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There are many steps required to have an invention put out on the market. An inventor can either choose to sell his or her invention, as soon as it is patented, or choose to retain ownership of the invention. If an inventor wants to take entrepreneurship to the next level, he or she should license the invention and make plans to produce the invention and make strategies for optimizing profits.
Before taking steps to marketing an invention, an inventor should come up with a marketing plan. The initial steps taken in this process are mentioned in Chapter 2 under the section Inventions Worth Patenting by testing an invention in a market research plan. Strategies dealing with consumer needs and wants can be construed from this research plan to develop a target market. This research plan can also give an inventor an idea on the competition. Later on, manufacturing costs, expected sales, and other budgetary concerns should be analyzed carefully. The inventor should also take the geographic location into consideration. For example, it would be much wiser to license a new microchip design to companies in Silicon Valley, California rather than trying to license it to the few computer design companies in Wyoming. The demand would be much greater in California with the numerous, huge, and reputable computer corporations that thrive there. Successful corporations have many marketing plans of their own to help make the invention a success, including advertising and promotions, which could turn up huge royalty profits for patent owners. An inventor should also never forget that the market evolves and so do other companies' products. If starting a business, an inventor should research ideas for new products and upgrade the current product to continue to provide the needs of the target market.
The first step in the actual process of marketing an invention is commercializing the patent. An inventor can choose to sell the invention's patent and receive a flat payment for only the patent with no royalties from the earnings the product would have made in the future. A more advisable option when selling a patent to a manufacturer is to first license the patent. This allows an inventor to have full ownership over the patent while allowing others to manufacture the invention. A field-of-use license allows others to manufacture and sell the invention, but the invention must be used for different purposes. Because the inventor still has ownership of the patent when licensing, other companies who choose to manufacture, use, or sell the product will have to pay royalties to the inventor. An entrepreneur may license his or her invention, but only give his or herself exclusive rights. An entrepreneur will also have to take up responsibilities on how to obtain funding and planning a budget for the invention to be manufactured and sold. Entrepreneurship can have the greatest potential out of these three options because a successful invention can accumulate a great profit for the inventor if he or she chooses to be the sole proprietor or have a minimal amount of business partners. Many inventors, however, choose the option of licensing to create profits from royalties without taking the responsibilities and high risks that come with entrepreneurship.
If an inventor wants to license an invention with other parties, he or she should do research using directories and guides to locate companies who manufacture similar products or who may be willing to manufacture the invention. Chambers of Commerce, banks, and developers can help an inventor find companies that may be interested in the product. An inventor can also contact the USPTO to advertise the product for licensing and sale. It is advisable to get a good advisor or legal when marketing a product. Research should be done before getting someone like an invention marketing company because many invention marketers can be frauds or poor performers at the task at hand. All registered invention marketers are listed under the Better Business Bureau, but it is up to the inventor to determine if the marketer is reputable and qualified.
After finding companies who are interested in the product, an inventor should present a professionally done plan on how this product will benefit them. Creating a business plan should start as soon as an inventor files for a patent. It may take years before the patent is finally granted or rejected, so it is best to get started right away before the invention becomes obsolete towards a market it could have been successful in while the patent was pending. When presenting a product to another company, an inventor should have a business plan that summarizes the details of a patented product, displays marketing strategies that were described earlier in this chapter, manufacturing details, projected sales on the target market, distribution methods, personnel required to manage the production of the invention, all other budgetary considerations and expenses, and projected profits. This will greatly increase the chances of impressing companies enough to license the product with the inventor.
After licensing the invention, an inventor must raise capital from it. An inventor should always research and develop strategies that might boost sales and sometimes searching for help in funding can be a better option. One choice in helping to raise capital is a joint venture. In a joint venture, individuals, groups, and firms help finance an inventor's company while the inventor provides the product and any other assistance in his or her partners might need. These partners in the joint venture program do not charge any fee, but they do expect to see a certain percentage of profits later on. The next option to earn funds is by venture capital. Individual investors, banks and financial investment agents can help you get started with venture capital funds. Always make sure to research the people who choose to invest on the company. Many inventors choose to go through government agencies locally, statewide, or federally, to take out business loans. The Small Business Administration is known to be a huge source of venture capital for new businesses, and has proven to be a trustworthy and reliable business partner to many.
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patentdatabase.com www.stevens.edu/ecalendar
Conferences, Seminars, Information Sessions and more... Online Business Tutorial
Market Statistics and Research
Researching the Market
Understanding the Marketplace
Building a Marketing Plan
Raising Money About.com - How to license your invention Search Thomas Register - comprehensive online resource for finding companies and products manufactured in North America where you can, Place orders online, View and download millions of Computer Aided Design (CAD) drawings and View thousands of online company catalogs and websites.
Hoovers, the business information authority -Hoover's covers more than 300 industries broken into 28 sectors.
Industry Search - linking industrial buyers with suppliers
Search AT&T's business directory US Small Business Administration
New Markets Venture Capital Program
Federal Grant Resources
National Venture Capital Association
National Association of Seed and Venture Funds
New Jersey Entrepreneurial Network, 609-279-0010. This group of inventors and investors meets the first Wednesday of each month at the Sarnoff Center.
Venture Association of New Jersey, 201-631-5680. Third Tuesday at the Governor Morris Hotel in Morristown.
National Society of Inventors, Box 434, Cranford 07016. 201-994-9282. Non-profit organization promoting the entrepreneurship of ideas and patents.
American Society of Inventors, Box 58426, Philadelphia 19102. 215-546-6601. Non-profit volunteer organization that supports inventors with a newsletter, an inventor's notebook, invention evaluation, and information.
Wal-Mart Innovation Network, Box 184, Everton, MO 65646. 417-836-5667. For $150, this branch of the Walton empire will evaluate the potential of your consumer product invention and send you a report in four to six weeks.
Inventors Assistance League, 345 West Cypress Street, Glendale CA 91204. 800-484-1077. Offers an information package for inventors, including audio cassette and booklet with information on patenting, licensing, and marketing, for $10. |
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