What is it that appeals to you about being an entrepreneur or inventor? For most of us it's not to do with the money necessarily, or even the fact that we can be our boss. For the majority, it all comes down to creative freedom, the joy of inventing and creating, and the incredible satisfaction that comes from seeing our products on the shelves and in the papers. All the rest of it - the financing, the packaging, the order fulfillment, the budgeting, the marketing . . . It's all just a big pain in the neck that prevents us from doing what we want to do.
Well if that's how you feel, then you may be interested in licensing. When you license an idea you see, you'll get to spend the time focused on doing what you love - coming up with the ideas in the first place and testing them out - while letting someone else worry about the finer details.
This is your last chance saloon to side-step the actual process of building your product yourself, but this option is a little different than using something like Spreadshirt say because it allows you to make something unique and new rather than having to stick to a tried and tested formula. And it’s different from 3D printing, in that you have the option to mass produce and even to get help getting your product into stores. There are downsides, though, as we’ll see.
What is Licensing?
When you come up with a great idea for a product you have, two routes open to you. Either you build an entire business around your idea and invest in manufacturing, marketing and the rest of it (though we will learn how to do this the easiest and cheapest ways possible!), or you sign a product licensing deal to let someone else handle that on your behalf.
What this means is that you'll let an established company worry about the financing and marketing while getting a cut of the profit for coming up with the idea in the first place. This is great news if you don't have much cash as it means there's a lot less risk. But it can be a bad strategy if you end up with a megahit on your hands - as generally the deal will give you less than 10% of the profits.
Is Licensing for You?
Before you begin then, ask yourself whether you want to be a businessperson or an inventor. What is it that drives you? Seeing your product on the shelves and having more time to spend with your family? Or having complete control over your 'baby' and shooting for the stars?
Of course, this doesn't have to be an 'either/or' scenario depending on the nature of the agreement you sign, and you can always license one product to test the viability of your ideas and gain financing for your next idea…
How to Get a Licensing Deal
But just because you've chosen to go the 'easy' route, doesn't mean that it's going to be a walk-in-the-park. Getting a company to take a chance on your idea can be incredibly difficult.
The first thing you need to do is to protect your idea. Whether that means getting a patent, a trademark or a copyright you should do so right away. Not only will this ensure that companies don't decide to use your idea without paying you, but it will also demonstrate that you're serious, sensible and that you know your stuff.
The next step is to see how your invention can be a serious business opportunity. This means knowing how much it will cost to produce and what people will be willing to pay for it. It means identifying a target demographic and a route to market. It means doing market research and assessing the competition. In short, you need to present more than an idea when you try to sell, and you need to show that you're serious. What we’ve looked at in the last chapter should help you with that.
Now learn to present your product in a compelling way and practice your public speaking. Make sure that your passion comes across and that you can get people excited for your creations, but that you also come across as realistic and down to Earth. If you can identify one person within a company who's excited about your product early on then, that's a great asset to have. Speak with them and get advice on how to approach the company.
Finally, be prepared to fail - at first at least. Don't get disheartened, though, keep trying and try to learn from your setbacks. If your idea has legs, then eventually you'll find someone with the vision to see it.
For more information, I highly recommend the book One Simple Idea: Turn Your Dreams Into a Licensing Goldmine While Letting Others Do the Work by Stephen Key.