So what can you learn from Lawson's entrepreneurial
1. Do some thorough research to be sure you understand the product. A good start is to subscribe to your industry's trade magazine, which targets the industry's retailers, distributors and manufacturers. As you read each issue, you'll learn about relevant trade groups and trade shows. To find the appropriate trade magazine, try Gale's Directory of Magazines and Broadcast Media (Gale Publishing), available at most major libraries.
In addition, try talking to five or 10 potential customers--they will be able to point out all the strengths and weaknesses of your product.
2. Make sure the inventor is willing to release control of the product. Inventors will often want to stay involved in the process of bringing their product to market--after all, to them, it's their "baby."
But sometimes inventors can get in the way, unwilling to make or allow changes the product needs to succeed. Also, inventors often have expectations far too high for what anyone could be expected to do with the product.
3. Determine a fair price for the inventor's product. Sometimes, inventors will want a substantial sum for their product, and you'll have to negotiate a fair price. Knowing the true value of a product is important because inventors often base their price at least in part on how much they have invested. That value may not be anywhere close to what the product is actually worth, especially if the inventor has spent too much on his or her invention.
So before agreeing on a price, be sure to investigate how the business should be valued. Helpful resources include your local SBDC, Valuing a Small Business and Professional Practice, Fourth Edition by Shannon P. Pratt, and Web sites such as www.bulletproofbizplans.com and www.bvresources.com.
4. If the inventor's price is more than you can afford, consider licensing. Instead of purchasing an idea outright, you can license it, which means that you pay a percentage of your sales to the inventor in addition to any upfront fee.
To learn more about this option, check out the Licensing Executives Society International Inc.. This organization publishes some of the best titles on licensing, including Basics of Licensing. Also, be sure to check out the Licensing Industry Merchandisers' Association.
5. Don't expect miracles right away. Entrepreneurs often try to keep their prices low in hopes of getting a big customer, but that might not happen for several years. Instead, you should price the product so you can at least break even on your sales to a smaller market.
|About.com has a Web page devoted to new inventors and those with limited experience. Comprehensive and easy to use, the site examines such topics as famous inventors, inventing basics, invention funding and marketing ideas. The site gives a broad overview aimed at helping visitors strengthen their understanding of the invention process. Also included is an "Ask the Expert" page, where you can post your most pressing questions. Don't forget to take a look at the e-booklet A Practical Guide to Licensing, a particularly useful resource.|
Don Debelak is a new-business marketing consultant and author of Think Big: Make Millions From Your Ideas. Send him your questions at firstname.lastname@example.org.