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Imagine this. You start your company with this great product or service, and for years it keeps going, and it’s a bestseller — until it is not.
Sure, there are some products that have been around ceaselessly — think Coca-Cola, which was invented in 1886. Or Stormy Kromer Hats, made in my home state of Michigan. These hats have been popular since 1908. When it comes to large, well-known financial organizations, JPMorgan Chase & Co. is one of the largest in the world eldest.
There are countless examples of firms, brands, and products with long and storied histories. Some have stuck to their original “recipe.” Others have adapted, improved, and expanded their product or service line. And still others have watched their once-bestseller slowly decline. It’s hard to think about abandoning something that was the foundation of a company, but it may possibly make good business sense. So how do you choose when to stop making something or providing a service? When is it time to improve the product or provide latest features? When is it time to adapt?
Here are some things to consider.
Follow the money
The biggest surprise for many business owners is that the product they love to make or the service they love to offer is now not appealing to the market. The truth is that products and services have a predictable life cycle. There is a stage of development, growth, maturity and decline. It is different for every industry, but unless you are making something timeless like salt or tobacco sauce, you almost certainly won’t make it to 100 years old.
When you follow the money and analyze the sales and margin data, reality sets in. People are simply not buying your product or service. It could also be a cost issue. Perhaps the rising labor costs to produce your product have made your product too expensive. Perhaps the price and availability of raw materials are making it difficult to consistently produce, and customers are finding alternative products. Unfortunately, many business owners wait too long to recognize the inevitable. There simply is no profitability.
Prepare for change and adaptation
The pace of change today is almost unfathomable. You think you have just fallen into a rhythm, and then you definitely’re jolted by changes in technology, consumer preferences, and limitless disruptions to the economy. test on the changes impacting businesses found that “overall, across all six factors, the pace of change has increased steadily since 2019 — 183% over the past four years and 33% in the past year alone.”
Change is all the time hard. Some firms are afraid to try something latest and prefer to do what is comfortable. During the last pandemic, my employees wanted to do what we all the time did – get on planes and go to clients to record videos.
Many of our clients didn’t want us on-site but still needed to create messaging. We invested in latest equipment and technology that allowed us to send clients a “virtual studio” set and then remotely capture and control the video. My staff was concerned that folks wouldn’t want us on-site when things returned to normal. Some clients were wary of the technology. Ultimately, it turned out to be a useful gizmo, and the change allowed us to offer a latest way to create content in certain situations.
For those that create products, adding latest features may be a way to extend the lifetime of products. If latest products are needed, making them backward compatible makes change more acceptable to customers.
Follow technological progress
Many products and services are becoming obsolete due to technology. In my world, floppy disks, VHS tapes, CDs, and DVDs are becoming obsolete. Think fax machines, cars that don’t require keys, old TVs. “Dumb” phones have been replaced by smartphones. Personal trainers have closed their studios because of online programming. The examples are limitless, and it’s easy to get lulled into pondering that what you offer is so unique that technology won’t affect you. Nothing might be further from the truth.
Keeping up with technological advances is difficult. However, there are several blogs that provide good information, in addition to online communities which you could join.
Stay one step ahead of others
For years I have advocated that business owners need to be one step ahead of the pack when it comes to innovation. But as I wrote in my book, Small business for big thinkers, There is a danger in being too far ahead. This is very true for small businesses. If you have to create a market for a latest product or service, it may possibly be expensive. That doesn’t suggest it may possibly’t be done, but it does require planning and constant monitoring of current product and service offerings.
When customers start to change their buying habits or simply stop buying, be proactive. Maybe they now not need what you offer and it is time to stop selling the product. Maybe they need more features or different functionality. Maybe it is time to adjust or improve the product.
Whatever you do, don’t wait until your product reaches end of life… or your service fails to meet revenue expectations. You want to stay competitive, and developing latest offerings or adapting existing ones takes time.