Product-based business costs are generally higher than service-based business costs. Product-based businesses need ingredients/components, packaging, workspace, product photos; service-based businesses do not. Product-based businesses are generally more heavily regulated than service-based businesses. Shipping, returns, etc., add expenses that service-based businesses do not generally have. Generally, can get services to market faster than can get physical products to market, so speed to market is a differentiator.
HOW DO I KNOW WHETHER I SHOULD START A PRODUCT-BASED OR A SERVICE-BASED BUSINESS?
Decide what kind of life you want BEFORE you choose the type of business you want to have. Be self-aware. The type of business you start will define your lifestyle, and whether you are happy in your lifestyle will define your business. If you make the products you sell, your product-based business can make a location-independent lifestyle more challenging. Research your market thoroughly. Whether product or service, don’t offer any product in a market you have not researched.
WHAT ARE SOME OF THE BENEFITS OF A PRODUCT-BASED BUSINESS?
Building a product-based brand is fun and edifying. Seeing people love your product is satisfying. A physical product can be pictured on social media, making it easier to market than a service. Building a tribe around a physical product is fun. Brand ambassadors can boost sales. Producing products allows you to explore your creative side and tell a great story. If you properly scale a product business, especially with right price and distribution, you can make tons of cash.
HOW DO I KNOW WHAT PRODUCT IS BEST FOR ME TO SELL?
Sell a product people want to buy. Don’t just sell a product that’s awesome. Sell a product the market needs and wants. KEY: Don’t make a product, and then find a market for it. Find the market that wants a product, and make the product for that market. Research your market. What are the laws? Can you get supplies? What are your costs to manufacture? Who else is already doing it? Who else is making money selling similar products? Can you duplicate their processes successfully? Have enough money to make and sell the product, and a business plan to create cash flow as quickly as possible.
ONCE I KNOW WHAT PRODUCT TO SELL, WHAT DO I DO NEXT?
Establish a business structure and open a business account. Corporation? LLC? Give your business shape and form. Get Quickbooks or other tools to help you track your money. Set your mind to account for every single penny. Know exactly how much it costs to make your product, then price it to maximize your profit margin and make the most money. Join a trade organization or networking groups where you can learn, grow, and be supported in a community of like-minded peers.
HOW DO I CHOOSE A BRAND NAME FOR MY PRODUCT LINE?
Search the trademark office database (www.uspto.gov) and Google to ensure no one else is using the name you want to use. Do not use a brand name that someone else is using. Don’t infringe on someone else’s trademark. File a trademark application to register your brand name(s). You may wish to hire an attorney for this. Reserve brand name as a domain name and set up your website there. Reserve your brand name on all social media outlets, even ones you don’t plan to use. Put your branding there.
HOW DO I FIND MY TARGET MARKET?
Find your target market BEFORE you create a product. Find a hole in the market you want to serve, and create a product to fit that hole perfectly. Don’t make a square, only to discover that everyone wants to buy a circle! Narrow your market down to a specific, well-defined, narrow niche. Clarify your brand message. Be consistent and proactive. Read The Fortune Cookie Principle by Bernadette Jiwa. People do not buy products. They buy experiences. They buy you.
ONCE I NAIL DOWN MY PRODUCTS AND MY BRAND MESSAGE, AND TARGET MARKET, WHAT NEXT?
Once you have an audience, you can sell anything. Build your audience. Use social media to engage your target audience. Build your tribe by educating and entertaining. Decide whether you want to sell your products wholesale, retail, or both. Wholesale involves selling to other stores, who then sell to consumers. Retail is you selling direct to consumers. You can do both wholesale and retail, but this will increase your costs. They are two very different animals. Decide which social media outlets will be your core marketing channels. For products, Facebook and Instagram are likely best. Publish a marketing newsletter regularly, one to wholesale buyers, one to retail (consumer) purchasers. Use a blog to attract traffic via search engines and create a diary of your brand journey.
WHAT ARE THE BEST WAYS TO SELL MY PRODUCTS?
There are several ways to sell products. You can set up a website and sell direct to consumers. You can sell products inside a Facebook group, or you can use Facebook and/or Google ads to reach buyers. If you wholesale, do trade shows or use sales reps or distributors to sell to buyers. You can visit local stores that cater to your demographic, and pitch to them. You can also set up a business model that sells exclusively on Amazon or Etsy, or another online marketplace. You can open your own store, and sell your products there, or you can do popups. The kind of lifestyle you want will help you define how best to sell your products.
HOW DO I LEVERAGE MY PERSONAL BRAND TO SELL MORE PRODUCTS?
YOU are the only thing about your business that no one else can copy. People love seeing the “real you,” and learning about your life and why you do what you do. People don’t buy what you produce. They buy why you produce it. Telling your story leverages the power of you. Use the power of video to brand yourself as the leader of your business. Share your story and daily business journey. Spotlight your team members. Use www.helpareporter.com for low cost PR. Seek opportunities to be physically with your customers so they can know, like, and trust you. Document on social media.
HOW DO I LEVERAGE PERSONAL AND BUSINESS RELATIONSHIPS TO SELL MORE PRODUCTS?
Personal relationships are the lifeblood, not only of your life, but also of your business. Nurture and treasure them. Seek out like-minded colleagues for joint opportunities to create new lines and sell more products. Possibly collaborate with other product producers locally at popups and other social events. Use your blog and newsletter to spotlight people you want to connect and build with. Share their links. Cheer people you want to collaborate with. Move toward their inner circle, request introductions. Don’t be shy. Make stuff happen.
HOW DO I EVOLVE AND EXPAND MY PRODUCT-BASED BUSINESS?
As you mature as a leader, and your business matures, you will see opportunities to grow and expand. It’s different for everyone. You first must know what you want to do. Do you want a global brand? Or do you want to stay local? Depending on your goals, you’ll expand or not. You can add new lines of products to grow, discontinue lines to stay small. One way to expand is to develop brand ambassadors and/or relationships with distributors who can sell more of your products. Remember that growth sucks cash, so don’t grow faster than you can handle. Some people may prefer to “stay small and keep it all.” After growing a product brand, you can start a service-based business teaching other’s how to do what you did. Stay true to your personal life goals and decide whether to expand or not based on them.