Finding a Company to Manufacture Your Product

When Chris Haas was in elementary school gym class, this Murrieta, California, kid noticed that many of his basketball teammates were holding the ball incorrectly and, as a result, not shooting very well. So he did what any other nine-year-old would: He stuck his hands in poster paint and put them on a ball in the correct position. Playing with that ball, his friends got better at making baskets. His teachers encouraged him to patent his invention.

Surprisingly, his design didn't win his school's invention fair that year. But his Hands-On Basketball eventually brought in as much as $50,000 a year in revenue, so he hasn't held a grudge.

Haas's invention did win the attention of Sportime Inc., an Atlanta manufacturer, however, and Hands-On Basketball was soon available internationally. The junior-sized teaching aid, available in left- and right-handed versions, started being carried by K-Mart, other retail locations and in catalogs. Other products, including a Hands-On Football, soon followed.

New Challenges
Once the Hands-On Basketball became a success, Haas was invited to appear at several sports-themed All-Star Cafes in New York City, Las Vegas, and Florida to promote his invention. But being a celebrity was just one of the challenges Haas faced after selling his invention to Sportime. Making this big sale was a huge step--in fact, it was one of the most difficult steps involved in launching his business.

Finding Manufacturers
Once Haas, who is now 18, decided to take his invention to the public, he and his father worked with a marketing manager to develop a list of manufacturers to approach. On your own, however, there are ways to find companies that might be interested in your new product or invention:

Once you've narrowed potential manufacturers to a list of a dozen or more, put together a package to send them. Remember the adage, "You never get a second chance to make a first impression." In other words, be neat and professional.

Include the following in this package:

• A typewritten cover letter briefly describing your product or invention, why the company would be interested in it, and how they can contact you
• An information page about your product
• Photographs of the model

If available, also include:

• A public opinion survey
• Endorsements from a well-respected source
• Marketing information

Once your packages are mailed, expect to have to wait several weeks or even months before you receive responses--some may not respond at all. Sending a self-addressed, stamped envelope may help ensure a response, especially if you expect the company to mail your entire package back. If you fail to receive a response after a month, follow up with a polite letter inquiring about your submission.

Dealing with Rejection
All creative endeavors involve some amount of rejection. Learning to deal with disappointment is an important business skill.

• Don't expect an instant hit. "We sent letters to a bunch of companies," says Haas. "Twelve out of 13 rejected the idea. Sportime liked it." (Remember, it only takes one!)
• Consider rejection a challenge. Persistence is critical to success. Keep approaching companies until one says "yes."
• If you're handed a lemon, make lemonade. Study the comments in rejection letters to see what you can learn. Make improvements and re-submit the proposal.

When a company does accept your product for manufacture, there are two ways you may be paid:

• The company may offer royalties. A royalty is a percentage of the sales from a product. "On the basketball, I received five percent royalties from catalog sales, and two and a half percent from K-Mart sales," says Haas.
• The company may offer a flat fee. A flat fee is a one-time, lump sum payment for your invention. These offers can be inviting. However, if your product is a big seller, royalties can surpass the flat fee very quickly. Most inventors believe their product will be a smashing success and opt for royalties that come in year after year.