The Invention Business
What's the best business plan for my invention?
The number one business plan is not going with your gut. Write a formal business plan which is: "What is your product?" and "Who are you going to sell the product to?" So, you have to write and understand the word business. You provide goods or a service to a customer for a profit. So, you have to figure out with your business plan who your customer is, and then how are you going to sell this product to the customer. Then, you have to figure out what your costs of manufacturing are, your costs of distribution, your costs of marketing, and then your cost of follow up. Very few people factor that in. If you're inventing a product you have to include the costs of feedback because that will make your product better the next time you go to manufacture it. Another aspect of inventing as a business, that you have to be willing to sell the product outright. There is always a price in my head. Anytime I bring a product to market I have a number in my head and if someone gives me that number, I sell it.
Who can help me fund my invention?
This is a question that I get all the time. And, I tell people that you should fund it yourself. Your money spends differently than other people's money. You make better decisions when you spend your money. If you're given an open bank account you just buy things that you might really not need, but if it's your money, you'll make those hard choices. The second group is, outside of yourself, your friends and family. After you've developed your idea and you're able to shop it to your closest friends and family, you can ask them for some seed capital. If you take a look at some of the largest companies in America, it was all based on friends and family's money. Hewlett Packard -- that wasn't their money. It was their friends and family's money. If you take a look at Apple -- all of their friends and family's money. If you take a look at Ben & Jerry's -- friends and family's money. If you take a look at a lot of innovative, unique inventions to market, it's been friends and family. Then the third level is licensing out your product and actually getting front-end money so you can take your idea, license it and get paid that way. The fourth way is actually selling the product. So, you can go to a product mill and they can buy it or you can go to a large industry and sell it. The last way is you can build the product and sell the whole company.
How can I sell my invention?
Selling it depends on what phase of development you're in. If you have an idea, I've heard of people shopping ideas to corporations in a blueprint, but you're usually not going to fetch a high price. If you bring the product to market through the incubation to the deliverable (the for sale), you can generate a higher price. The three best ways to sell a product or invention is number one on the internet - you can, for under a few hundred dollars, set up a web portal and you can find a worldwide audience for your widget. People will click and then buy your product, it's an amazing dimension to inventing because you have an idea, make a little web page, you meta-tag it or keyword it and the next thing you know there's people that want to buy your product - that's a phenomenal way of selling your invention. The second way is actually selling it via distribution channels, so finding retailers to sell it. The third way is partnering with a distributor and the fourth way is getting royalties and the fifth way is selling it to an industry outright.
What are some great places to sell my invention?
The number one most efficient, fastest, cheapest way for selling an invention is on the web. Where else can you, for 99 dollars, get a cool webname, a cool web-portal, have a digital camera, take pictures of your cool product and start selling it? It's effortless, you can sell on eBay, you can sell via Amazon, you can sell on Craigslist, it's phenomenal. If you have something unique that services a niche, just place it on those locations and sell it. The second way that you can sell a product is via retail distribution. You're going to need to go to a trade show that sells your type of product. So if you've created a housewares product, like an ice cream scoop, you need to go to a homewares expo and buy a booth, and then you can sell your product to retailers. You'll meet distributors, you can sell your product to distributors. You don't make as much money but you get greater volume, and hopefully with that comes more profit. The last way to sell your invention is you can take your product and license it to a major manufacturer hoping that he buys the product outright.
Can an 'infomercial' help me sell my invention?
What you find is that it's very expensive to produce those segments and it's very expensive to distribute that content. Those are for products that have really been around for many, many years. One invention is the Foreman grill. If you really look at the Foreman grill, it's not an invention. It's just a modified Panini grill. There's really no change. They made the design a little different. And then the grilling marks are a little thicker and deeper and they're angled to take the fat off. Outside of that, that's a Panini grill. Period. But he is who you're buying. You're buying George Foreman's smile and his charm and his 15 kids, and so he's really selling him. And he's really the comeback guy. He's the elder boxer who went back in the ring with a thirty-year old and beat him. So, you're really buying the story of George Foreman, you're really not buying the Foreman Grill.
How can I sell my invention through a shopping network?
Every year, there are 70 thousand products brought to market. Every year, I call it the top ten. It doesn't mean they're the best products. These are the top ten that make it to home shopping network. Most people think they can take their invention, walk in, meet with the buying teams which are hundreds of people. Tens of thousands of people show up to pitch their idea. Of every 70 thousand products or more, ten show up on the home shopping network. This is a phenomenal, phenomenal event because when you show up with your little widget, your house ware, your invention, what's nice is that they are communicating to the world for two minutes and you'll sell millions of units. It's amazing. The reality is though, do you have a million of these units to sell? At that point, before your widget gets to the marketplace, I highly recommend having a distributor or a major manufacturer behind you and then entering the product after a few years of being on the market because when you go to home shopping network, it is out of the world in volume. Millions of units are sold.
