According to Chris Forbes, co-founder of The Cheeky Panda, it’s vital to do your homework and comprehensive product testing, before turning your idea into a business.
‘As a concept, The Cheeky Panda was born more than six months before it became a reality. Devising a plan to manufacture bamboo toilet paper doesn’t just happen overnight. There are many ‘corridors’ to travel through before your idea becomes a product. You have a plan, you test the water, and then you take the plunge. Each step must be thoroughly investigated and followed through, before moving on to the next.
My wife and I first came up with the concept for Cheeky Panda toilet paper in 2015. However, it was important to make certain that our product was high quality. For six months we tried different iterations of the product, and used it ourselves, to make sure we were happy with it and that it flushed okay.
With any business venture, the testing and trialling of a new product is essential. How else will you discover if it has the potential to be successful? Even if your idea is not a product, but rather a professional service or software solution, it remains important that you understand the following principles:
Is the product filling a hole in the market ‘ no pun intended when it comes to toilet paper!
With regards to our product, we knew that everyone uses toilet tissue. And by using bamboo ‘ the world’s fastest growing plant ‘ it seemed a more than sustainable solution. However, if bamboo was not such a speedy grower, or if the quality of paper we manufactured was of a poorer quality than it is, there’d be no hole left to plug.
Is there demand for these products?
For Cheeky Panda, we used crowdfunder to test demand for the new toilet paper. It was the safest route into business. If demand had been low, then we would have probably mothballed the idea. Thankfully, this didn’t happen and we ended up with hundreds of customers pre-buying the product. This meant we’d created a product consumers wanted.
What should the price be?
There are a number of factors for determining this. First, what are consumers currently paying and what are they prepared to pay? For Cheeky Panda, we could price our products close to those used by Andrex or Kleenex. This helps to set the price point. Our business model is ‘stack it high and sell lots of it’. Always remember margins only work with a large scale rollout.
What to do and what not to do!
Entering into an oversubscribed market space, and with a product that is more expensive than its rivals, is certainly high risk: For example, if you opened a hairdressing salon in a town that already has 10 salons ‘ and you are planning to charge more than the other salons ‘ will your business thrive? Probably not, unless you have already developed a good reputation and have an existing client base that is prepared to support you from the start.
The same goes for digital marketing or a recruitment business. Sectors that already have lots of established market players are tough to break into. However, if you went into an area such as sustainability, which is what we did, and you offer a ‘plastic free’ alternative, then the market appears to be trending away from big brands. These are markets which currently enjoy greater growth prospects and better opportunities.
As long as you can make the numbers work on price and margins, then feel confident there is a market waiting for you.
If you need advice and an opinion, ask a ‘qualified’ stranger what their thoughts are regarding your business idea. Try not to seek advice from family and friends, as their answers will not always be objective. They will try to encourage you, but maybe at the expense of realism.
Run a poll on Linkedin or Survey Monkey. This should help you find out if your idea is worth pursuing ‘ or at least taking further.
Time is money and my mantra is: ‘Better to fail fast than spend three years on a concept that eventually stutters to a close.’
Timing is everything. You may have an idea too early in the evolution of world technology or trends, or arrive at it when the market is already saturated or slowing down, or no longer vogue.
Entrepreneurship has high risk and high rewards, so be sensible and follow your intuition. Always back it up with data and good luck. Next month I’ll discuss how to raise capital.‘