what makes your product or service stand out from your competitors and is generally the reason why customers will purchase your product or service over those of the competition.

Some commonly used USP's are offering ‘best service', ‘lowest price', ‘best value' or ‘most advanced technology'. However, when determining your product's USP be sure to also look beyond the physical characteristics of your product and consider the intangible or psychological benefits of the product for your target customer group such as security, comfort, and timeliness.

To convey your USP to customers, you can consider developing it as a way to promote your product. Consider using it on your marketing communications such as business cards, letter heads, brochures, web site etc.

A value-added service is an important factor that should be considered when developing your business's USP. Value adding refers to providing a supplementary or complementary benefit to the customer in addition to your core product which the customer wouldn't receive from your competitors. It is an extra incentive used to encourage customers to rate your product above those of your competitors.

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Product/Service Overview

Q1.Identify and describe the points of difference between your product / service and those of your competitors? Give answer

Q2.What is your product's unique selling proposition? i.e. what makes your product different from your competitors? Give answer

Selecting Suppliers

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Your product or parts of it may be bought in full or made from raw materials that you purchase from suppliers. Working closely and with these suppliers to develop strong relationships and develop efficient business systems to facilitate your purchasing requirements can help you to; increase profitability, maximise efficiencies, optimise your inventory levels, and reduce storage requirements.

When selecting suppliers it is important to carefully evaluate their offering considering various factors as following:

Number of Suppliers

Dealing with a single supplier can be very efficient and offer opportunities to forge strategic linkages increasing quantity discounts, levels of cooperation and responsiveness. However utilising multiple suppliers provides options protecting against an over reliance on a single supplier and reduce your risk. Utilising multiple suppliers also provides the opportunity to ensure competitiveness.

Supplier Reliability

Reliability of the supplier is their ability to deliver a quality product to your business on time. Problems with deliveries can cause major disruptions to your business. You can evaluate the reliability of a supplier by asking for their on time delivery statistics or by using their existing customers as a reference. It is also good practice to start out with a small order when using a new supplier so you can evaluate their performance.

Evaluating prices

It is well worth spending time to research different suppliers to gain an understanding of the range of services and prices on offer. You can then negotiate final pricing and payment terms with the suppliers to ensure you receive the best possible deal.

Additional Services

This involves the supplier's ability to assist your business to coordinate your inventory control systems and ordering processes. Developing close links and even integrated ordering systems can be a good way to improve supply efficiencies and reduce procurement costs. There can be benefits for both your business and your suppliers if this is managed effectively.

Intellectual Property

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Intellectual property (IP) is the product of someone's intellect used to create something novel, different or original. It can occur in a number of forms such as a piece of art work, a good idea, a design or plans for a design, an invention, knowledge, a book or a trade secret.

IP can be legally secured to ensure that only a certain person (or group of persons) have exclusive rights and control over the use of the idea or invention and therefore have rights to extract profits from it if they see fit. It is illegal for others to copy or use that idea or invention for their own benefit.

There are a number of methods that can be implemented to ensure that your intellectual property rights are protected.

Patents

A patent is the exclusive right given to the owner to commercially exploit the process, design or invention for the life of the patent in return for public disclosure of the process design or invention. You need to apply for a patent before it will be protected by law.

Prior to your patent application being accepted it is examined to ensure it meets the necessary legal requirements. Some things are not patentable by law such as mathematical formulas and ideas or artistic creations.

Trademarks

Used to identify a unique product or service to distinguish it from business competitors. Examples include a logo, letter, name, shape, picture, sound, aspect of packaging, smell or a phrase. While you do not need to register the trade mark to use it, registration does provide your business with the exclusive rights to use, licence or sell the trademark. It is important to note that you need to pay a fee for renewal of registration to maintain the trademark.

All Australian trade mark and patent registrations are administered by IP Australia.

This protects original works of art, writing, music, films, visual images, films and computer programs that express the creator's ideas and information from unauthorised copying. Copyright protection is free and does not need to be registered for. Hence, every time you put an original idea or information into a material form it is automatically copyrighted. However, it is advisable that owners of any original work should place a copyright notice on or near their work.

All Australian copyright material is administered by the Australian Attorney-General's Department.