Have an Idea? Now What?
Having an idea is just the beginning of your journey. Knowing the steps to take and finding the right people to help you get there can be challenging and intimidating. Many new inventors start paying for services and help too soon. That’s why we created this beginner’s roadmap to help guide you when you have that idea and do not know what to do next.
Don’t Get Scammed Or Ripped-off
This first section is a quick guide to help you not get scammed or misled by invention service companies, coaches, or independent consultants. Unfortunately, many new inventors and creators fall victim to companies that charge upfront fees. Thousands of inventors are scammed and fraudulently deceived yearly. Use this information to protect you, your family, and your money.
Invention Company Predators
Companies spend millions of dollars to lure you in and deceive you to believing licensing a product is as easy as 1-2-3. They use the best technology in advertisements and in licensing deal announcements. But they never share their actual success rates and numbers in writing if you ask. Always a verbal answer or they say their success is 15 times greater than their competitors. If they don’t pay for ads, they use theor social media platforms to deceive you with licensing deals, most of which don’t make the inventors back more money than they paid for in services. DON’T FALL FOR IT. BE SMARTER AND ASK THE RIGHT QUESTIONS IN WRITING AND ASK FOR ANSWERS BACK IN WRITING.
2% Of Issued Patents Make Money
According to the USPTO, only 2% of all issued patents make money. So do the proper market research to first prove your idea is needed by at least thousands of people and that it can be made for an affordable price.
Be on alert for the following warning signs of a potentially bad company looking to trick you with a fancy website and deceiving marketing.
1- Mention of helping lots of inventors.
2- They have relationships with big-box retailers.
3- Colorful logos of big retailers like Bed Bath and Beyond, Home Depot & others.
4- Customer testimonials praising the company, and never their full name. Unfortunately, many companies use paid-for and fake testimonials.
5- Their employee or team photos in group shots appear to be an amazingly diverse group of Hispanics, African-Americans, Asians, Caucasians, men & women both young and old. Usually a stock photo.
6- The photo on their website of their office building is fancy and looks like an expensive corporate-like building. But then you look up the address on google maps and the images of the building are nothing like their website pictures. Might even be a church or school, and not a real business location.
Similar to fancy websites, fancy eye-catching online advertisements, and some even have a national commercial on television. Some of these frauds say publicly they don’t pay for ads, instead, they make weekly to monthly announcements of their student and clients getting their products licensed. But NEVER a follow-up story on that deal to see if the inventor made back more money than they paid the company in services. Why Not? Because most don’t make any money when they go thru a licensing or promotion company according to the USA government.
Just to be clear, a licensing deal doesn’t guarantee any financial income to the inventor. Many inventors don’t know this. You see, these fraud companies don’t educate you with truthful information. These announcements are used to lure you in and deceive you.
Some companies offer weekly to monthly announcements of a licensing deal but never any follow-ups to see if the inventor made any money from the deal. A licensing deal does NOT guarantee the inventor will make any money. Most new inventors aren’t aware of this fact.
Licensing Company List
The bad companies use this tactic and it works. They will say or advertise that they have a secret list of companies looking for ideas to license, but that list is only available to paying students or clients. It’s COMPLETE NONSENSE. DON’T FALL FOR IT.
Long Business History
Some companies have been doing business, ripping-off inventors for over 15 years. Some have been taken to court many times with settlements. Some have only good reviews and no bad online reviews which is a big RED-FLAG. They are licensed to sell services, but that doesn’t mean they are honest. Do your due diligence. Find customers or students that actually had real financial success, meaning they made back more money than they paid the company for services. Most of these companies have paid employees who get commissions and bonuses when you sign up. They tell you what you want to hear but won’t tell you the truth about your chances of success. That’s why you need to do your own market research first. This information we are sharing could save you $5,000+.
Masters Of Sales
Companies tell you everything you want to hear about your product idea. They are masters at making you think you are going to make a lot of money with your idea. They will never be honest and truthful about your real chances for product success with licensing or venturing yourself. Remember, the first few people you talk to are not experienced inventors. They are commission-based employees. Don’t be fooled by their sales script.
