The average American household pulls in $75,000 per year. That number is moving upwards thanks to low unemployment rates and low unemployment is making people more confident than ever when it comes to spending their hard earned dollars.
If you're a business owner, that should be music to your ears. After all, people spending more money means more opportunities for your sales team to cash in.
Just because people are spending though doesn't mean that they're spending on you.
There is a ton of competition out there trying to cash in on today's up economy and staying ahead of the curve can be tough.
That's why businesses are spending more than ever on research and development (R&D).
If you're interested in dabbling in research and development or investing more in it, below, our team presents a useful overview of what R&D is that could help inform your efforts.
What Exactly is Research and Development
There seems to be a lot of confusion out there regarding what exactly research and development entail. To clarify, R&D encompasses anything that a company does to try and improve existing products or improve new ones.
Therefore, if you are spending money on researching ways to make products and then put resources into developing your ideas into actual prototypes/market ready merchandise, you're investing in research and development.
What Kinds of Industries Invest in R&D?
R&D is a term that's synonymous with pharmaceutical companies given the nature of their field. That's why it's surprising to a lot of people when we tell them that all companies invest in R&D.
As a matter of fact, if your company is selling anything right now, chances are you at least passively invested some resources in researching and developing new products at some point.
Companies like Amazon, Alphabet (Google), Samsung, and Apple all spend billions of dollars on R&D investments every year. As competition gets increasingly tough across all business niches, companies are upping their R&D budgets to keep pace.
What Does the R&D Process Look Like?
Different companies have different methods of approaching their research and developmental workflows. For a rigorous breakdown, see details on how certain industries really dive into R&D. To get a simple overview of how most workflows look, we've compiled a few common steps below:
The first step to R&D is to identify a problem that a consumer has that you feel you may be able to develop a solution for.
Once you've landed on a potential problem, it's time to quantify that problem with data. Taking qualitative and quantitative data into account when sussing out the full scope of an issue is important.
Once data is collected, go back to your original problem to refine it with any findings that you may have run into. This step is often forgotten but very important before proceeding through your R&D workflow.
Define Your Audience
With your core problem set, now it's time to define your customer. Look back at your data and define as precisely as possible who your customer avatar is.
At this point, you should know enough about your audience and their problems to start coming up with solutions. Your internal R&D team will start developing blueprints and prototypes at this point.
Any products that rise to the top during your solutions phase should be rigorously tested with focus groups in your niche. Collect feedback during these tests that you can reference later.
Analyze and Refine
With your test research in place, make adjustments to your product and with those adjustments made, revisit any other steps in the R&D process that seem appropriate.
Finalize and Release
Once you're confident that your product improvement or new product has gone through appropriate tests, it's time to price, market and start selling your new product.
What Are Research and Development's Key Benefits?
After looking through that sample R&D process, you're probably asking yourself if going through all of that trouble is worth your time. We think that the answer is a resounding yes and here's why.
R&D Can Boost Your Bottom Line
When you come up with and launch a successful product, your sales will go up. Remember, even if you have a hot product today, all things have a shelf-life.
If you don't have a product in your pipeline to replace today's hot seller, you're going to hit a sales slump that you won't be able to claw out of quickly.
You'll Remain Relevant
Today's consumer is very demanding and is always looking for the next big thing. If your company comes out with a good product this year and does nothing to one-up itself over the next few years, you're going to fade from the consumer's conscious.
R&D will help you avoid that.
You'll want to talk to your accountant about this but many areas offer tax breaks for money that's spent on research and development. Claiming these tax breaks could save you massive amounts of money as you develop new products.
Closing Out our Brief Research and Development Guide
R&D is important to the continued success of any business operation. After reading this article, we hope that you have a better understanding of its importance and are more willing to invest in your company's R&D endeavors.
There's no better way to sell the products you come up with than through eCommerce. To give your businesses website a massive boost so that it can connect with more customers, check out the web building tools that we offer on Weebly today!