Developing Your Micro Business Products

What is a micro business?

A micro business is classified as one that operates with four people or less. Micro business is one of the fastest growing sectors in the NSW economy, making up 88% of the State's small businesses. (Source: ABS Cat No. 8165.0, Counts of Australian Businesses, Jun 2003 to Jun 2007).

Micro businesses may operate as a single operator or multiple employee business from either home, mobile, shared offices or commercial premises.

Lifestyle Factors

Operating a business from home has become increasingly common because of the digital revolution, outsourcing, the trend to self-employment and the growth of service industries. This accelerated emergence of micro business operating in recent years can also be linked to better technology and trends toward more flexible lifestyles. Apart from the economic value this growth entails, local communities also gain with social and environmental benefits of those working from home.

Developing Your Products

Many micro-businesses are developing unique products and business services to bring to the market. They are also developing unique brands and trademarks. To check on the commercial viability of your product we suggest you seek an innovation consultant which specialises in commercialising products or services. The first port of call can be the NSW Innovation Advisory Service, which provides an initial free consultation to assist you get on the right path. They are specialists in product commercialisation and will assist with streamlining your product development process and refer you to the appropriate expertise for each step of the way.

Also, consider securing your trademarks, patents and copyright for manuals and written material. The Innovation Advisor will again assist with this process. They are also business strategy consultants and will discuss the best business model for bringing the innovation to market via licensing or capital raising.

Product development is not for the faint hearted, but can be enormously rewarding. Seeking advice at the correct stages can save much time, heart-ache and money.

You may wish to check out the viability of your product before meeting an innovation advisor. The NSW state government has developed a resource, called Ideas Online, where you can self-assess the idea, its protection, the business case and options for reaching the market place. You will be asked over 40 questions and it is valuable to be brutally honest when answering those questions. Enter Ideas Online.

The NSW Innovation Advisory Service is funded by the NSW state government to support innovators and small business commercialize their ideas, products and services. Services include preliminary patent search, technical assessment and market reviews through to licensing and capital raising. See www.ausinvent.com for more information. Dan Liszka is the Managing Director of Alchemy Equities, the firm which is contracted by the state government to deliver the NSW Innovation Advisory Service.

For more information on Business Strategy Consultants, Innovation Consulting Firms and Innovative Consultancy. Please visit: http://www.ausinvent.com/

Commercialisation 101 - Choose The Best Path To Market

Many companies we see at the NSW Innovation Advisory Service are uncertain about which route to market is best for their product or service. Much time and money is wasted pursing the wrong strategy.

A simple way to consider the best route to market is to ask the question:

Is it a sustaining technology or a game changer?

If sustaining (incremental improvement, better design, improved service function), that is a sustaining improvement – we suggest to our clients to resist going head-to-head with the incumbent competition, but rather to pursue a licensing strategy. This is where as the owner of the intellectual property (patent, brand, design, trademark), you license the technology to another company to manufacture, market and distribute.

If it is a game-changing opportunity(as VOIP was to telephony)– then we suggest the company pursue a spinoff or startup strategy – which generally means capital raising.

We have clients that have come to us after spending three years pursuing a licensing strategy, unsuccessfully for a game-changing technology. The product they were endeavoring to license - would have resulted in reduced sales to the target company’s existing product line. If a product being pitched for licensing, makes an existing product line redundant – a company is unlikely to license in the new technology.

Three years on, management should have asked that simple question – is the innovation an incremental improvement or a game-changer?

So what are the skills required to bring new products and services to market?

This is a major area our innovation consultants discuss with clients. We regularly have the technology specialist seeking advice on commercialisation of the product they have designed.

At the NSW Innovation Advisory Service, our first response is – who is your team to deliver this product to market? Successful commercialisation is about team. We suggest to technical types – that they team up (and share the equity) with an entrepreneur who understands how to bring something to market and sell. Days, weeks, years are lost with the wrong people attempting to bring products to market.

It is a major reason for the weakness in Australia’s track record in achieving successful commercialisation. We are great inventors – but not great innovators – that is, when you commercialise that invention.