License Your Idea
Companies don’t license ideas. If you or someone you know received a licensing deal on just an idea with no intellectual property and no prototype and made money from the deal, please contact us so we can learn more. If you know a company that says they license ideas, please share with us. Otherwise, run away from these companies.
Prey On Your Dreams
These companies will tell you your idea is amazing and there is nothing like it. Their marketing team reviewed your idea and they are very excited to work on this with you. Success is right around the corner but you need to move fast. Never tell them any of your dreams or wishes. BEWARE of such sales tactics.
Must Act Now
They will pressure you into making a decision to move fast without doing any real market research or give you any chance to realize you’re getting misled and being deceived. All they care about is their commission, not you or your idea.
Pressure Tactics To Pay Now
Companies will test you out to see how much they can get from you now that you are so excited. If you’re hesitant to pay a large upfront payment, they will try and lock you into a number with a monthly payment plan, with no interest, but you need to make a decision in the next day or two.
Thousands Of Dollars Up-Front
Because all invention companies know that most products don’t make any money in the end. Same for licensing deals, 99% don’t make any money which is why they charge UP-FRONT and NOT when you make money because your chances of making back your money are around 1%. Let that number sink in, 1% chance.
Invention Licensing Success Rate
The invention licensing success rate of any invention marketing company, licensing company or submission company is less than 2%. If they tell you theirs is higher, ask for it in writing. They will NEVER show their actual success rates in writing. If they do, we love transparency. Bring it to us to validate.
Product Success Rate
96% of all products fail to ever make back a net financial profit.
Inventor Coaching Companies
Don’t hire coaches with no real licensing or product launch success of their own. These coaches are paid employees who get coached themselves weekly and get financial commissions for bringing new students or clients. Their individual student success rates are less than 1% whoever makes a net profit-making back more than they paid the company for coaching services and more.
Better Business Bureau
Don’t trust the BBB rating system. Companies are paying for A+ ratings. Check it out.
Product Licensing is Easy
Anyone that tells you this, is a big RED-FLAG. Licensing is NOT easy as 1-2-3. Some individuals in our industry have sold themselves as licensing experts and have fooled thousands of students and paying clients for decades. Just like Bernie Madoff and many other crooks succeeded for decades until someone blew the whistle. We are blowing the whistle. Run from these frauds.
Free Invention Kit
Some companies will offer you a free inventors kit with information to start earning your trust. Free information is great, but if you decide to pay anyone for services, do your due diligence and properly vet them. The oldest trick when it comes to fooling inexperienced and naive people.
Free Online Videos & Articles
Don’t fall for this trick. Some of the fraudulent companies offer lots of free videos and articles on their website or on youtube. This is a sales tactic to get your attention and persuade you to join their extremely high fee-based program. Watch all the videos if you like and learn what you can, but don’t fall for the old bait-n-switch.
Making Millions Annually
Some founders and executives at the top of the company are making hundreds of thousands to millions of dollars yearly by charging inventors up-front fees, and NOT on the inventor’s product or licensing success. They are living the life of their dreams on our backs with our money, and we are getting little to nothing in return as they promised.
Some companies will give you untrue and inaccurate information about producing and launching a product on your own to push you into their licensing and coaching programs. Some of these bad characters have written books with false and misleading information. Their books are a recruiting tool to lure you into their programs and get your money. They do not care about your success.
Invention service companies get testimonials from non-paying clients or students whereas typically testimonial comes from a happy paying user willing to promote the product or service based on their personal and direct experience. Some testimonials are completely paid for and fake.
Spend Your Money Wisely
In the end, you have the final say on who you will trust with your idea and hard-earned money. We urge you to do your due diligence before paying a dime to any invention company or individual consultant. Visit our alerts page to learn more about other red flags we’ve listed after speaking to hundreds of ripped-off inventors. Trust your gut. If you are not sure, contact us and one of our experienced inventors will help you make the right decision.
Check Out Their Office Address
Using google maps, using the satellite photo tool, check out the building from street level. Some fraud companies don’t expect you to look up their building location. Make sure it’s not a church or any other suspicious type of building where a legal business office would not be located.
5 Questions For Invention Submission Companies
If they don’t answer these questions in writing, go find another company. https://inventorrescue.com/before-you-submit/
Questions For Licensing & Coaching Companies
Ask these questions in writing, and ask for the answers in writing. If the company refuses or is only willing to say verbally, go find another company. This one isn’t honest.
