Browse Tag: money

Money and Inventing….you don’t have to be afraid of it!

One of the most common questions that we receive as an inventor support company is “will I need to pay for this?” The answer, in most cases, is yes. 

Now, don’t let that detract you. As an inventor, you absolutely need to come to the conclusion that this process will cost money. Having a fantastic idea will only get you so far.

From our experience, here are a few things we’ve heard from inventors.

I have an idea, and I want to license it.

As we’ve pointed out in other articles, licensing is hard to accomplish without a working prototype, drawings, manufacturing sourced, etc. You won’t get very far with just an idea and a heartwarming pitch. You need to show the possible licencors that they will make money if they buy your product. That’s all they’re looking to do.

If you (manufacturing company) will produce my product, I will give you a portion of the proceeds from the sales.

This is highly unlikely to work. Manufacturers are typically presented with a slew of products every year, and propositions to become business partners. It just won’t happen. Manufacturers and design companies can’t rely on your product selling so they make a profit as well as break even on the cost of production.

I’ll crowdfund to make my money!

Crowdfunding before your product is feasible is a dangerous thing to do. Most successful Kickstarter and Indiegogo Campaigns have been successful due to a professionally constructed pitch. Most products that have received funding were already prototyped, tested, and manufactured in a small-run fashion. If you only take one thing away from this article today, it should be this: never attempt crowdfunding before you have the product finished.

The best option that you have is to save your money and do it right. You could finance the product through a lender (get a loan), take out a new line of credit, ask friends and family, or even take on a small part time job. If you have the passion to get it done right, don’t let your idea fall into the wrong hands. Protect yourself, save your money (and never pay up front without getting a solid plan in place with your invention production company), and live your dreams!

Licensing: What exactly is it? Is it for me?

When developing a new product it is important to understand the dynamics of the inventing process. We see many inventors who may not understand the proper steps or path to follow to give their product the best chance for success. It is important to keep realistic goal! It is important to know exactly where you are at in development and what can be achieved in each step,  and know how much traction you can gain towards your end goal of production.

It is important not to get ahead of yourself or the stage of development you are in, this can lead to mistakes and wasted resources. One common error new inventors make often is the expectation of a license deal early in development; this is extremely rare! I know there are companies that will contact you after you file for a patent; they sell you on the idea that they will secure a deal for your concept, that there are tons of companies they can market your product to that will take your idea do all the work, pay for everything, and all you have to do is collect a check.

This simply is not true; it is one in a million. It has been our experience that a product has to be brought through many stages of development before a company will even take a look at giving a licensing deal. Usually proven product sales are needed in order for this to happen; meaning you have spent money on the proper steps to get there, by then it may or may not be beneficial for you to take a licensing deal. You only get a small percentage of the sales.

Definition of LICENSING: Licensing means renting or leasing of an intangible asset. It is a process of creating and managing contracts between the owner of a brand and a company or individual who wants to use the brand in association with a product, for an agreed period of time, within an agreed territory.

Your best option may be manufacturing it yourself – do you really want someone else profiting on your idea?  Don’t be a victim of low-cost licensing deals. It may be the biggest mistake of your inventing career.

I have an idea! What should I do next?

Lead-Successful-Invention2Every invention that has ever gone to market started as an idea in the mind of an inventor. The steps that they took directly afterwards are what made them either successes or failures. A lot of planning, development, and even money goes in to the creation of a product – it’s vital that you take the appropriate steps to see an invention to completion.

Here are a few helpful hints that past (and satisfied) clients from Source Direct have shared with us:

  1. Understand your product fully before meeting with an organization that promises to develop your idea. Know what the product’s primary function is, and stick to it. Inventor resource companies, alike to Source Direct, will only work with inventors who have a solid idea and a game plan.
  2. Beware of scam artists who claim to be able to “solve all of your problems with money up front”. You need to be able to trust the organization helping to create your product – they are the lifeline to your livelihood. Look through all documentation, understand milestones, and set realistic goals. Ask the company to show you past successes.
  3. Work with a company that will offer a FREE consultation. Source Direct always gives totally free consultations and evaluations. Some organizations will work with anyone and everyone, just to turn over a profit. Source Direct has a very particular on-boarding process, and it’s taken seriously!
  4. Do a search to make sure your idea has not been patented already. You can do a free search on at www.uspto.gov.
  5. The worst thing you can do is prematurely spend all of your money that you’ve allocated for the project. Know your budget, and make sure that the company you work with is reputable.

Most ideas/inventions fail in the early stages due to lack of preparedness, and not knowing where to go or who to talk to. With Source Direct, we have 25+ years in the industry to back us up!

Do you have an idea? Are you in the early stages of invention development? We’d like to help!

Give us a call at 888-373-3876, extension 212. You can also email Marketing@TheSourceDirect.net and a representative will be in touch with you within 24 hours. Our consultations are always free.