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Q: My partner and I have an idea we've perfected, and we'd like to go into business with it. What's the best way to begin?
A: First of all, your use of the term "partner" tells me you haven't selected your legal form of business. To avoid many future misunderstandings between the two of you, I'd suggest getting together with a business attorney to decide whether you should form a partnership or, as is more common with manufacturing companies, a corporation.
Ideas are a dime-a-dozen, as they say. Hopefully, "perfected" means you've developed a good, working prototype of your idea. Forget the old tale: "Peter Piper picked a peck of pickled peppers," and begin your process by learning a new jingle: the Five Ps:
You're considering investing valuable time and money into your project, so you won't want another company copying your products and competing against you.
Patents and trademarks can be used to carve out a competitive market position. Meet with a patent attorney to determine whether your idea is already patented or if your trademark is already in use by someone else. If it is, think hard about how important a patent or trademark is to your business' success.
You've told me you have a perfected idea, but will it sell? Don't just assume so; prove it!
Prove marketability by researching every company that makes similar products (competitors), analyzing the profile of customers who might buy the product (demographics), and charting margins, shipping methods and practices of the stores that would sell the product (distribution channels).
Not only will this exercise identify the state of the market, it will lay the groundwork for how you'll need to introduce and sell your product.
You'll either have to manufacture or assemble the product yourself, or subcontract all or part of the manufacturing of the product to your specifications. Short-run manufacturers will be able to help you answer production questions.
Once you prove the marketability and have a product to sell, you need to roll out promotional and sales programs. During the "prove" phase, you outlined the competitors and distribution channels for similar products in your industry. Now it's time to put your findings and marketing/sales strategies to work.
By following your new marketing plan, you'll have a good chance of getting your product through the right distribution channels you chose, and onto store shelves.
If you follow a solid plan and get your product into stores, you've passed the first stage of business success. If the stores reorder, you're on your way to long-term success. Only good customer service, competitive pricing, high product quality and functional design can assure customer acceptance and profits.
So remember the Five Ps, follow a plan, and you and your partner could very well go down in the history books as one of the 5 percent of inventors who become successes. Good luck.
For more information, visit http://www.inventorfraud.com/approach.htm.
Andy Gibbs is president and CEO of venture-backed PatentCafe.com Inc., an Internet vertical content portal featuring intellectual property resources for inventors, entrepreneurs and small businesses.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.
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