You've got the brains, but you need a product with brawn. Try pairing an inventor's idea with your biz know-how.
The entrepreneur: Shawn Donegan, 46, founder of Trac Tool Inc. inCleveland
Product description: The Speed Rollers paint applicatorsystem targets professional painting contractors. Featuring tworollers, the system is fed by an airless paint pump that dispensespaint onto the top roller. Because the applicator system eliminatesthe need to dip into a roller pan and also minimizes the so-called"back roll," it's four to five times faster than atraditional roller system. While Donegan didn't invent SpeedRollers, he was able to launch his company after signing alicensing deal with Mike Puczkowski, the product's inventor.The Speed Rollers system retails for $349 and is sold through majorpaint retailers such as Sherwin-Williams.
Startup: About $150,000, which was spent to launch theproduct at the Painting and Decorating Contractors of America tradeshow in 2004. Costs included marketing materials, booth rental,product development, patents and 10 laser-cut prototypes.
Sales: $3 million projected for 2005
The challenge: How does an entrepreneur who knows aninventor with a great idea decide whether or not the product isworth pursuing?
Inventors are often great at creating innovative products, butthey're often lousy at turning their inventions intobusinesses. Not surprisingly, inventors represent a big opportunityfor entrepreneurs. Taking an inventor's product tomarket--which is what Shawn Donegan did with the Speed Rollerssystem--can mean big profits for those willing to carefullyresearch a product's viability before spending too muchmoney.
Steps to Success
1. Recognize a good idea. Donegan had been involved inmanaging commercial properties and painting contractors for severalyears. "I knew that painting contractors were four to fivetimes faster with spray paint than they were with rollers," hesays. "But on many jobs, the effort to cover up other surfaceswas so substantial, it was just as fast to use rollers. So I wasblown away with [Puczkowski's] invention--it was as fast as orfaster than spray painting, didn't require substantial effortto protect other areas, and eliminated spray painting's loss of20 to 30 percent of the paint."
2. Research the sales potential. Donegan had Puczkowskibuild several models until he had a rough prototype that workedwell. He then got feedback. Says Donegan, "Mike and I took theprototype and ran focus groups with painting contractors, industryexperts and property management firms. Everyone gave us positivereinforcement and saw the same potential for the product that wedid." Donegan was still careful, though, and he treated thefirst trade show in 2004 as a market research experience: "Wedidn't want to invest heavily in tooling and production beforethe show."
3. Explore any potential snags. The product attaches to ahose from an airless spraying system. Before proceeding with anintroduction, Donegan had to be sure the Speed Rollers could attachto the current airless systems on the market. "I recognizedone immediate problem in the prototype: The ball valve thatreleased paint to the roller could only handle a fraction of thepressure that airless systems typically deliver," he says."Also, we needed to redesign the product for smoother couplingwithout any leaks. Once we redesigned the components, we testedthem thoroughly. We wanted to ensure worker safety and productquality before proceeding."
4. Make a deal with the inventor. Says Donegan,"Once I was satisfied the product could be a success, I agreedto a royalty agreement with Puczkowski." In June, Doneganpurchased all rights to the product from Puczkowski for a lumpsum.
5. Launch a sales plan. "Interest in the product wasso great, I knew I couldn't afford to supply the world atonce," says Donegan. "So I decided to focus my salesefforts on the Ohio area so we could build up the product and afinancial base that would become self-sustaining. I've workedhard to match my sales efforts with my operating capital. I'mstill doing $3 million in sales in my limited geographic andindustry markets. I expect to expand to select markets globally inthe next six months."
1. Know your market. The key to selling a new idea is tounderstand the end user and the market. That way, you know if theproduct's benefits will be important to the end user.
2. Look for a well-tested idea. Many inventors haveproducts they have used for an extended period of time. Usually,those ideas can successfully be produced. Products that are stillin the drawing phase, however, need to go through severalprototypes, which could be expensive, before a salable design isready.
3. Understand the product's distribution. Figure outhow you will sell the product--for example, you might sell toretailers through manufacturers' sales agents. Talk to thepeople who will be distributing the product to make sure they alsofeel the product has potential.
4. Remember that quality counts when selling to thetrade. "Trade" is a term used for selling toprofessionals. Tools sold to the trade typically impact yourcustomers' ability to earn money, so the trade almost alwaysbuys the highest-quality products.
Born in the USA
This fall, the USA Network will air Made in the USA, a TVshow featuring inventors, their products and how their productswere developed. In March, the USA Network, along with the HomeShopping Network, visited four cities to find inventions and alsoaccepted mail and online submissions. Nearly 1,000 new productswere submitted. If the shows are successful, USA will continue torun the series. Air dates can be found at www.usanetwork.com;click the "Series" button, and then click on"Made in the USA."
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