1- How many paying clients or students pay for services in the last 5 years who received no financially successful licensing deals?
2- What is your success rate?
3- In the last 5 years how many students or clients had a net financial profit-making back more money than they paid for in services and/or coaching?
Don't Pay A Dime Until It's Time
We have been in your shoes and made a lot of costly mistakes. The costs can add up quickly. In the following section, market research should be performed by the inventor and no one else. No one will do a better search than you. Before you pay any invention company a dime, you must do your market research to prove the idea doesn’t already exist and it solves a problem for thousands of people. We built this FREE online course to help you invent the correct way by educating yourself first with our guidance instead of paying mediocre companies and coaches who will not share their success rates. We beg you to take this free course and ask for help from us when needed.
COMMON INVENTOR MISTAKES
Here are some of the most common mistakes new inventors and creators make that can add up to costing tens of thousands of dollars very quickly. This information was created by experienced inventors to help you make wise spending decisions.
Not Prepared To Fail
Every successful entrepreneur will tell you that failure is part of the success formula in most cases. Especially when it comes to success in launching or licensing products. Here are some important facts to keep in mind.
1- According to the USPTO, only 2% of issued patents ever make money.
Think about that, only 2%. Every patent holder thinks they have the next million-dollar idea. That’s why doing proper market research is so important at the beginning. Follow our market research steps in this guide to help you do a proper search.
2- According to Harvard business school, 96% of all new products introduced to the marketplace fail every year. Even good products fail, for many reasons.
3- According to Product licensing experts, the success rate of products that are licensed and net a financial gain to the licensor is approximately 3%.
Regardless of these statistics, most inventors disregard these facts, don’t do the proper market research investigation, and still move forward by risking thousands to hundreds of thousands of dollars on an idea that in most cases will not have any financial return. Watch this video.
Regardless of what you hear on any TV commercial or online advertisement, there are ABSOLUTELY NO SHORT-CUTS to having your idea produced and making money fast and easy.
According to the U.S. Government, all invention promotion companies, idea submission companies, and any company that tells you they can help you sell or license your idea or patent is either ineffective or outright fraudulent.
The actual success rate for most of these companies is typically around 1% or less. Regardless of what they tell you and all the fancy testimonials on their website. You need to do the initial research yourself. Follow this guide and learn for free.
Assuming Everyone Is Your Customer
Nothing is for “everyone”. Don’t make the mistake of assuming who will buy your product and use it. Do your market and consumer research. You need to figure out who is your true customer? Who needs this and who will buy it? Why will they buy it? This type of claim needs to be supported by research found in your market research and customer discovery. Be prepared to show proof to potential investors or partners.
Paying For Invention Services Too Soon
This is one of the biggest mistakes people with ideas make in the beginning. Many invention services provide frivolous services that amount to nothing for inventors. Typically they offer a “free packet” to earn your trust and then offer to develop, protect and promote your invention ranging from $10,000 to $20,000. While you may obtain a patent-pending, virtual prototype and even get submitted to companies, their efforts result in little or no success in generating any income for you. Most of these companies are scams and ripoffs. Visit our Inventor Alert page.
Payment For Services
Never pay for services with cash, or any apps linked to your bank accounts. Same for checks linked to your bank accounts. You will get the most legal protection using a credit card. If they tell you, that by not using a credit card you can pay less or get a discount, Don’t fall for that trick. PayPal is another option being that they offer a purchase protection program as long as you qualify.
When hiring a coach, make sure you ask the questions we shared with you in the previous section. Many invention coaches don’t have real product success or experience themselves, interview them, and don’t fall for the trick of making monthly payments either. We go further into inventor coaches later on this page. Timing is also very important.
Too Soon Mistakes
1- Hiring a coach
2- Rushing market research
3- Hiring the first attorney you meet
4-Rushing the process whether licensing or producing yourself to launch
5- Building a website
6- Paying for services
8- Giving up equity to save money
Paying Large Upfront Fees To Any Invention Submission Company
According to the United States government, most of these companies are either ineffective or outright fraudulent. Don’t pay anyone excessive up-front fees for invention services, instead consider asking for benchmarks to be met and only pay as each milestone is met.
