Business Idea for High Chair Replacement Parts

New business ideas sometimes come from simply paying attention to the details of the problems of people or businesses, take Nancy for example.

She works for a restaurant and noticed that the buckles on the high chair belts got a lot of wear and tear and would break 4-6 months after buying new high chairs. She realized that the failure point was typically the buckle and made her own replacement belt with a higher quality buckle.

After installing her belt at the restaurant for a successful trial period, the restaurant manager ordered a set of high chair replacement belts from Nancy.  Realizing she might be onto something, Nancy signed up for some small business consulting:

“I met with a member of SCORE (Service Core of Retired Executives) just before Thanksgiving. During our one hour meeting, they expressed excitement with my business proposition and more so by my projected profit margin.  We talked about the longevity of such a business knowing the need for replacement seat belts are necessity not a luxury.”

Business Stats

Industry - restaurant Service Supply

Market - restaurants that use high chairs to serve young kids

Competitors - Four competing companies

Need - Lack of quality replacement parts

Trends - Disposable income is down for customers and food costs are higher so many restaurants are tight on cash

Unique Selling Proposition - Better quality, stronger buckle

Product Costs & Pricing

The first thing I would do if I was Nancy would be pricing research on her competitor’s replacement belts and on the costs of her own production.  I’m assuming the competitor’s buckles are cheaper to make since they’re a lower quality. 

If they can be more price competitive since thier costs are lower then it could be a hard sell to businesses to buy a more expensive product.  Of course, if Nancy can prove that the belts last 2–3 times as long, that could save the restaurant owners money depending on how Nancy prices her product.

Another area I would research extensively would be the costs to ramp up production of the belts.  If Nancy is profitable making them herself but due to demand has to spend money on people or equipment to produce larger quantities, how will that effect her pricing and profits? 

I would interview restaurant owners to find out who they buy from and why.  I would ask questions about the importance to them of the trade-off between quality vs cost.  Many small restaurants are dealing with higher food costs and customers with less money to spend.  Would these restaurants be looking to spend money on replacement belts in tough economic times?

I know I’ve been to many restaurants where we go to strap in our son and the belt is broken or missing.  So the belts do break, but how often do restaurants replace them?  Are restaurant owners content to let them sit broken from an extended period of time before replacing them?

Legal Issues

Any time you create something for kids you have to deal with legal concerns, especially if it’s a safety or restraint product.  I don’t know if there’s a certification process the belts would have to go through and how that would impact the cost and time of production. 

I would definitely do my research on the liability questions and consult an attorney on the matter.

Marketing

I would come up with a memorable product name that conveys the value of her belts.  Nancy’s unique selling proposition at this point is quality and durability, perhaps a name for a belt that’s secure and durable would be DuraSecure Belts.

Another place I see broken belts all the time is in shopping carts in grocery or retail stores; this could potentially be another big market for Nancy’s product. 

Small Business Assistance

Nancy has designed her marketing postcards and business card through VistaPrint but is still in need of a business logo.  She’s creating a website using Microsoft Office Live Small Business but needs design work done on the site and also wants to set it up so she can take orders through her site.

Nancy is also a little low on funding.  She’s used her seed money to buy the supplies to make her first round of belts that’s shes going to be marketing to local restaurants next month.  Of course if she can win the Small Business Stimulus package she could certainly use the cash prize  

If Nancy’s response from area restaurants is positive and she needs more capital for growth another funding option is to borrow money from Lending Club.  A lot of small businesses are turning to Lending Club to raise money during the credit crunch, this Lending Club review walks you through the process of applying for a loan there.

If you have suggestions or comments for Nancy’s venture, please leave them below.