You may love to be innovative and come up with new products or services. But you might not be interested in starting a business. Perhaps, you may be seeking ways and means to sell ideas to companies. Instead of starting a full-scale business, you can spend your precious time coming up with brilliant ideas. In such a case, you can license your invention idea. It is the process to sell your idea to any company that is interested in developing it fully. It will take the responsibility to carry out all essential business-related tasks. This is a great idea to make good money for those who are short on finances.
Smart ways to sell ideas to companies
1. Gather valuable information:
With more information, you are likely to be better off. But you need to clear in several aspects, like:
Know about the production:
This will be helpful if your invention involves unusual manufacturing materials or techniques.
Perform legal legwork:
Find out if you can patent your invention or reproduce the same without infringing on other filed patents.
Know your market:
Get plenty of feedback on your invention. A better way to sell ideas effectively is to group tests among family, friends and others. Find out what’s selling, what is available and who produces it.
2. Prepare professional presentation:
The next step to follow to sell your idea to companies is to gather relevant information. You can present the same to all potential licensors. You need to come up with a 3D prototype model backed up by a sell sheet. This can help convey better your ideas. Sell sheet is to state the following:
- Product’s market
- Invention legal status
- Benefits and features
- Challenges and problems faced
3. Pinpoint targets:
Identify appropriate contacts. Prepare a minimum of fifty prospective targets. More prospects will mean more opportunities to sell ideas easily and quickly. Come up with a focused list to derive effective results. For consumer items, visit any local store and identify manufacturers offering similar products. you can also refer to online databases.
4. Qualifying targets:
Prioritize the shortlisted companies. To sell ideas to companies, you need to consider several factors.
a. Similar product line: Your invention should match closely the company’s existing product line.
b. Size: Your invention is likely to benefit small companies and hence make better prospects. Small companies are more flexible than bigger ones as they do not face bureaucracy issues or in-house’ product development employees.
c. Company policy: Some companies have in place inventor-friendly submission policies.
d. Manufacturer reputation: If you plan to sell your idea , then it will be wise to deal with companies who respect inventors’ work.
e. Direct access to the main decision-maker: This is crucial to ensure you can effectively sell your idea without much trouble or hassle.
5. Complete the sale:
Unfortunately, there are no exist rules or terms to negotiate effectively and correctly a licensing agreement. Rather, the perfect agreement can be termed to be one which provides you and the company with a win-win situation. You need to negotiate on the terms to enjoy more profits. However, during the negotiation process, you need to consider several aspects.
a. Set realistic expectations.
b. Second, you as an investor should get a good amount of up-front cash along with high royalty.
c. Thirdly, you need to get an annual minimum payment as much as possible.
d. The last factor is the exclusivity. The majority of the manufacturers would like to retain exclusive rights for global distribution. It is, however, open to negotiation.
When trying to sell your idea to companies, do not rush. You need to find out a company that meets your long and short-term needs. Taking the right approach can be quite rewarding!