Thinking Your Product Will Become A Household Name
Most products don’t become household names. And that’s okay. It doesn’t have to become a household name to be considered a success! It’s rare but possible with good execution and a lot of luck. Getting on national television, like Shark Tank can help make that a reality.
Working On Multiple Products At Once
One product idea can keep you very busy. If you have a lot of ideas then make a list of your ideas and prioritize them, but focus on one at a time. Then, if you have downtime, i.e. you are waiting on the patent attorney or some company to get back to you, you can begin doing research on the next one or playing with other ideas as long as your FOCUS is on one at a time.
Not Joining Your Local Inventors Club
Inventing can be a lonely journey, especially if you don’t have the support of friends and family. Joining an inventor club will help to educate you on the steps to take and pitfalls to avoid, and you won’t have to do it alone. Find a club near you by visiting www.uiausa.org
It is important to understand what your product will cost to make and what it will sell for, which is vital to know if there is enough margin to be profitable. If you create a product that isn’t profitable, it’s doomed from the beginning. Many new inventors and entrepreneurs who never brought a product to market, leave out many important costs.
Filing For Provisional Patent Application Too Soon
Most first-time inventors go straight to a patent attorney to protect their idea without first doing any market research. There are several steps to take first, research the competitive landscape, researching the consumers, and really developing a product that will sell should all be done before spending the time and money to protect it. According to the United States Patent and Trademark Office USPTO, approximately 2% of all issued patents ever make any money.
Sharing Product Publicly With No Protection
This can have a serious consequence if you are not aware of the rules. Keep it private until you have a PPA or have an NDA handy. Don’t share your product or idea publicly until you have had a conversation with a patent attorney or patent agent.
Thinking Licensing Is Easy
Getting a licensing deal isn’t easy at all. Even if you got a deal, it does NOT guarantee any financial profit. Most licensing deals don’t generate any return for the inventor.
Trying To License An Idea
You must have some sort of protection to license your idea. Patent-pending or have the company sign an NDA, but many companies don’t sign NDA’s.
Manufacturing Too Soon
Many inventors make the mistake of investing in inventory before validating or proving anyone will buy. Try to get early purchase orders to validate your product, packaging, pricing, etc., or generate demand for the product before going into production. And don’t forget to thoroughly vet the factory before doing business with them too. Produce too soon, and your garage will be filled with product collecting dust. This is not a step to rush.
Rushing The Process
Bringing an idea to life takes time and patience. If you try and rush the process, you will make costly mistakes. No matter what path you decide to take for your idea, licensing or venturing, you need to take your time, and not miss any of the important steps necessary to move the idea forward. Inventing is not cheap at all.
Skipping Market Research & Validation
This is the most important phase or stage to make sure there is no product like your idea and there are thousands of potential customers who will buy this product. This stage is so crucial, and it must be performed by you. So get busy with your market and customer research and keep track of everything you learn.
Market research is a vital step in evaluating your idea to determine if it is worth pursuing and if there is prior art that would prevent you from getting a patent.
Questions You Should Answer While Researching The Market
1- Is my product idea completely new or is it taking an existing product and adding new features that solve a problem that the current design does not help?
2- Does my product idea solve a problem for thousands to millions of people or does it solve a problem for a few hundred people?
3- What’s the problem it solves or helps?
4- What materials would it be made of?
5- Is the process to make it commonly used or a new type of process not commonly used?
6- What would it cost to make one unit?
7- What will your customers be willing to pay?
8- What benefit(s) does it offer to the customers?
9- How many parts is the product made of?
10- What makes your idea unique and different?
11- Can you get patent protection?
12- Who will buy it?
13- Why will they buy it?
14- Where will they buy it?
15- What is your marginal potential? – Typical rule of dumb is 1×4. So if it cost you $10 to make it (your COGS = cost of goods) you can sell it for at least $40. Your marginal potential could be less like 1×3 if your plan is selling it direct to consumers and not traditional retail.
16- How will it be packaged?
17- What industry would my product fall under?
18- Does a category for this type of product already exist?
19- What will the packaging look like?
20- What market does it fall under?
