Reinventing the Inventor
Being a successful inventor doesn't stop at thinking up your big idea--you need to learn to be a smart businessperson, too.
While creativity's essential to developing inventive ideas, those who wish to turn inventing into more than just a hobby must shift their mind-sets. That's because the role of serious inventor isn't limited to simply creating the newest gadget or gizmo.
It's easy to understand why many inventors feel that once the patent is filed, their product design is complete and their invention goes into production, they're almost home free in terms of getting their product to market. After all, it's taken a lot of time and effort to reach this point. In reality, though, the final element--sales--still weighs heavily on the invention's success and shouldn't be underestimated. To be successful, inventors have to look at their inventions as marketable products and have a clear sales strategy.
To launch a successful product, it's critical to approach the process from a business perspective. Fortunately, that doesn't mean you need an MBA or even specific experience in the business world. It simply means being as smart about running a business as you were about developing your idea. You already have an inventive mind and a creative spirit. You simply need to transfer those qualities to managing the business end of things.
To help you out, here are some tips to help you avoid some of the more common mistakes inventors make when managing a business:
1. Hang onto your cash, and research your product's marketability. I can't tell you how often I've talked with inventors who've spent thousands of dollars--in some cases, their life savings--on developing products that already exist or, even worse, products people just won't buy. Remember, to sell your product, there needs to be demand. How can you know this for sure? Do your research before investing too much time and money in your project. A quick online search can turn up similar or competing ideas and can inform you whether the competition's selling.
If you move forward in developing your idea, maintain an open dialogue with your target market so you know what's working and what isn't. Initially talk to friends and family members, but move on to ask for unbiased feedback from more objective, informal groups. You could host a gathering at your house and invite friends of friends. Or conduct informal surveys by speaking to people at your grocery store, park, place of worship, kids' soccer tournaments, etc. These are informal examples that can be a fantastic way to gather essential data while staying within a tight budget. If you do have extra capital, however, you can also hire a marketing company to assist you. Just do whatever it takes to ensure there's a need for your product idea.
You should also develop a sales plan. In other words, know which distribution channels you intend to use (direct sales, catalogs, online, retail stores, etc.) and/or which stores you expect to carry your product. View the feedback you get from industry professionals (store owners, buyers and managers) in this early stage as a gift. If you incorporate their feedback into your product and packaging design early on, you may save thousands of dollars in the long run.
2. Understand the value of a patent. Many inventors rush to file for patents before doing anything else. While a patent can be a valuable tool to protect your product, it's not a requirement and isn't necessarily the first step you should take. Be sure to closely evaluate whether you actually need a patent right away or if your money might be better spent on developing and manufacturing your product and getting a leg up on potential competitors in your marketplace. For more information, read " To Patent or Not to Patent? "
3. Use smart business practices. Every day, you make purchases, decisions about investments and insurance, and pursue many other activities that keep your household running. Use the same common-sense perspective when creating a business to support your product. This means shopping around for the right manufacturer, presenting yourself professionally when selling your product to potential retailers or distributors (whether in writing or in person), and keeping a close eye on your financials. A basic understanding of profit margins and markups is essential, and tracking every dollar of your income and expenses is critical. For more on managing your business's finances, read " Demystifying Profit Margins and Markups ."
4. Get the word out. If you create it, they will not necessarily come. That's because the general public doesn't know about it. And with retailers controlling shelf space--where your product must compete with the store's own branded products--they're reluctant to give up that space unless there's strong evidence of consumer demand. You need to create awareness about your product so consumers will seek it out and buy it. That requires some marketing savvy.
Thankfully, there are many ways to get the word out that won't require a huge advertising budget. E-mail blasts, PR and word-of-mouth are just a few low-cost ideas. Also, plan on attending relevant trade shows to present your product to potential retailers, sales reps and distributors.
5. Educate yourself. A good businessperson never stops learning. Even if you don't have a business background, there are many resources available that'll help you teach yourself smart business practices. Do your research, read relevant business books, and keep up with business-related publications. You'll be amazed at how much you'll learn about all aspects of running a business--from product development to finances to marketing to sales and so much more.
6. Consider licensing. If you love to develop products but don't want to deal with running your own business, licensing your idea may be the route to take. But recognize that you'll still need to take a business-wise approach. Companies won't be beating down your door to license your invention. This'll take effort on your part, including the development of a working or presentation prototype, research about potential licensors, and creation of market data and a professional presentation. This way, you'll be taken more seriously by potential business partners.
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.