Why You Should Share Your Design Budget…
INSIDE ITERATE is back, taking on a subject that’s a vital part of the new product development process, inspired by Managing Director, Gethin Roberts. This subject is the value of being open about your design budget.
Here’s a scenario to illustrate just this,
You reach out to a product design consultancy who could partner on your project. The NDA is in place and you share your ideas, objectives, and ambition; upon discussing this, both parties become energized about what could be achieved during this possible project and the creative juices start flowing. The consultancy delivers a quotation for the project and then, everything stalls.
What happens now? Both parties are disappointed; the partner is likely wondering what was expected, how far over-budget was the indicative proposal. You, the person developing the product are disillusioned, questioning how you could materialise this idea.
Here’s a better scenario,
You reach out to a potential consultancy, the NDA is signed, the vibrant conversation about the idea and product purpose takes place, both sides are highly interested in the collaboration and then, a discussion around budget takes place. Next, a quotation is provided by the consultancy (one that is far more likely to work for both parties).
What happens now? The proposal may be accepted, or if not in the first instance, at the very least a more realistic and productive discussion around the investment and deliverables can be had and the initial vision and excitement can be pursued.
There is no doubt that the more you are able to invest into a product design project, the better the end result, the more refined and considered the product will be, this is because a higher level of detail can be addressed through the design. Nonetheless, with a smaller budget in the first instance, great products can still progress. Useful action can be taken to move the idea closer to the intended direction or outcome. In either case, what is key is transparency about budget on both sides.
The Question of Tangibility
At the heart of what a product design consultancy does, is taking an idea and turning it into a tangible product. This leads on to the perennial question we are asked when it comes to proposals and budgets, that it can seem like a lot of investment before something tangible is produced. The natural response – which is to explain that transforming a verbal, sketched, or spoken idea into a physical, touchable product involves research, planning and detailed steps – isn’t necessarily that confidence-inspiring, as true as it is. What is useful, is to have a realistic conversation with your potential partners about what specific actions will be undertaken in each step and what deliverables can be achieved phase-by-phase.
It’s also worth exploring with your potential consultancy how you can use these deliverables, even if they are not tangible. Whilst it’s not advisable to start a project you cannot viably complete, it remains important to recognise that you can gain valuable assets (both tangible and intangible) that can be used to ignite interest from investors and intrigue the market whilst in development. To achieve this however, it’s helpful if your consultancy has an awareness of what you’ll need.
The Longer-Term Funding Perspective
The longer view matters significantly in the context of new product development because making your venture a success is about more than receiving the tangible prototype or output. Additional investment will be required to launch manufacture, to distribute and market your product (a successful crowdfunding campaign, for example, requires a lot of preparation). With this is mind, it’s best to ask, where does the scope of work discussed with the consultancy fit into the entire project and business plan. This leads onto a useful question to ask in the early stages: what do I need to achieve to be able to progress successfully? What is the current priority to be able to open the next door and continue this journey? A typical example of this is where a product development project is self-funded to a point where the concept has been proven, the design has been created and the intellectual property has been obtained to be able to meaningfully engage an investor whose capital could help fund the later development work and production. With this awareness and foresight, your design partner can ensure the work they complete using the initial budget is tailored to your needs and provides the most practical and valuable outputs for the wider context.
By being open about the budget to invest in a new product or design project as well as the longer-term funding plan, your design partner will be able to maximise how they can help you.
Business Development Executive