21- Does it have a WOW factor?
22- What is your Unique Selling Proposition (USP) that separates your product from others on the market?
Google Key Word Search
Search using keywords to describe your product idea. Keep track of all the words you search, and any results of similar products.
Google Image Search
Click images under your search box to review all images associated with your keyword search. Print or screenshot to keep in a folder properly labeled for this product search.
Do a search on www.Google.com/patents
Use keywords search to see if you can find any patents with a similar product idea to yours. Anything you find similar or close to your idea, save the name of the product and patent number or screenshot the patent number. This information will be useful for your patent attorney. If you want to get a patent you will have to make sure that there is no “prior art”, meaning there can’t be anything like it in the world, or previously patented at any time. Google patents work with the US patent database and allow you to search using keywords just like any search. It is much easier than the USPTO search feature and a fast and easy way to see what other patents that exist.
Find and research any companies selling products like your idea or similar. Make a list of all the product names, the brand that sells them, their features, benefits, and price. Note where they sell their products. Are they Online only, in retail stores, or both? Visit their websites and learn as much as you can about their products and company. Consider subscribing to their website to stay up to date on new news. One of these “competitors” could end up being your licensee.
Retail Store Visit
Make a list of stores close to your home that sell similar products in the same category as your idea. Visit each store and look for your idea or products similar. Look at the packaging and examine the information. Speak to the store rep to see how the products are selling. Ask about product reviews. Which ones are selling more and why? How important is the price? Are there different sizes or preferred colors? Keep track of your questions and answers from the store rep.
Local Inventors Club
Is a great resource to meet other inventors, entrepreneurs, and innovators who may be able to help guide you with market research and assistance to validate the need for your idea. You might meet one or more inventors with products in the same industry, which could be very helpful. Visit and join for FREE, United Inventors Association to find your local group and get access to the best inventor resources.
Can you find any products like your idea or similar on Amazon. Review the entire page from top to bottom. Check out the customer reviews and any feedback or suggestions.
The same type of search as you would do online and on amazon. In what countries are products like your idea being made? Can you find anything like it or similar?
Check out Kickstarter and Indiegogo to see if there are any active or recent campaigns for products similar or in your product category.
Tradeshows are a great source of information to learn about your product category and the industry. You will have the opportunity to meet and network with other inventors who have licensed or manufactured products in addition to connecting with decision-makers at companies that license from inventors. Many tradeshows offer a lot of educational seminars about the industry. This will usually require some form of travel and hotel, but it is well worth the expense when you are researching an industry if you can afford to. Check out TSNN.com to find tradeshows in your category and possibly near you.
Part of this step is to define not just how painful the problem is, but also whether ts a big enough problem across lots of people to make it worth building and resolving the problem. While performing this research, you may learn of bigger pain points and issues also not being addressed. Go into the process open-minded when doing your market and customer research. Learn more.
Trade & Industry Magazine
There is an association and often a magazine for EVERY trade and subscribing to yours is a great way to learn about the industry and other competing products.
You need to prove there is a need for this idea, and that thousands if not hundreds of thousands of people need it and will buy it. Can it be made at an affordable price.
Market Research Results
Did you find any products that were exactly or really close to your idea? If so, it probably makes sense to move on to the next idea if you have another. Maybe consult with a patent attorney or another inventor who can advise on what to do. If you didn’t find anything like it, and it solves a problem for a lot of people, and you believe you can make a profit from it, then keep working on it. Making a proof of function prototype and getting a patent search are some of the next steps.
Intellectual Property Protection
Whether you decide to license your product or venture it, having patent protection is vital.
Types Of Intellectual Property
There are 4 types of intellectual property:
1- Patent 3- Copyright
2- Trademark 4- Trade Secret
What Is A Patent?
A legal license that protects inventors and their inventions from being used by anyone else. It gives the inventor the exclusive right to produce, use and sell for a period of 20 years.
What Is A Trademark?
It is a designation of a good, or service, used to notify a customer or potential customer of precisely what good or service they can expect to receive when they see that mark associated with its sale or advertisement.
What Is A Copyright?
It’s the exclusive legal right, given to an originator or an assignee to print, publish, perform, film, or record literary, artistic, or musical material, and to authorize others to do the same.
