The entrepreneur: Shawn Donegan, 46, founder of Trac Tool Inc. in
Cleveland
Product description: The Speed Rollers paint applicator
system targets professional painting contractors. Featuring two
rollers, the system is fed by an airless paint pump that dispenses
paint onto the top roller. Because the applicator system eliminates
the need to dip into a roller pan and also minimizes the so-called
"back roll," it's four to five times faster than a
traditional roller system. While Donegan didn't invent Speed
Rollers, he was able to launch his company after signing a
licensing deal with Mike Puczkowski, the product's inventor.
The Speed Rollers system retails for $349 and is sold through major
paint retailers such as Sherwin-Williams.
Startup: About $150,000, which was spent to launch the
product at the Painting and Decorating Contractors of America trade
show in 2004. Costs included marketing materials, booth rental,
product development, patents and 10 laser-cut prototypes.
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Sales: $3 million projected for 2005
The challenge: How does an entrepreneur who knows an
inventor with a great idea decide whether or not the product is
worth pursuing?
Inventors are often great at creating innovative products, but
they're often lousy at turning their inventions into
businesses. Not surprisingly, inventors represent a big opportunity
for entrepreneurs. Taking an inventor's product to
market--which is what Shawn Donegan did with the Speed Rollers
system--can mean big profits for those willing to carefully
research a product's viability before spending too much
money.
Steps to Success
1. Recognize a good idea. Donegan had been involved in
managing commercial properties and painting contractors for several
years. "I knew that painting contractors were four to five
times faster with spray paint than they were with rollers," he
says. "But on many jobs, the effort to cover up other surfaces
was so substantial, it was just as fast to use rollers. So I was
blown away with [Puczkowski's] invention--it was as fast as or
faster than spray painting, didn't require substantial effort
to protect other areas, and eliminated spray painting's loss of
20 to 30 percent of the paint."
2. Research the sales potential. Donegan had Puczkowski
build several models until he had a rough prototype that worked
well. He then got feedback. Says Donegan, "Mike and I took the
prototype and ran focus groups with painting contractors, industry
experts and property management firms. Everyone gave us positive
reinforcement and saw the same potential for the product that we
did." Donegan was still careful, though, and he treated the
first trade show in 2004 as a market research experience: "We
didn't want to invest heavily in tooling and production before
the show."
3. Explore any potential snags. The product attaches to a
hose from an airless spraying system. Before proceeding with an
introduction, Donegan had to be sure the Speed Rollers could attach
to the current airless systems on the market. "I recognized
one immediate problem in the prototype: The ball valve that
released paint to the roller could only handle a fraction of the
pressure that airless systems typically deliver," he says.
"Also, we needed to redesign the product for smoother coupling
without any leaks. Once we redesigned the components, we tested
them thoroughly. We wanted to ensure worker safety and product
quality before proceeding."
4. Make a deal with the inventor. Says Donegan,
"Once I was satisfied the product could be a success, I agreed
to a royalty agreement with Puczkowski." In June, Donegan
purchased all rights to the product from Puczkowski for a lump
sum.
5. Launch a sales plan. "Interest in the product was
so great, I knew I couldn't afford to supply the world at
once," says Donegan. "So I decided to focus my sales
efforts on the Ohio area so we could build up the product and a
financial base that would become self-sustaining. I've worked
hard to match my sales efforts with my operating capital. I'm
still doing $3 million in sales in my limited geographic and
industry markets. I expect to expand to select markets globally in
the next six months."
Lessons Learned
1. Know your market. The key to selling a new idea is to
understand the end user and the market. That way, you know if the
product's benefits will be important to the end user.
2. Look for a well-tested idea. Many inventors have
products they have used for an extended period of time. Usually,
those ideas can successfully be produced. Products that are still
in the drawing phase, however, need to go through several
prototypes, which could be expensive, before a salable design is
ready.
3. Understand the product's distribution. Figure out
how you will sell the product--for example, you might sell to
retailers through manufacturers' sales agents. Talk to the
people who will be distributing the product to make sure they also
feel the product has potential.
4. Remember that quality counts when selling to the
trade. "Trade" is a term used for selling to
professionals. Tools sold to the trade typically impact your
customers' ability to earn money, so the trade almost always
buys the highest-quality products.
Born in the USA
This fall, the USA Network will air Made in the USA, a TV
show featuring inventors, their products and how their products
were developed. In March, the USA Network, along with the Home
Shopping Network, visited four cities to find inventions and also
accepted mail and online submissions. Nearly 1,000 new products
were submitted. If the shows are successful, USA will continue to
run the series. Air dates can be found at www.usanetwork.com;
click the "Series" button, and then click on
"Made in the USA."
Don Debelak is author of Entrepreneur magazine's
Start-Up Guide #1813, Bringing Your Product to Market, and host of
inventor-help website www.dondebelak.com.