How to Start a Small Business: Step 4 – Product Development

July 15, 2020
Man standing by two women working at computers

Product development is a process that all creators and inventors must undertake. It’s very time intensive and will require multiple revisions. However, it’s a necessary process that will turn your idea into something tangible. There are some things that you’ll want to know and a few things to remember. Here is what you’ll want to know if you are interested in developing a product from beginning to end.

What Is Product Development?

Product development consists of implementing strategy, organization, concept generation, marketing plans, and commercialization of a new product. It is a multi-step process beginning with an idea and ending with a prototype that creators will hone and perfect. 

How to Develop a Product:

The product development process comprises several steps: A description of each step follows.

Ideation and Brainstorming

Brainstorming and ideation are the first things to do in the product development process. There are many strategies that you can implement to brainstorm. 

You can envision what you want your creation or idea to change. You can think about how your idea will solve a current issue. You can also think about how your idea can facilitate, improve, or modify an existing product’s experience. Try thinking about the practicality of your concept. Not every product ends in the form factor that it started, especially for a tangible or technological product. 

Remember to take notes and provide as many descriptions and details as possible. You can expedite this by drawing, listing, and writing exhaustively until you evoke all of your thoughts. After doing so, you’ll research how this idea can generate interest. 


Throughout the early stages of the product development process, you must conduct research. Three types of research will assist you during the product development process: Market research, primary research, and secondary research. 

Market research occurs when potential customers provide their input about a new product. Market research can take the forms of focus groups, product testing, and surveys to target markets. Although the creator of a product can conduct market research themselves, most companies hire a third-party to complete this step. 

At this point in the product development stage, it is premature to receive feedback about your product. However, the goal of market research is to collect ideas, opinions, and thoughts in hopes of improving and refining it later.

Next, you may use primary research to collect information about a product. Like market research, this is another valuable strategy to collect data. However, primary research almost always involves hiring a third-party. There are four ways you can gather primary research: 

  • Face-to-face or telephonic interviews
  • Focus groups
  • Observations
  • Online surveys

No matter the choice, the results will provide further feedback to enhance the quality of your product. 

A less costly option is secondary research, or research already conducted by others.

For example, you can find, note, and sort through research from others with similar products. You’ll quickly determine whether previous efforts were successful in a way that primary research may not necessarily provide. This will be helpful if you want to assess your product’s potential clientele or demographic. 

Think Outside the Box

As you collect and ponder how to use the data from the interviews and research, it is crucial to think outside the box. While the feedback that you receive may cause you to reconsider things, remember that this is a normal part of the process. Continue to ponder how your product can help others and then plan additional steps.


During the planning step of product development, you must ponder several scenarios. Having a plan for your product will safeguard its development. You want to plan for any costs tied to the development of your product. Research, until now, is the only significant cost. However, other steps, including partnering up, prototype production, and refining your product, will have an undetermined cost. 

Also, you may want to consider the costs of creating, improving, and maintaining your product. These costs will fluctuate, so plan accordingly. Refer to your brainstorm and ideation notes for your product in case you prepared for any changes. 

Partner Up

After planning how you want to move forward with your concept, creation, or idea, the next step is to partner up. Having a partner to market your product will help you, but there are a few things to remember. 

First, it is best to have clear expectations. By this point, you should have a clear idea of the expectations, limitations, and ramifications of what you want to create. You also need to ensure that your product ideas are firm. 

If there are any deliverables that you require, make sure that the terms are clearly explained and in print. At this point in the product development process, you may receive feedback and information from others within the partnered group. Next, consider what you’ll accept as the finished product. While it is likely that this has adjusted since the ideation phase, now is when you want to confirm that your product is feasible in every way.

Finally, ensure that you and your partner agree on what the finished product is. There isn’t much time after this step to change anything. Only proceed when you and your partner’s product development goals have been met.


Creating a prototype is the penultimate step to the product development process. It is at this point that your efforts will materialize into a product that you can test. While this product isn’t the final version, you’ll still want to receive ideas, opinions, and thoughts from others.

You can finally implement your market research from previous steps, or implement market research with your prototype, to improve and refine your product. Throughout market research, you’ll receive feedback from potential customers. They will sample, try, or use what it is you’re trying to develop. Feedback will become abundant during this period, so note anything useful. This can make the last step, improving and refining your product’s concept, even easier.

Improve and Refine

While the final product may not be your prototype, now is the time to hone in on your design. You may need to call designers or even hire employees to produce your product on a larger scale. If this is the case, provide them with a surplus of details. This will decrease the chances of making costly errors that will hinder your product’s success. 

Early on in the actual production process, it is natural for errors to occur. Make sure that you’ve allocated enough time for any time-based errors to correct themselves. As time passes, you’ll refine your product, leading to further refinements and increased efficiency.

Once you have your product development process down and a prototype or package of your services, you’re ready to move on to the next step: marketing your services and building a website.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. 1-800Accountant assumes no liability for actions taken in reliance upon the information contained herein.