So you've had a great new product idea, but what do you do next? Thousands of new products are launched every year but the journey from idea to lauch is not as easy or as straightforward as it appears. Many people think that there must be lots of people just waiting to give inventors lots of money to develop the next big thing, but in reality it's not quite like that.
There are many individual investors, like the dragons on
Dragon's Den, and also several investor funds which support
inventors with new ideas. There are also companies who license new
ideas from individuals and small businesses. However these are
serious business men and they require a genuine commercial
proposition not just a back of an envelope sketch before they part
of their hard earned cash. So how do you go about turning your idea
into a viable, investable concept that will impress industry or
investors?
Well, in all likelihood your funds will be limited compared to what
a company may invest in new product development. And, even if your
funds aren't limited, you will probably want to minimise the
money you put into your idea until genuine commercial interest has
been established. So what is minimum requirement to turn your idea
into a viable business proposition? Well basically you will need to
answer three questions before being able to sell your idea or gain
investment:
1. Is the idea protectable?
No company will license your idea, and it is unlikely that will an
investor back it, unless it can be protected to stop anyone else
producing the same product. Protecting your idea is a must for a
second reason – it helps deter a potential licensee or
investor simply copying the idea without paying you.
A confidentiality agreement, a global patent search, patent pending
status and a registered design application are all potentially
essential elements to protecting your idea. Professional advice,
from a Chartered Patent Attorney, on how to protect your specific
idea is the most sensible route to go with this. (See the links at
the end of this article.)
2. Will the idea work?
In some cases the answer to this question is a simple yes, but in
some cases you will need to prove that your brainwave is possible.
The best way to answer this question is to be able to present a
working prototype. The prototype does not have to look attractive -
it just needs to prove the functionality. If funds don't
stretch to a prototype, then a feasibility report from a qualified
design engineer on the viability of the idea may have to
suffice.
Top Tip: Always ensure a confidentiality agreement is in place
before revealing your idea to anyone at all, other than a Chartered
Patent Attorney.
3. Will anyone buy it?
This is the hardest question to answer. Once you have proved your
idea works, if necessary, and sorted out adequate protection, you
are in a strong position to start answering this question. As seen
on Dragon's Den, the best answer to this question is to have
letter of intent that states a retailer or distributor is prepared
to buy x number of your product at x price. The way to achieve a
letter of intent is to present your idea to as many different
buyers as possible. The difficulty is that retailers and
distributors will need more than your rough sketch, patent
application or working model. They need to impressed by the idea
and instantly see it's potential.
In order to impress a potential buyer you will probably need a
product sell sheet. This is a one page description of the idea that
highlights the main features and benefits and includes images of
your product as it is likely to look once it has been manufactured.
You will need a professional product designer to either sketch and
present your concept or ideally create a 3D model using computer
aided design (CAD) and render it to look like the final
product.
Then you need to get your product in front of potential buyers.
Trade shows, face-to-face meetings, and direct mailings are all
ways to approach industry representatives. A good sell sheet will
do most of the talking for you, so don't be nervous.
In conclusion, your job is just to spark the interest of a
potential licensee or investor who will ensure that your idea makes
you a profit. To do this you need to answer three main questions:
is it protectable, will it work and will anyone buy it.
Professional help will be required, in most cases, to answer these
questions but the process described in this article should keep
these fees to a minimum while maximising your likelihood of
success.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.