If you've got a great idea for a product or service but don't have the means or the will to sell it yourself, fear not. You have the option of licensing your product, service or idea to another company instead. Stephen Key inventor, licensing expert and author of the book "One Simple Idea" shared some tips for licensing products and services in a phone interview with Small Business Trends. Check out the top tips below.
Tips for Licensing Your Product or Service
Consider the Amount of Work You Want to Do
According to Key, the main benefit of licensing your product or service rather than just selling it yourself is the amount of work involved. With licensing, you can sign your idea over to another company and let them do all the work. But you have less control. So before making your decision, you need to really think about what is more important to you.
Research Other Patents
So you've got an idea and you want to license it? Great. But before licensing your product or service, you first need to research your idea to make sure that it's not already patented by someone else. To do this, you really just need to Google your idea.
Find a Small Improvement
Even if you find some similar items out there, that doesn't necessarily mean you're out of luck. You can still be competitive in the marketplace if you just have an idea that's slightly different than others out there.
Key says, "You don't need to reinvent the wheel. You just need a good idea that gives people a small improvement over an existing idea."
Don't File Too Early
Key says that one of the biggest mistakes he sees people make is filing for patent protection too early in the process. In fact, though he holds many patents, he said that they're not absolutely necessary depending on the type of idea you have. And if you're still working on developing and testing your idea, you might find that you want to make changes that don't fall within your original patent. So filing more than once can be very expensive.
Consider a Provisional Patent
In some cases when licensing your product or service, Key recommends looking into a provisional patent application. It can give you a little bit of room to make changes and really flesh out your idea before filing an official patent application.
Be Your Own Expert
The process of patenting and licensing can be complicated, so it can be necessary to enlist the help of an attorney. But Key cautions against fully relying on someone else for this process. Before getting into the process of licensing, you need to really decide what it is you want, what you think you can get, and research all of the different factors that go into the licensing process.
Find Your Market
Key also thinks it's a good idea to find out if your product or service will actually sell before paying for an official patent. You can pitch the idea to companies early and see what kind of reception you get. If no one is interested, you can save yourself the time and money of patenting your idea.
Create an Ad
To really market your idea to companies, Key suggests simply creating a one-sheet advertisement that gives the basic information about your idea. You can hire a freelancer to create an image of your prototype and then offer all of the basic information.
Use Multimedia
You can also create a video ad to send to companies so that you can gauge their reception of your product or service.
Reach Out to Multiple Companies
Another big mistake that Key says he sees people make all the time is giving up on their idea too quickly. Reaching out to one or two major retailers with your idea isn't enough. If a few people say no, that doesn't mean it's hopeless. So before you even start, create a long list of companies that you can reach out to. And try not to get discouraged early on.
Keep It Specific to Your Niche
When deciding on companies to pitch, it helps to think about where you'd expect to find a product like yours if you were out shopping. The more specific you can get, the bigger your chances of gaining some interest in your offering.
Find the Right Contacts
You also need to research who within the company would be best to contact with your idea. Don't just settle for a general contact form unless it states very specifically that that's where the company wants you to send licensing requests. Instead, you can use tools like LinkedIn to find people who work in marketing or similar areas for the companies you've chosen.
Ask About Their Process
When you first make contact with those people, you don't need to rush into pitching your idea. In fact, it can be more beneficial for you to start a conversation with them first. Tell them that you love their company and then mention that you have an idea you may want to license. Ask their process for doing so rather than just sending your idea and getting ignored.
Study the Language
Licensing your product or service can be a complicated game, especially when it comes to all the different terminology. Key says that it's an important step to study the language of licensing when you first start considering it. And then continue to learn about it throughout the process.
Research Constantly
Whether it comes to the language, your target companies, or just fleshing out your idea, the process of licensing your product or service takes a lot of research. And since every entrepreneur's experience is different, there's no one right way to go about it. Whenever you're looking for answers though, you have search engines to help you find them. So don't be afraid to search for even the smallest things to help with your licensing journey.
Key says, "The Internet is the largest library in the world. You can pick any topic and no matter what, you can find something related to it from multiple sources. Even if you're looking for a licensing agreement, you can just type in "licensing agreement checklist" and you can get an idea of what your agreement terms would be and what should go into your agreement."
Licensing Photo via Shutterstock
This article, "15 Steps for Licensing Your Product or Service to Another Company" was first published on Small Business Trends
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