Mistake #4: Sending your idea--and your money--to an Invention Promotion Company
Companies like these prey on hopeful inventors. You'll see them advertising on late-night TV, the radio, in newspapers and magazines, or via the internet. Their tactics are clear and their process is pretty consistent. First, they hook inventors by telling them what they want to hear: essentially, that they have a million-dollar idea, and that they'd love to take it to market. Of course, it's a perfect scheme, because inventors already believe this about their product and are relieved to finally meet someone who sees the brilliance of their idea!
These companies then request a relatively small sum of money ($500 to $2000) to conduct a patent search and marketing study. Within a few days they'll send back a long, bound and professional looking report that demonstrates the obvious market need for this item and its tremendous financial promise. They'll simply need one more payment, they claim, to make the dream come true. Although they'll typically accept any amount they can get, this payment is usually in the neighborhood of $5,000-15,000. (I've heard of people who have paid as much as $30,000.) But once you mail your check, you'll seldom hear from the company again, no matter how reputable they seemed to appear. In the last four years I have heard from hundreds of inventors who've been burned by these companies. In fact, I just received a letter from a woman yesterday who gave her entire savings of $8,000 to a company like this--and after two years, absolutely no progress was made.
Be very suspicious of any pay upfront "deals." While there are a very few legitimate companies that can help you, the legitimate ones don't advertise and won't seek money upfront. If you do decide to take this route, be extremely careful, be sure you're getting real references (these companies have been known to offer fake ones), and get everything in writing. And have a USPTO registered patent attorney review their contract before handing over a dime.
Mistake #5: Sinking all your money into a patent
While a patent can be a valuable tool, it may be unnecessary to creating a viable product or business. And it should rarely be your first step in the invention process. Before you pay to get a patent (on average $5,000-$10,000), you should discern whether your idea is marketable. Will people want it? Is it financially feasible? Many thousands of patents exist for items that no one will ever set their eyes on. In fact, only 2 to 3 percent of all patented items ever make it to the marketplace!
On the flip side, many products on the market don't have patents. As long as you're sure your product doesn't infringe on someone else's patent rights, you can bring your product to market without one. Of course, you lose the protection a patent offers, but this protection is often over-rated and if it's an obstacle to your progress (the cost will cause you to drop your idea), it is possible to go without it, especially at first. I recommend speaking to a registered patent attorney or patent agent to determine how broad a patent you can potentially get, and to help determine the business value it brings to your project.
Mistake #6: Lacking business acumen
Many inventors believe that the success of their product begins and ends with "the big idea." In reality, the "idea" is a small component of the overall process. The most successful inventors I have met actually have many ideas, and only act on the ones that are the most viable and offer the path of least resistance to market. It takes a great deal of sweat equity to turn an idea into a financial success. If you are planning to license your idea, understand that it will take more than a verbal description to convince an individual or company to buy into your product. You still need to make a compelling argument--with market research data, a prototype, and a proposal to back it up.
And if you're planning on launching your own company to support your idea, the invention is only the first of many, many steps. Running a business is an enormous undertaking--you'll need to manage manufacturing, sales, publicity, employees, financials and so much more to make your product a success.
Believing that a winning idea alone will make you a million dollars is unrealistic. So be prepared to put in many hours and much hard work, no matter what route you decide to go. And don't forget to allow yourself the freedom to be creative and have fun throughout this adventure! Nothing is more gratifying than to see your product selling off store shelves.
Tamara Monosoff is the author of Your Million Dollar Dream: Regain Control & Be Your Own Boss and The Mom Inventors Handbook, Secrets of Millionaire Moms, and co-author of The One Page Business Plan for Women in Business. She is also the and CEO of www.MomInvented.com. Connect on Twitter: @mominventors and on Facebook: facebook.com/MomInvented.