Hoop Dreams

The Manufacturing And Protecting Challenges

Parr has considered making and selling the product himself, but the costs are prohibitive, with both liability insurance and major marketing efforts being paramount. The easiest thing Parr could do would be to get a manufacturer for his product, which he would then sell for a commission. But finding a manufacturer has proved difficult: Parr has talked to the big three hoop manufacturers-Huffy, Lifetime and Porter-and at this point, they don't yet see the benefit of Parr's Pickup Hoops. What can he do?

For starters, Parr should collect as many orders as possible before he even approaches manufacturers. Once he's got at least 50 orders, he can improve his position even more if he gets a 10 to 25 percent down payment on each order. Manufacturers will be more likely to work with Parr if they see a need (and financial backing) for his product.

From there, things ought to fall into place: If a manufacturer makes Parr's product, he will be covered under their product liability policy. And because the insurance company is already on the hook in case of an injury, it will give Parr a rider (usually costing less than $500), which also protects him in case of a potentially damaging claim.

Alternately, Parr could also set up a joint venture agreement, where part of the manufacturer's responsibilities would include providing limited liability insurance.

The key here is choosing the right manufacturer. In Parr's case, hitch manufacturers or manufacturers of other transportation-related items are the perfect fit, as they already pay a high liability rate for transportation-related products.

I've found time and again that the most remarkable characteristic of successful inventors is their ability to face long odds and numerous obstacles and still come out on top. Parr's situation is a good example of the frustrations inventors inevitably face, but he also has the determination that won't allow him to fail. He continues to promote his product in the Detroit metropolitan area, and he is still hopeful he'll land a major deal with a pickup truck manufacturer. He's going to keep knocking on doors until he finds the one that opens to the path to success. The secret, as always, is to cut down the number of doors you have to open. You can do that by getting all the expert advice you can. Don't stop trying; just try smarter, and you may succeed a lot sooner than you expect.

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the January 2001 print edition of Entrepreneur with the headline: Hoop Dreams.

Loading the player ...

Tim Ferriss on Mastering Any Skill

Ads by Google

Share Your Thoughts

Connect with Entrepreneur

Most Shared Stories