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Archive for the ‘Licensing Products’ Category

Alternative Strategies for Entrepreneurs

Wednesday, August 19th, 2009

by: Geoff Ficke

The ability to succeed as an entrepreneur is one of the most rewarding experiences any person can enjoy. Seeing your product on a store shelf is an amazing rush. Knowing that your service is benefiting the public is incredibly rewarding. Beyond the obvious monetary rewards, the knowledge that you have achieved a level of success most people can not even attempt is a significant gift.

So what does an inventor, or creator, do to advance their opportunity if they do not have classic entrepreneurial makeup. In my consulting business I see an inordinate number of great product placement opportunities and an inversely small number of real potentially successful entrepreneurs. It is very tough for anyone to step out of their comfort zone and wear a completely new shirt. This is one reason there are so few entrepreneurs and so many dreamers. Nevertheless, there are opportunities and strategies that can overcome personal entrepreneurial limitations.

There are numerous, sound, legitimate, capable consulting firms that can handle business opportunities for inventors. They are able to perform a basket of services that most individuals would find overwhelming. A good consultant saves the client time, money and mistakes. Make sure you interview more than one firm, ask for current and past references, request samples of products the firm has developed.

Do not use an invention submission service, ever! This is always a road to heartbreak hotel.

An effective consultant should be able to offer a strategy for execution before the inventor lays out a single dollar. The firm should be able to perform, or have access to professionals that can perform every aspect of the projects needed elements. If the inventor has certain abilities, (ability to assemble financials, engineering, production of 3D CAD art, etc.) ask to have them backed out of the fee structure, as these can be self-performed. The comprehensive consultant can act as a projects managing consultant (handles every aspect of development, sales, marketing, production, negotiations, etc.). Often, the inventor needs only needs specific tasks performed, in areas where they are inexperienced or challenged. This often includes sales and marketing.

A consultant should be able to clearly advise best strategies, opportunities and limitations the project might face. They should also be realistic in assessing potential for success. Be wary of unbounded enthusiasm and guarantees of success.

Many inventors approach me and state unequivocally that they need a specific amount of money. I have never, never seen an inventor who could justify the amount of money they THINK they need. They are guessing and have not conducted any of the required research essential for quantifying the projects real financial needs.

Many inventors believe they need to raise vast sums of money to complete development, produce and sell their product. Rarely is this so. It is far more likely that a prototype can be sold or licensed, a strategic alliance entered, or a partnership formed, seriously mitigating the need for significant investment dollars. These are a few of the strategies a competent consultant might consider.

As an inventor of a potentially exciting commercial opportunity, it is important that you remain flexible and realistic. Inflated expectations kill more deals than almost any other factor. When I meet an inventor that has been working on their project for many years, I become wary, very wary. This is always a sign that they are deal averse, can not let go, want too much control, or have unrealistic financial hopes.

While consultants are available, there are other potential sources of help for the timid inventor. Many universities now have entrepreneurial study programs and offer mentoring. The Service Corp of Retired Executives is a well-known resource for small business assistance. Also, many local/regional governments have organized small business development programs, recognizing that small business is the principal creator of job growth and tax revenues.

Just because you do not have an entrepreneurial makeup does not eliminate your creative commercial opportunity from potential market success. Investment monies will not be chasing a rookie, limited ability entrepreneur. However, money and opportunity always is interested in exciting new technologies, products and services. Get the necessary experienced help to drive the project and enjoy the significant potential income stream that can be generated when a product is successfully sold, licensed or partnered.

Use Affinity Licensing to Jump Start New Product Sales

Wednesday, August 19th, 2009

by: Geoff Ficke

I recently met a bank executive who had been laid off in a corporate downsizing. The man was understandably concerned about his and his family’s future. He lived in an area that was experiencing exceptionally stark economic circumstances. This gentleman had received a modest severance package, and this slim lifeline was of crucial importance to his immediate future.

My marketing consulting firm had been asked by the former bank executive to review a business opportunity he was considering investing in. He was not sure whether he should plunge into an entrepreneurial venture or hoard the severance and use it for basic family needs for as long as it would last. This is a tough call and one we see people forced to make all too often in these tough times.

Of course, we diligently attempt to advise clients to take the most realistic, prudent path when considering such a lifestyle change. In this case, this family man had never been self-employed. Could he absorb the constant buffeting that entrepreneurs experience as they attempt to start a new business life in a completely new industry? After a good deal of consultation, probing and presenting a mountain of “devil’s advocate” questions, the client was able to impress us with his determination.

The business he was considering purchasing was a small manufacturer of a Home and Garden yard accessory line of products. The products were mundane. There was plenty of competition. He enjoyed no particular Unique Selling Proposition (USP) or pricing advantage.

We could only identify one USP that was not being addressed by any of his Home and Garden category competitors. This was Affinity Licensing.

We called several local major universities and discussed obtaining the rights to use their school colors, mascot icons and logo’s on the yard product. After viewing the products and negotiating use of their trademarks, each university agreed to allow us the license for specific product adornment. We paid a small usage fee, agreed on a percentage royalty and obtained rights for using their art on specific products that we would manufacture, market and sell.

The new business owner, the former bank executive, now had a chance to differentiate his product from his competitors. He made a small inventory utilizing each University license to dress and enhance his Home and Garden accessories. Initially, he sold product to local landscapers, florists and garden shops. The products flew off shelves.

Licensed product, also known as Affinity product, always enjoys superior loyalty from proud alumni, sport team fans and supporters. Affinity products also enjoy premium retail pricing over unmarked competitive products.

Our client, the newly minted entrepreneur, is already expanding production. He is negotiating with the NCAA and major sports leagues for more licenses. His licensed Home and Garden products have been accepted to participate in a national trade show heavily attended by big box retail buyers.

This client simply did not lose his head in the face of great turbulence in his life. He made all of the right moves and was prudent in seeking guidance, support and performing due diligence before he jumped into the fire. The future looks bright at present. Income opportunities abound and by creating a USP for his product he separated his new business from more entrenched, larger competitors.