An excerpt from my Ebook “Common Sense Inventing: An Inventor’s Guide to Getting Inventions to Market without Going into Debt
By Roger Brown http://www.rogerbrown.net/ebook
There are two questions that come up any time I talk to inventors. The first is “Do you really get your invention ideas licensed for under $100?”
When I say, “Yes,” the second question is “How?” This is the route I take for most of my ideas. I do not pay for a (PPA) provisional application for patent or formal patent. I use a (NDA) non-disclosure agreement and a Sell Sheet when approaching a company with a new product idea.
You don’t need a patent or patent application. There are plenty of large and mid-sized companies that will review non-patented ideas. Companies that are interested in my new products pay for any intellectual property protection, if they desire.
Meanwhile, I get inventions to market spending between $10 and $100 (when no attorneys are involved). Other than the opportunity cost of doing research and other preparation, my first royalty check is pure profit. I am not waiting months or years to earn back the thousands of dollars spent on patents, huge presentations that aren’t needed, professional prototypes, or paying fees to companies for services I don’t need before I break even.
Below is my step-by-step breakdown of how I go from conceiving an idea to closing a deal.
Step 1 – The Idea
Inspiration comes in many forms. You can be walking through a store, see a product and have an idea for a better product right off the top of your head.
Watching TV, reading magazines, driving, or just listening to people complain about their problems with everyday tasks are also great ways to spark ideas.
Seeing an improvement for an existing product or a better and more user-friendly method generates ideas especially if you are the one using the product. Take my sunglass visor clip, for instance. The existing product on the market broke easily, would not hold every size of sunglasses and required two hands to operate.
I had purchased two of those products. Both broke within a couple of months.
My solution was a product that held any size sunglasses and did not require a locking mechanism, so there weren’t extra parts that broke easily. And my version only required one hand to operate.
The best part is I solved all the problems of the first product and was able to sell it at the same price. The consumer gets a better product and does not spend additional money. It’s one of those win/win situations. You can see the visor clip at my Web site www.rogerbrown.net
Step 2 – Research
You must conduct research to see if your product idea is already on the market.
Look in stores that would carry the same type of product. Go to Lowe’s and Home Depot if you have a tool idea and search online. You can also search using the “Images” feature on most browsers.
I do this before looking on the U.S. Patent and Trademark Office’s site because it gives you a broader view of what’s already on the market. It also gives you a feel for what type of word search you want to do once you get to the USPTO site, www.uspto.gov.
I also suggest using Google Patents at www.google.com/patents.
Most Inventors don’t like the tedious part of researching. But once you start doing it, you will find you get quicker at it. You will find your own shortcuts to get faster results. Research is your money saver. It keeps you from moving forward on a project that is destined to fail.
Step 3 – Is Mine Better?
If I do find a similar product on the market I ask myself whether my product is significantly better and less expensive.
I answer this as a consumer, not as the inventor. You have to be able to step back and look at your idea without emotional attachment or you are doomed.
If my product idea is inferior, I drop it and move on. You are wasting your time pursuing a project that is competing with a superior or less expensive product.
Step 4 – More Research
If I do not find a competing product on the market or I know for a fact (not just wishing) that mine is better and less expensive, I research companies.
This is done through contact information gleaned from products in the store, Web sites and LinkedIn.com, where you can find employees within the company. I also look for articles written about the company and press releases that often have contact information for the person in charge of submissions/new product ideas. Thomasnet.com is a great source for information about companies and what they manufacture.
Make a list of companies you want to approach, starting with the big ones. Collect all your contact information. But DO NOT contact them yet. You are still getting your ducks in a row at this stage.
Step 5 – Sell Sheet
Now it’s time to prepare your presentation or sell sheet – a one-page, bullet-point synopsis of what your product does and why it will generate value for the company.
Think about the blurb you see on the back of a book. This blurb gives the reader an overview of the 300 or more pages of the book. Based on this blurb you make a decision whether to purchase the book.
The same can be said for your pitch. Based on how well you grab the reviewer’s attention and convey the market value of your product determines whether you’ll make the sale. When it comes to sell sheets, less is often more.
If you lack artistic skills you may need to find a designer to help with drawings and illustrations. Consider contacting your local college and ask to speak with an instructor in the graphic design department. Ask if they could recommend a student about doing some freelance work.
If you do hire a designer or any outside help, make sure they sign an NDA first and agree on price in writing. Moreover, make sure your agreement states that this project is WORK FOR HIRE. They do not own any part of the project. You are only hiring them for a flat rate to do this work.