Technical-types spend many hours getting their product 100% perfect. It’s in their DNA to do so. Budgets get overrun and timelines extended as a result. But when teamed up with an entrepreneur, who’s DNA is to get the deals and secure the cash-flow – a product is delivered to the market can be 75% ready. By setting to market early and remaining flexible, the team can incorporate customer and distributor feedback to fine-tune the product and can start generating the sales to keep the show on the road.

Understanding the market can save time

At the NSW Innovation Advisory Service, an innovation consultancy service, we often see teams who have assumed they know their market and have not assessed if the market warrants the investment in time and money. Wrongly pitched product launches can easily be the result. We site an example of a kitchen manufacturing company which was about to launch a website for purchasing kitchen components. A short focus group test market session indicated they needed to tweak their campaign and introduce a “touch and feel” element – women would not buy the kitchens without feeling/seeing the surfaces. They adjusted their service accordingly and went on to a successful launch.

Had they not undertaken that focus group session they would have launched and spent years reshaping their product offerings.

The focus group was cost effective and saved considerable time.

Successful commercialisation doesn’t have to be about trial and error. There are proven, cost-effective ways to bring products and services to market without wasted effort and heartache.

Start with assessing the opportunity correctly, build a team around the opportunity and understand the marketplace. Seek out advice from those that have trodden the path before.

Kate Ingham is the Senior Client Manager with Alchemy Equities, a Sydney-based business innovation consultancy firm which assists companies commercialise technologies and services. Alchemy Equities is contracted by the NSW state government to deliver the NSW Innovation Advisory Service. For more information on Innovation Consultancy, Innovation Consultants and Innovation Consulting Firms. Please visit: http://www.ausinvent.com/

How To Grow Your Business With Innovation

To grow and survive in a competitive market is challenging. Businesses need to generate fresh ideas in order to build new markets.

Research indicates that most new ideas in business come from three sources:

- the staff

- company networks and

- customers.

Think about your company’s situation. Do ideas get lost ideas in day-to-day operations? Does your company have a formal customer feedback process? Do staff ideas get lost in emails and staff meetings?

As well, management often do not know how to assess which ideas they should implement.

You need a System

To cost-effectively assess and commercialise ideas within your workplace you first require a system to capture those ideas.

You need to assess the ideas as to whether they are:

- incremental (refer back to line management),

- strategic (consider licensing out or in-house development) or

- game-changing (spin-off).

Setting up an In-House Innovation Process

An in-house innovation process needs to be simple and easy to manage and incorporate these elements:

- Determine the rules/strategic objective of an innovation program

- Invite ideas (promote throughout the business networks and staff)

- Collect ideas (simple one-page submission)

- Assessment(1-10 using key company indicators)

- Execute:

1. Pilot (small amount of resources and team to develop)

2.Venture (commit more resources and staff)

People Strategy

An innovation program is best for businesses that want to grow within a market. It is in effect, a people strategy.

So what makes staff want to participate? It might be time to work on the idea (Google does this), or an award-system( trophy – Atlassian has this), or a monetary incentive. One company offered any team that created an idea into a business would attract 25% of net profits of the new idea income for 2 years.

A company must protect itself however with a simple agreement that outlines rights –that states the business owns all the intellectual property created.

Fed Ex Days

One award-winning company in Australia, Atlassian has an excellent model called ‘Fed Ex’ days. Quarterly, staff get 24 hours to produce a one-page outline of their idea. At 3pm the next day they pitch their idea to senior management and staff. Their ideas are voted on. One or two ideas get the green light for piloting.

These days innovation is not a luxury. It is about continuous improvement and keeping your company relevant. It is also about retaining staff and creating a dynamic workplace.

Dan Liszka is the CEO of Alchemy Equities, a business innovation consultancy firm which specialises in delivering in-house innovation programs to small and medium enterprises, as well as equity capital raising. Alchemy is contracted by the state government to deliver the NSW Innovation Advisory Service and has recently conducted workshops nationally titled Capturing Innovation in the Workplace funded by the federal government’s Enterprise Connect program.

For more information on Innovative Business Technology, Innovative Small Business Ideas and Innovative Small Businesses. Please visit: http://www.ausinvent.com/