Bringing a new product to market involves a lot of hard work and making a number of important decisions. One of the biggest of these is whether you want to start a new company to manufacture the invention yourself or you want to enter into a licensing deal with a third party who can help you do it.
The major benefit of licensing is that it takes away a lot of the pressure of getting the product off the ground and out there in front of the general public – you get royalties for each one sold but you don’t have to accept the challenge of actually running a company with all that entails. For many inventors this is an attractive option.
That said, it’s not easy to get a product licensing deal. Just 10% of inventors looking to set one up achieve it successfully. There are, however, some things you can do to give yourself a better chance of landing that deal. Here are our top tips:
Understand Your Market
It’s not enough to simply know everything about your product and what it can do. You need to understand the market in which it will compete and how everything fits into this, including why your product is the best and what the potential market looks like.
Understand the Licensee
Not only do you need to understand the market, you should develop a deep knowledge of the company you are approaching to get that licensing agreement. It can help you develop the sales pitch when you understand what they might be looking for.
While you’ll want to sing the praises of your product and tell them how great it is, you also need to be realistic. You should be able to outline what potential challenges you’ll face and how these can be overcome.
Secure the Patent
Most businesses that enter into licensing agreements won’t even consider your product unless you have had the patent issued or know that it is pending. Protecting your idea is key but something that many inventors fail to do.
Brush Up Your Presentation Skills
Most inventors aren’t sales people either. When pitching a product idea to a potential licenser, you need to be able to present it professionally. That means having all the market research data and other information collected together. It also includes product drawings, any prototypes and the product specifications. You need to deliver this all in compelling written form and as a strong PowerPoint presentation that sells your new invention perfectly.
Work with a good team
With any licensing deal a standard process that needs to be followed for each licence deal and going outside of this or trying to plough your own unique route can end in failure – it’s easier for a licensing company to say no than it is to say yes to your project.
A good support network will be able to advise on what type of licence to go for and suggest who to approach. It’s rare that focusing on one licensee, for example, works that well. You need to approach more than one company and increase your chances of a successful deal. That can also help you to create more interest and put a sense of urgency and focus on your product idea.
There’s no doubt that finding someone to manufacture your invention and get it to market is a big challenge but it’s not an insurmountable one. If you get the right support which allows you to cover all the bases, you will improve your chances of successfully significantly.
Contact the team at Innovate today to find out how we can help or request a Info Pack – a Guide to Invent for Profit