Professional Documents
Culture Documents
PRODUCT DEVELOPMENT
OPERATIONS AND FINANCIAL PLAN
• The business plan will not be complete if the
operations and financial plan are not included.
These two play a crucial role in ensuring that
the business is operationally feasible and
financially viable.
Fundamentals of Product Development
• Before commercializing a new product or
service, the entrepreneur must focus first on
refining the product or service and validate its
market acceptability.
• This new product can be a totally new
product, a new product line from the existing
business of the entrepreneur, a product line
extension, an enhancement, or a repositioning
of an existing product.
Fundamentals of Product Development
• Product development is the process of
developing, testing, and commercializing a
product or service with the ultimate objective
of solving the problem of the primary target
market. It is composed of four sequential
steps:
a) developing a product or service description
b) creating a prototype
c) testing the prototype, and
d) validating the market.
Product or Service Description
• The product or service description simply
describes how a product or service works and
how it benefits the customers.
• A clear product or service description is
important because this will serve as the
blueprint of all business operations.
The entrepreneur has to take note of the
following regarding the product or service
description:
1. It should directly address the primary target
market in personal manner using everyday
language. The entrepreneur should put
himself or herself in the customer’s shoes,
where the product description will be
addressed to.
• 2. It should highlight the features that
will cater to the customer’s needs or
address the customer’s problems.
• 3. Realistic superlatives should be used
for the product description. Motherhood
statements such as “world-class service
or product excellence” may not matter to
the customers at all.
Creating a Prototype of the Product or Service
Revenue is
• the output of a sale wherein the sales price exceeds
the cost to produce the product or render the service.
• considered earned when the product is already sold
or service has been rendered regardless if the
business is paid in cash or credit.
• considered deferred when the product or service has
not yet been delivered or sold but the customer
already paid in advance.
Factors Affecting Estimation of Revenue