Having a great idea can only get you so far. If you want to make money from it, you’re going to have to take it a few steps further. The first step to transforming your idea into a money-making product is by licencing it.
Unfortunately, many don’t know how to do this the right way. However, we do, and we want to help. Today, we’re going to tell you exactly how you can licence your idea or invention and turn it into a profitable product. Let’s begin!
Why Should You Licence Your Idea?
It goes without saying, licencing an invention is the easiest way for you to make a profit off of it. However, it is also the riskiest way because if you do it the wrong way – you could potentially lose a lot of money.
You see, when you licence your idea, you’re basically folding over the rights to your idea to someone else. They’re the ones that are assuming all the risk, and in return, they get the majority of the profits.
The good thing about it is, if the idea flops – you’re in the clear. You won’t lose anything, and you’ll live to see another day and think of another product. On the other hand, the absence of risk means you’ll earn less if the product becomes a hit, but that’s the trade-off here.
The thing is, you have to find a way to strike a good deal so that you don’t lose out on a lot of money if the idea turns out to be a money-printing machine.
How To Licence Your Idea?
Licencing your idea will be harder than you might think, so we’ve decided to break it down for you in a step-by-step guide through the whole process. Here’s how you start.
1. Come Up With A Good Idea
The first thing you’ll have to do is actually come up with a good idea. If you’re fantasizing about just coming up with a concept and having someone else do all the work while you reap the benefits – forget about it. That scenario will never pan out.
So, take your time to fully develop your idea and come up with a really solid, well-thought-out product that you can pitch to potential clients. Once you’re done with that – you can move on to licencing it.
2. Research And Identify Potential Licensees
Once you’ve gotten your idea all sorted out, you should go out and look for potential clients. By clients, we mean companies you feel will be a good match to take your idea to the next level. This is one of the most integral parts of the whole journey.
You see, finding the right company to licence your invention to is as important as the idea itself. Not only will you have to find a company that is willing to take a chance on your idea, but you’ll also have to find the company that’s in the right field of interest. Approaching a food company about a smartphone gadget idea is not the move here.
So, factor in all the important aspects and try to come up with a list of potential licensees to pitch your idea to. If you have trouble coming up with the potential targets, you can always consult with the pros like InventHelp and have them guide you on your road.
3. Approach Prime Targets
Once you’ve shortlisted the companies that you might help you, you should go on and approach them. Set up a meeting with someone from the company that can help you turn this idea into a product and your dream into reality.
One thing to keep in mind here is – you’ll have to know how to sell your idea. Just because you feel like you have a gem on your hands doesn’t mean everyone else will, too. So, work on your pitch before you approach your targets. That’ll be the key.
4. Draw Up A Confidentiality Agreement
Before you get into details, you will have to protect your interests. The last thing you’d want is to get turned down and have the company steal your idea and take all your hard-earned money. So, before you start getting into details and explaining what it is that you want to do, you’ll have to draw up a confidentiality agreement that is going to stop the potential target from poaching your idea. Only once they agree to that can you move on with the licencing process.
As we’ve said, you will have to sell your idea to the client, or they won’t invest in it. You will have to be a great salesman in order for them to grab onto your invention. Prepare all the necessary information and handle yourself with confidence.
Remember, your goal is to have someone else assume the risk, invest the money, and finally share the profits with you. As you can imagine, it might take a lot more than a good idea to have someone do that. So, prepare for your presentation and knock it out of the park. If you do that – we guarantee you’ll get yourself a licensee.
The final step of this whole journey would be negotiating. If you’ve got them to bite – great. However, that’s not where it ends. Now, the ball is in your court, and it is up to you to strike the best possible deal in order to get the most money.
These big companies won’t budge easily. They’re in it for the money, just like you are. They will do all that’s in their power to cut the deals that are best for them – not for you. So, you will have to try and find a way to protect yourself and actually leave that office as a winner. We believe you can do it!
If you successfully do that – there’s only one more thing left to do.
7. Reap The Benefits
Once you’ve secured a good deal, the only thing left to do is sit and let the money come to you. If you did a good job – the money would keep coming, and you’ll have more than enough money to skip this entire process the next time you get a good idea.
There you have it. As you can see, there are a few things you will have to do first, but the good thing is – if you do it right, your wallet will thank you. We can only hope you’ve found this article useful. Good luck with your idea – we hope you strike gold!