Finding ways to turn a great idea into a money-maker is the dream of every inventor, but it isn’t so easy. The truth is that most original ideas don’t become profitable. Some inventors try to develop and market their innovation as a product and fail. Others want to hand it off to someone else in exchange for cash, only to be rejected.
Even the best ideas need to follow a logical process to realize their potential value. That starts with a patent application to the U.S. Patent Office. Otherwise, your idea isn’t your exclusive property.
Before you hit the market, there are some important steps to follow.
Do Your Research
First, you need to research whether or not you can obtain a patent. There are thousands of U.S. patents in effect, and someone else may have had the same idea. Even if your invention merely resembles an existing one, you could be hit with a lawsuit.
You can do your own patent searches at no cost, though it may take up a lot of time. Learn the patent classification system in order to narrow your search.
The second is the appeal. Your invention must be something people are willing to buy. Identify the purchasers of similar products and collect feedback from surveys or focus groups. This will help you determine whether you have a marketable concept on your hands.
Determine The Costs
Another critical factor before developing your idea as a product is estimating what it will cost to produce. If it employs parts or materials that aren’t readily available or requires extensive labor and expensive equipment to produce, the expenses involved, plus a profit margin might raise the price to a point where people won’t purchase it. This is one of the first things that industrialists or investors will look into.
It may be that there are similar products sold by offshore manufacturers who can provide the same functionality at a lower price. Take some time to explore the market to see what products are out there, how they’re made, what they cost, and where they come from. Without thorough research, your invention could wind up losing money.
Lack of funds for product development is the primary obstacle to most inventors. To provide the facilities to mass-produce, market, and ship your product, you’ll need significant capital. You also need to cover operating costs for the initial period, as most new businesses need time to gain recognition and turn a profit.
Traditional methods include loans or investors. But a modern alternative is crowdsourcing. This is done on websites where large numbers of donors or investors each provide smaller amounts.
None of this will work out if you don’t obtain a patent. It’s not unheard of for competitors to steal an idea and file a patent first, which means they could actually sue you.
Bring Your Product to Market
A crucial first step to marketing your idea is to develop a prototype. While you’ll have images and diagrams, investors and consumers will connect more easily with a finished product. They will experience how well your invention looks, feels, and how it performs.
If you’ve got a prototype in hand and have obtained some funding, it’s time to develop a business plan. You need to determine where and how you’ll make the product, what market segments you’ll target, how it will be packaged, and much more.
If building a company from the ground up doesn’t appeal to you, you should focus on licensing it to someone else. You’ll only get paid a royalty on what’s actually sold, usually five percent or less. This can be discouraging if you were hoping for more. But the upside is that you don’t have to do anything further except cash the checks.
Though you may be excited about your revolutionary invention, making money isn’t guaranteed. You have to file a patent, and ensure that no one else has filed a patent for the same idea. If you want to sell the product yourself, you have all the burdens of starting and operating your own company. You might choose to simply license it to someone else and move on to producing the next great idea.