What Is A Trade Secret?
It protects any proprietary methods or formulae of a company or an individual that have immediate, economic value to competitors.
Types Of Patents
There are 3 types of patents:
1- Design 3- Plant
A Design Patent
Legal protection is granted to the ornamental design of a functional item.
A Utility Patent
It protects the way an article is used and works. More focused on functionalty.
A Plant Patent
Protection is granted to an individual who has invented or discovered and sexually reproduced a distinct and new variety of plants, other than a tuber propagated plant or a plant found in an uncultivated state.
Provisional Patent Application (PPA)
Is a document issued by the U.S. patent and trademark office (USPTO) that helps protect a new invention from being copied during the 12-month period before a formal patent application, called a non-provisional is filed.
International Patent, P.C.T.
Patent Cooperation Treaty is an international treaty that makes it possible to seek patent protection for an invention simultaneously in a large number of countries by filing a single “international” patent application instead of filing several separate national or regional patent applications.
Best Time To File A PPA
Filing a provisional patent application too soon can hurt you. Make sure you have already done most of your market research and have found no product like your idea on the market and you have already lined up companies to talk to regarding licensing and/or producing. Speak to a patent attorney about this. If your PPA is coming to its expiration date (12 months) there is a strategy to reapply for another PPA, but speak to a patent attorney about how to do it without jeopardizing your idea.
Inter Parties Review
I.P.R. is a proceeding before the United States Patent Trademark Office, USPTO, in which a third party has alleged invalidity of at least one claim of an issued patent. To learn more about this threat to inventors and issued patent holders, visit and subscribe to U.S. Inventor, www.usinventor.org
Patent Trial And Appeal Board
P.T.A.B. conducts trials, including I.P.R.’s, post-grant, and covered business method patent reviews and derivation proceedings, hears appeals from adverse examiner decisions in patent applications and reexamination proceedings, and renders decisions in interferences. More info. click here.
Is an attorney who has the specialized qualifications necessary for representing clients in obtaining patents and acting in all matters and procedures relating to patent law and practice, such as filing patent applications and oppositions to granted patents. They can give legal advice and help with licensing agreements.
A patent agent, also known as a patent practitioner, is a professional licensed by the United States Patent Trademark Office, USPTO to advise on and assist inventors with patent applications. Unlike a patent attorney, a patent agent is not a lawyer and cannot provide any legal advice, including advice on patent licensing or patent infringement.
Choose Your Attorney Wisely
Don’t rush to hire an attorney. Hiring an attorney is like bringing on a business partner. Move slowly and try to find one that comes recommended from an inventor who had a positive outcome similar to the outcome you are expecting. That outcome should be getting a granted patent for a reasonable price. Lots of patent attorneys are using fraudulent tactics to run up their clent’s costs. Choose WISELY.
Attorney Red Flags
Some key red flags to look out for:
1- Upfront retainer fee.
2- No clients who have received a granted patent in the last 12 months.
3- Can’t give you a ballpark estimate of what your costs may be.
4- Not willing to share references.
5- Unfavorable reviews online.
6- Any claims they can get you a patent.
7- You are asked to sign over rights to your invention.
8- They claim to have insider contacts to expedite your patent or help get a licensing deal.
9- Tells you a patent search isn’t important.
10- The attorney offers to buy out the original patent holder.
Recommended Patent Attorneys You Can Trust
The following attorneys have been used for years and multiple times by members of our team. These are some of the best attorneys in our industry who also support our mission of helping inventors not get scammed or ripped off.
Joe is also an inventor himself.
Now it’s time to bring the idea to life showing how it works and proving functionality. Always best practice finding a provider thru a personal referral if possible. If you need help, let us know.
What Is A Prototype?
A first model of something, especially a machine, from which other forms are developed or copied
Before start building a prototype, you want to draw some basic sketches. Think about what materials the product will be made of. Will it be one piece or multiple pieces? Will it need batteries, magnets, or any other special parts to complete it?
Computer Aided Drawing (CAD)
Today, finding a 3D CAD developer isn’t very hard. And one document you will want to get familiar with is an NDA. It will protect you and your idea from being shared with others. CAD creation will help make certain your product can be produced with the necessary functionality. It can help you decide on base materials, and help calculate a base estimated cost.
