Updated: Jan 6, 2021
You've likely been faced with the question of whether or not you should offer a service or product in addition to what you currently provide as a business owner.
It can be unnerving to take this leap because maybe you're thinking you're one mis-step away from being the clammy entrepreneur on ABC's Shark Tank where Mr. Wonderful (Kevin O'Leary) is saying you're not specific or niche enough and "I'm out."
But if we as a society limited ourselves to this concept too strictly, we'd only have Chik-fil-A sandwiches and no nuggets or milkshakes. We'd never know the beauty of an appliance warranty or be able to get more than a haircut at a salon. You get it.
That being said, let's talk about three sure-fire ways you can know if you should say YES to an add-on for your business. After all, some entrepreneur's biggest money makers are not always their first idea.
The first and perhaps BIGGEST question to ask yourself: "Is there a strong viability factor?" In other words, will your clients use it or not?
Although simple, this step in the thought process should not be just a thought.
By this point, you've probably already done enough "thinking" anyway. Put action into figuring out whether viability exists with the following tasks:
- research the competition to see who offers this service, for what price & how it's presented.
- poll your audience to get real feedback from the people that matter, your clients!
- give it away for free to test the response to the add-on's value (part of the investment).
And speaking of VALUE, this is a HUGE part of determining the viability factor. You as the owner must find value in the service or product first and foremost. To determine this, just fill-in the blank when asking yourself,
"Does this new service aid in providing ____________? [insert your current product / service]"
Example: the question to myself would be, "Does this new service aid in providing virtual staging?"
You want to make sure this new service will make your client's experience with you either easier or elevated (or both).
Next up, is ensuring the new add-on is something you can manage without compromising your clients experience with your current offering.
Consider how much of your time this will take from start to finish. Do some math on what tasks you personally will need to carry out in order to launch, grow and manage this new offering.
Take inventory of the skill sets on your team (even if that is just you) and determine if the qualifications exist.
There are basically 3 strategies to offer an add-on with pro's and con's for each:
Option 1: Do the service or create the product in-house.
Pro: Less overhead and moving parts
Con: Quality and scaling challenges
Option 2: Outsource the service or product including delivery.
Pro: Consistent timing and less to manage
Con: Lower margins and having to trust the professional
Option 3: Create a hybrid of in-house & outsourcing the product or service.
Pro: Control over client experience
Con: Not hands-off enough and risk of being the middle-man
Lastly, the investment. In addition to the time and money you'll need to put in, be sure to account for the emotional investment required when questioning whether or not you can pull it off successfully.
When you're doing your do-diligence as an entrepreneur and running the numbers on the earning potential of a new offering, here's a list to remind you of the likely associated costs to consider:
To be able to DO it: equipment, software, space, storage, testing, tools, & manpower.
To be able to GROW it: web development, content creation, digital marketing, printed advertising, networking, & surveying.
Unless it's a completely new concept, looking into the average profit margins for what you're considering is good idea. This will help you determine your price point for this offering.
A healthy reminder is that just because the numbers don't look too appealing at first, don't forget the magic of volume.
When it comes to planning anything for your business, the important thing is to have the right people, a quality product and a streamlined process in place.
Vince Collura @ VHT Studios
Gary Gomez @ Gary Gomez
Devon Pastorius @ Devon Pastorius
Kerry Riodoran @ Blu Lemonade
If you'd like to know more about offering virtual staging as your own service by teaming up with Arrange, click here.