In the quest to get their products or services to the public as soon as possible, small businesses can sometimes neglect the details that are needed for success.

Small businesses have always been known for their ability to spot market opportunities. Business history is filled with dramatic innovations created by small firms - from airplanes to safety razors. But when it comes to reaping the rewards of their innovations, the record for small businesses has not been so favorable.

"Radical inventions have been sold, leased and otherwise put into the hands of giant companies, which have then proceeded to develop them and turn them into products that have transformed the way Americans live," states the U.S. Small Business Administration.

So, what is the reason for this poor record? Well, for small businesses, often their go-get-'em attitudes can be their downfall. In the quest to get their products or services to the public as soon as possible, small businesses can sometimes neglect the details that are needed for success. To avoid this, they need to do their homework and ensure that these new services and products are offered to the right market, with the right message, at the right time.

So, how can you ensure that your new service idea, product innovation or geographic expansion doesn't fall into this trap? There are three major steps: know your company, know your market and understand the competition.

Know Your Company
When Concrete Solutions Inc. (CSI) in London, Ontario, had the opportunity to launch an innovative sound barrier product in 2004 - in the midst of rapid expansion with a new line of retaining wall products - the company had to take an honest look at itself.

Its factory was operating at near capacity, its yard was jammed with new products and the sales team was just getting comfortable with the technical specifications of retaining walls. The reality was, it wasn't ready. CSI knew it could delay the new fence product launch a year without missing the boat. That kind of honest reflection saved the company countless hours of management effort, the stress of everyone trying to do more than was possible and a failed market entry.

Here are key questions to consider in assessing your company:
· What are you good at? Product innovation? Distribution? Customer service? Every organization has a different mix of skills, and all have implications on your culture, your cost structure and your ability to pursue new opportunities.
· How does your new concept fit within the company's strategy?
· Does the organization have the resources - people, space, money - to pursue a new opportunity? If not, how easy is it to get those resources?
· Are compensation systems aligned to encourage innovation, or will people avoid new opportunities for fear of the unknown - and its impact on their income?

Know Your Market
Dale Carnegie, author of the pioneering business book, How to Win Friends and Influence People, has a great way of describing the importance of knowing your market.

"I often go fishing up in Maine during the summer," he writes. "Personally, I am very fond of strawberries and cream, but I have found that for some strange reason, fish prefer worms. So when I go fishing, I don't think about what I want. I think about what they want."

And it is not just about knowing what your customers want that is important; it is also understanding how they behave. Here are the five things you should find out about your potential market:
· Buyer characteristics (demographics, lifestyle and industry stage)
· Decision criteria (price, quality, features, service and brand)
· Decision-making process (structured or spontaneous)
· Decision timeline (length of consideration)
· Purchase participants (users, influencers, coaches and buyers)

That may seem like a lot to cover, but you have help. The best way to answer these questions is to ask prospective customers. You'd be amazed how happy people will be to tell you what they need if you'd only ask.

Understand the Competition
When PostNet entered the Canadian market in 2004, it surveyed the competitive landscape to understand the strengths and weaknesses of its rivals and determine where the opportunities existed.

PostNet identified Mail Boxes Etc. Inc. (now The UPS Store) as an established competitor with locations across Canada with a recognized offering to consumers. It also found numerous small outlets providing postal and business services. With its in-depth knowledge of competitors, PostNet was able to spot where the gap between the competitors' offerings and the market needs existed (the franchise had also done solid customer research to understand their needs).

As a bonus, PostNet understood that Mail Boxes Etc. would soon be rebranding to the UPS banner, creating a small window of opportunity to leverage market confusion and attract new customers to the PostNet brand.
Five questions for your competitive assessment:
· Who are the competitors (direct and indirect)?
· What do they offer (product line breadth and depth, characteristics)?
· What are customers' views of the competition?
· How are competitors positioned in the market?
· How might the competition react to a new entrant in the market?

Bring it All Together
When each of these three areas come together - your company, your market and your competition - you are nearly ready to launch. At this point it's vital to ensure that the gold mine you see is not filled with just pyrite. And you can only do that through the numbers. First, you must:

• Project the revenue potential of your concept based on the customer demand and market size.
• Determine your costs. This includes tangible costs including fixed costs like rent and salary, and variable costs like raw materials and labor, as well as intangible costs such as time, effort and stress.
• Remember: Revenue - costs = profitability.

Once you know whether your concept is viable, you are ready to build your plan. Your plan should be as detailed as possible, outlining the resources, activities, budgets and measurements needed for success and a timeline to achieve your goals.

In addition to the above objectives, there a few final tips to keep in mind. First, this three-step process doesn't have to be expensive or time consuming. Also, don't get married to your idea; on average, companies develop one successful new product for every 11 new concepts they consider. Finally, remember the fundamental Ps to include in your marketing plan: Price, Product, Placement, Positioning, Promotion and Practicality. The last P is important because, after all, if it's not practical, it won't work.   VTR_US

Lisa Shepherd is president and CEO of Mezzanine Business Consulting, Toronto, Ontario. Send e-mails to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .