Commercial Loans – Take All Aspects In Consideration

As the saying goes, taking a loan is easier than surviving with it. A shrewd businessman is one who borrow but with an eye to repay it as soon as possible. Sometimes, business requirements arise because you get a new business order hat is hard to manage within your own business funds. You obviously cannot afford to lose big business opportunity only because the funds are not there.

These and other similar situations force you to take help of external sources of financing. These sources may be temporary or permanent, depending on the nature of funding. Large body corporate often have huge financial needs, and therefore, they resort to public financing by inviting deposits or going for a ‘rights issue’ meant for the existing shareholders. On the other hand, a new business concern or sole proprietorship undertaking would obviously not be able to take benefit of that sort – neither are these meant for them.

Before applying for commercial loans, first of all decide the type of debt financing that your business firm will be comfortably able to get. If you do not own any property in the name of firm, secured commercial business loans are out of question. You will have to rely on loans that do not require any security. These loans will offer you a limited amount – upto £25,000. The interest rate is likely to be little more than what you can get by pledging some property. The amount of loan that you can qualify for can be increased by involving some property in the loan transaction.

The Need for Product Innovation

Developing new products and launching them in the marketplace can be a difficult, costly and even dangerous business. So why do it? Why not leave well alone and be content with profit from existing products, concentrating effort on expanding sales of these products and finding new markets for them?

One reason is that seizing new opportunities as they emerge is a way to increase profits. (To be first in the field with a successful new product gives one the chance of creaming off large profits before effective competition develops.) But the main reason is that it is dangerous to assume that profits from existing products will continue at present levels for ever. The product life-cycle concept tells us that they will certainly not continue for ever. At different rates, over varying time-scales, all products eventually achieve market saturation and then start to decline. Even while sales volume holds up, profits may well not; and retaining sales volume and profits may call for regular updating of existing products.

For most companies, therefore, a programme of product review and development is essential; and, for all companies, to ignore this area of activity is highly dangerous. A McGraw-Hill study in the United States showed that in 1963 the percentage of sales accounted for by products introduced since 1959 was 28 per cent for transportation, 18 per cent for electrical machinery, and so on, through a whole list of categories. In the consumer goods fields successful new products introduced more recently -include a wide range of increasingly sophisticated computer games, the ‘superglues’ and a whole host of pre-prepared meals for cooking by microwave.

In consumer durables we have seen the successful introduction of video cameras and answering machines, with mobile telephones and fax machines for home use not far behind. Innovative services (intangible products) include direct purchase of insurance by telephone and ‘home banking’.

The most ‘safe’ and inexpensive way to launch a ‘new’ product is modifying an existing product.

New Products from Old

We first need to be clear what is a new product. There are basically three clear kinds of new products:

1. Innovative products which are unique products for which there is a real need, not being met satisfactorily by an existing product. Penicillin when first introduced fell into this category, as did the telephone, the internal combustion engine, and chloroform. We can also describe as innovative those products which, while replacing existing goods that have been satisfying existing markets quite well, offer totally different solutions. Examples would be television partially replacing the cinema and the radio, the zip fastener and later Velcro instead of strings or buttons, and solar power for other energy sources;

2. Adaptive products which offer significantly different variations on existing products: they include such items as instant coffee, freeze-dried foods, self-adhesive wallpaper, and typewriters with a memory. Another kind of variation is represented by package changes, styling modifications, new designs and colours.

3. Imitative products are already being sold by someone else but further sales opportunities exist for an additional brand, with or without minor modifications. The divisions between these categories are obviously very fuzzy. Indeed, some authors have distinguished as many as a dozen different ways in which a product can be ‘new’.

The truly innovative product is rare. Adaptive new products can sometimes necessitate a great deal of new technology and extensive research and development, though a ‘new’ product can often be produced by changes to an existing one. These may range from relatively minor changes, which effectively extend the life-cycle of a product, to much more extensive improvements.

An example quoted by Peter Drucker that covers both is nylon, which was introduced in the U.S.A. by Du Pont and fairly rapidly became the dominant fiber in women’s hosiery. However, once this market was saturated, the growth curve flattened. Du Pont had anticipated this and had developed strategies for providing further increases in sales of nylon stockings by such tactics as the following:

1. Introducing a wider range of colors, leading to an increase in the number of stockings bought by each user and a tendency to wear different colors with different outer garments.

2. Developing new uses, such as stretch stockings and socks. In addition, they moved into other fields such as tyre cord and carpets. In this way nylon sales showed an overlapping series of life-cycle curves, giving a continuing upward trend.

The nylon success story depended both upon changing the product for existing users and making it suitable for whole new markets. Changing products for existing markets can be done in a number of ways, in particular by improvements in quality, features, and/or style.

How Private Label Products Are Suitable to Dynamic Market Environment

WHAT IS PRIVATE LABELING

Private labeling of products refers to a business practice in which manufacturing is done by one company, and the product is sold under the brand name of another company. The company, whose brand name is being used to sell the product, directs the manufacturer to make the product according to specific design, composition, and packaging.

This practice has been adopted mostly by companies that are starting in the market. But they are also popular among some top brands, namely Nike and apple.

This kind of labeling is practiced mostly in personal care products, clothing, foods, pet foods, and shoes. They are most relevant for products that require high adaptability to market demands and constantly need new variations to be the market leader.

PROCESS INVOLVED IN PRIVATE LABELING

The first and foremost thing that you should do when you contact a private label manufacturer is to ask for samples of the design you selected for your product. In this way, you can test the product’s quality before it is sold in the market.

After you are satisfied with the product’s quality, you must select the right packaging for your product. You should select the best type of packaging which suits your budget and is suitable for your product. Let your label manufacturer know if you like any of their available packaging types or if you want to mix different types of packaging to create a unique look for your product.

Then to finish the look of your product, you should finalize the logo of your brand. If you are an existing company, you can use the same logo and just direct the manufacturer regarding your logo’s placement on the package. You can also ask for a graphic review to take the final call before the product is launched in the market.

The label manufacturers also help you to name your product. Choosing your product’s right name is important because it is through that name that the customers will connect with your brand. The option of color-coding labels and having bilingual label content is also possible in some cases.

Finally, when you have figured out all the product details, you can start selling them. The label manufacturer should send you a customized form that will be unique to the company. Such a form will preserve all the details of your product and easily reorder items when the old ones are sold.

ADVANTAGES OF PRIVATE LABELING

This labeling of products helps to save operating costs for the company. Since label manufacturers handle the high-investment works such as manufacturing, packaging, and labeling, the company can save a lot of capital and use it elsewhere, such as in marketing.

Since investment is low, the price of the products can be kept low. This may lead to a higher volume of sales and increase the profit margin of the company.

If you have selected the right label manufacturer, then the product quality will be high. Since the product will be sold under the company’s brand name, this will lead to high customer loyalty to your product.

Because such products are adaptable to changing consumer behavior, companies selling such products enjoy stable market conditions.