You may be able to pay them a royalty percentage with no money up front, with no payment if you don’t land a licensing agreement. There are a number of variations in deals you can propose. You just need to both agree.
Just remember to make sure everything is in writing and signed.
Step 6 – Practice
Practice, practice, practice your pitch. You should know your sell sheet without having to look at it. The botched presentation is where many inventors drop the ball and lose the deal.
Before you call any company you need to be able to talk clearly and concisely about your product. You don’t want to tell the person on the phone you will have to get back to them with information they request. You need to have your pitch down to under 30 seconds. Who wants to hear you ramble for five minutes and still not have a clue what you are talking about?
You are supposed to be the expert on your product. Make sure you are completely knowledgeable of your product and can give your pitch on a moment’s notice.
You want it to sound natural, not forced when you talk about your product. You don’t want to come across as an auctioneer or extremely nervous. Practice will give you confidence and with confidence comes poise – even when the butterflies are flocking in your stomach.
Step 7 – Knocking on Doors
Now that you have your sell sheet completed and your pitch down, start approaching companies to see if they are interested in ideas from inventors. Ask what their protocol is for submissions and read over any paperwork they give you carefully.
Make sure the NDA you are signing covers you and the company. Make sure it does not state that you are sending in your idea freely and giving the company your idea for no compensation.
You would be surprised how many people get excited that a company shows an interest in their idea and completely forget to read the terms.
Step 8 – Fine Print
Once you have received the NDA, read it thoroughly or get an attorney to read and approve it.
Know that hiring an attorney likely will cost you more than $100.
Do not send presentation or sell sheets or any other materials until the NDA is signed by all parties. Make sure you keep copies of the NDA and all emails you have sent and received by the company contact.
Some companies have not dealt with ideas from outside the company and do not have a nondisclosure form. Offer to send them your own to review and sign. You can find NDA forms at various inventor Web sites, including mine.
Step 9 – It’s in the Mail
After the NDAs are signed and delivered, it’s time to send your presentation or sell sheet.
Make sure you keep the originals and have them handy in case the company wants to discuss any aspects of them over the phone. Make sure your contact information is on every page of the materials and any prototypes/samples you may be asked to send along with the sell sheets.
Do not send prototypes unless the company requests them. They do not want to be responsible for items they do not request.
You want to make sure that if any of your materials get separated from the others that they still know who they belong to. Unless your product is extremely complicated you should be able to describe your product within two pages, preferably one.
If not, boil it down to your best pitch and include the statement, “Additional information is available upon request.” If you can’t grab their interest in two pages, your idea – or more likely your sell sheet – may be too complicated and needs work.
Step 10 – Patience
Wait for the company to review your sell sheet. I usually ask the company what its typical turnaround time is for a response.
I wait a week past that time to hear a response. If no response, I follow up with a call or e-mail.
It also helps to ask if there is a better time to send them the materials.
A kitchen company I contacted told me it only reviews submissions the first week of every month. Sending something in the middle of the month meant it would be collecting dust.
Each company has its own system. You need to find out what it is and follow it if you want to succeed.
Step 11 – No Means Move on
If a company declines to go with your idea, go to the next company on your list and start the process all over.
Get used to no. No is a part of doing business. It is not an insult to you and generations of your family. Companies decline offers based on business decisions. If you have a hard time with the word “No,” you need to find a different field.
If the response is yes, ask for a licensing contract for review. Jump for joy and shout a lot … but wait until you hang up the phone first.
Step 12 – Sealing the Deal
Once I receive a contract I make a copy of it. This way I can use a highlighter on it without damaging the original.
I use this copy to mark any areas where I have questions. I read it several times to make sure I truly understand it. If the contract is fine, I sign it and make copies of the signed version for my records. I always keep a copy in another location in case of fire or act of God.
If the company and I cannot agree to mutual terms, I thank them for their consideration and say I have to take my idea elsewhere. Companies understand the word “no,” and that sometimes deals just don’t work out.
That is part of doing business. I have never had a company I told “No” to tell me never to submit anything else.
You have the power to agree or disagree with any clause in a contract and walk away. You are not obligated to agree to anything that is not in your best interest. The company wouldn’t. Why should you?
As always if you feel you are not qualified to read and make a decision on the contract, consult a lawyer.
And finally, there’s this: Dreams are accomplished by those who do, not by those who wish.