Types Of Prototypes
3- Looks-like & works-like
Is a prototype that focuses on the exterior of your product which will be made of plastic or metal.
Is a prototype focused on showing that the internal electronics or mechanical components work properly.
Looks-Like & Works-Like Prototype
It’s the first time that appearance and functionality come together in a single prototype.
Using computer-aided design software to validate a design before committing to making a physical prototype.
Testing the functionality of the prototype to make sure it works exactly how you need it to function. 99.9% of prototypes need some sort of correction when first prototyped. Focus on the key function(s). Don’t fall into feature creep syndrome. Focus on MVP, minimum viable product. Get it out into the marketplace working as you envisioned to solve a problem or fill a consumer gap that no other product was solving. Make the necessary corrections to the prototype, then test again. Repeat until you correct any issue(s) and get your CADS updated and ready for production. It typically takes 3 cycles of prototyping and testing before going to market with a product that has lots of moving parts and functions. Could be quicker with a less complicated product. Having the right team also plays a factor.
Tech Pak Prepared
Your tech pack is a document(s) containing all the technical information about your product. It explains every detail including all part(s) and materials of your product. It could be a combination of documents and CADS.
In some cases, you can prototype simple parts yourself. Click here.
License Or Venture
If your market research revealed your idea is needed and solves a big problem for a lot of people and you can get a patent, it comes down to either licensing or venturing. Here are some basics on each path.
Do I License Or Venture?
Great tips by Lisa Lloyd on making this decision, click here to watch.
Licensing is working thru others, known as licensees who take your product to market and pay the licensor, who is usually the inventor and/or the owner of the intellectual property, a royalty on units sold. Usually, there is a minimum number of unit sales per year and in some cases an advanced payment.
Venture or take to market yourself, is basically exactly that. Deciding to manufacture and distribute yourself. Build a team, raise capital, produce and sell the product.
1- Little financial risk
2- Quicker to market
3- If the right company with multiple strong distribution channels and a national sales team in place, sales can grow very fast. Finding the right company is extremely important.
4- You can start focusing on your next idea
NOTE: A licensing deal alone does NOT GUARANTEE any profits. You should educate yourself on licensing agreement terms and language. You should have your patent attorney and someone experienced with licensing contracts, helping you.
1- Don’t earn as much money per unit sold.
2- No control over design, packaging, manufacturing, and where the product is sold.
3- Signing too soon with the wrong company.
1- You control every aspect of the design, production location, packaging and where to sell the product.
2- You keep the profits after all your expenses are paid.
3- You control how your dollars are spent.
1- High financial risk
2- You are responsible for every aspect relating to designing, producing, and launching the product.
3- You are responsible for hiring a team of individuals with the necessary experience to put the company in the best position to be successful.
NOTE: 95% of all product businesses fail within 1st 5 years, so having the right people on your team is CRITICAL
4- If the company fails, it’s on you and your executive team.
Inventor Confidential, by Warren Tuttle, is found on our books page under resources. A great read for any inventor looking to learn about licensing and manufacturing.
Why Products Fail
There are a number of variables that can cause a product to fail. It could be one of the following reasons alone or a combination of reasons.
The Wrong Team
Having the right people with product experience, whether planning to license or produce and launch, is one of the reasons for not succeeding. If your team can’t execute on the important milestones relating to product launch and manufacturing, it will be very tough to succeed.
Timing can sometimes play a crucial role when bringing a product to market. The recent pandemic showed exactly how timing can be crucial.
No Real Need
You must do your market research and talk to people who would need this product. Your idea must solve a problem big enough to sustain a business and make profits over expenses. In most cases, you should have a customer market potential of hundreds of thousands of potential customers.
This is when your market research comes into play and is crucial to understanding who your competitors are, what their products cost, and how to price your product correctly.
Poor Product Design
If your product is made cheap and looks cheap, could affect your success. Could be due to one of the following issues or a combination of issues relating to the functionality, performance or could just be a technical issue.
Poor Marketing Execution
One of the top reasons products fail.
Too Much Competition
If your product is too similar to your competitor’s product with no real unique selling proposition or differentiation, your target customers may choose to buy the more known brand(s) or familiar product(s) on the market already.
Product Imitations & Infringement
Customers may not be able to tell the difference between the real original product versus the knock-off imitated product. Fighting a knock-off or flat-out infringer can be extremely costly and time consuming.
Lots of companies claim to have high success rates by helping inventors get licensing deals. When in FACT the average success rate of these types of marketing and promotion companies is 1%. Any company that verbally tells you this, ask for their success rate in writing. You will never get it. If they do provide in writing their success rate, please contact us.
Real Licensing Experts
Vetting An Idea For Licensing
What Companies Are Looking For
How To Find The Right Company
How to find the right company to license your product, click here.
An agreed-upon dollar or percentage paid by the licensee is the company licensing the product. Usually on each unit sold. The range is 1%-8% of the net wholesale cost. Most deals fall in the range of 3%-5%.
The time it takes from signing a licensing deal, to getting on the shelf could be up to 2 years depending on the company getting it rolled out nationwide. Royalties are typically paid 30-45 days following the end of each quarter.
When venturing or launching any type of business, you increase your chances of success by having a business mentor in the industry or sector your business will be operating within. Also important to be connected with your local small business resources such as SBA and SBDC.
Having The Right TEAM
Having the right team to venture into a business is extremely important and could easily be the deciding factor for which the company succeeds or fails. Choose your team wisely.
Finding A Factory You Can Trust
The best option to finding a supplier is always when one is recommended to you by someone in your network who has used this factory in the past or present. Get a sample of their product so that you can review the craftsmanship of the product. If you don’t have anyone in your network to make a factory or supplier recommendation, reach out to us and we can help.
Create A Formal Request For Proposal, RFQ
This is a document that solicits proposals, often made thru a bidding process, by targeted companies that you find to be potentially good partners to produce your product.
Make sure you understand all costs associated with manufacturing & launching a product. Here are some basic costs to be aware of:
2- Minimum Order Quantities, also know as MOQ – is the minimum amount of units the factory requires.
6- Operating Costs
7- Liability Insurance
10- Insurances, certificates, permits, etc.
Typically 50% of the mold cost is paid up-front. Next, the client receives samples. Once samples are approved for the production of MOQ, the remaining balance of molds is paid.
Distribution & Fullfillment
If the fulfillment of orders will be done by yourself, then you will pack and ship orders as they come in. This is also known as drop and ship when the product delivery is handled by the manufacturer and not a retailer. If you need to hire a fulfillment warehouse, they will handle all your inventory storage, orders as they come in, and shipping to your customer.
Great Resource For First Time Entrepreneurs
Kim Perell is an award-winning entrepreneur, bestselling author, executive, and investor. She helps scale businesses from $0 to $1 billion in annual sales. She is a rockstar business coach and mentor to new entrepreneurs looking to make the JUMP into becoming an entrepreneur and new business owner. Learn more about all of her amazing programs. Kim Perell.
There are lots of dishonest people charging inventors high up-front fees and monthly retainers for coaching and getting into big-box retail. Most of them have little to no success themselves as inventors.
When Do You Need A Coach
Having a coach or mentor is vital to having success in any area that is new to you. After you have completed your initial market research and found your idea to be viable in the marketplace, you can use this free educational web page to guide you thru the process. We can help you by clicking here for a free complimentary call with one of our Inventor Rescue team members.
What To Look For In A Good Coach or Mentor
Here are some basic requirements an inventor coach should have experience doing themselves on their own inventions if they are charging high up-front fees. This list is in no specific order.
1- Market Research & Validating an idea
2- Sourcing & Production
5- Distribution Channels
7- Patent & Trademark
8- Can share references to other inventors they recently helped as a direct result of their services
Have They Ventured A Product?
Have they brought to market any product(s) where they handle all production, distribution, and launching a product into the marketplace.
Have They Licensed Any Products
Which inventions of their own have they licensed with financial success? If they say they haven’t licensed their own invention, a big red flag is if they are charging inventors up-front fees for help with licensing.
Who Have They Helped Recently In Last 12 Months
Ask them directly for references to other clients they are helping now or have helped in the last 12 months who have reached success as a direct result of their coaching.