Licensing Your Product or Service: 15 Simple Steps
If you have a brilliant product or service idea, but selling it yourself seems too overwhelming, don’t worry! You have another option – licensing it to another company. I spoke with Stephen Key, an expert in licensing and the author of One Simple Idea, who shared some valuable tips on how to license your products and services. Let’s dive into these top tips!
Contents
- 1 1. Decide How Much Work You Want to Put In
- 1.1 2. Research Potential Licensees
- 1.2 Take a Peek at Other Patents
- 1.3 Discover a Small Improvement
- 1.4 Wait Before Filing
- 1.5 Thoughts on Getting a Provisional Patent
- 1.6 Take Charge and Be Your Own Expert
- 1.7 Discover Your Target Market
- 1.8 Make an Advertisement
- 1.9 Utilize Different Media
- 1.10 Contact Multiple Companies
- 1.11 Keep It Specific to Your Niche
- 1.12 Find the Right Contacts
- 1.13 Ask About How They Do Things
- 1.14 Get to Know Their Style
- 1.15 Keep Researching
1. Decide How Much Work You Want to Put In
First things first, think about how involved you want to be in the process. Licensing your idea means letting another company do the legwork. They’ll handle marketing, manufacturing, and sales. This allows you to focus on what you do best!
2. Research Potential Licensees
So, you’re thinking about licensing your product or service instead of selling it yourself? Well, let me tell you the main advantage of doing that: less work for you! Yup, with licensing, you can hand over your idea to another company and let them do all the heavy lifting. Pretty cool, right? But here’s the catch – you’ll have less control over the whole thing. So, before you make up your mind, take a moment to think about what matters most to you.
Take a Peek at Other Patents
Okay, you’ve got this awesome idea and you’re all excited to license it. But hold on! Before you jump into licensing your product or service, it’s crucial to do a bit of research. You need to make sure that no one else has patented your idea already. How can you do that? Simple – just give it a good old Google search!
Discover a Small Improvement
Even if you discover similar items, it doesn’t mean you’re out of luck. You can still compete in the marketplace if your idea is slightly different from others.
I believe you don’t have to start from scratch. You just need a good idea that offers a small improvement on an existing one.
Wait Before Filing
I think one of the biggest mistakes people make is filing for a patent too early. While I hold many patents, I believe they are not always necessary depending on the type of idea you have. If you’re still working on developing and testing your idea, you might want to make changes that don’t align with your original patent. So filing multiple times can be very costly.
Thoughts on Getting a Provisional Patent
When it comes to getting a patent for your product or service, I think it’s worth considering a provisional patent application. This application can give you some flexibility to refine and fully develop your idea before you officially apply for a patent.
Take Charge and Be Your Own Expert
The whole process of patenting and licensing can be tricky, so it’s important to have the guidance of an attorney. However, I believe it’s also important not to rely solely on others. Before diving into the licensing process, take the time to figure out what you truly want, what you believe you can achieve, and thoroughly research all the factors involved in licensing.
Discover Your Target Market
I think it’s a good idea to first determine if your product or service will sell before spending money on a patent. You can share your idea with companies early on to see how they respond. If there’s no interest, you can save time and money by not patenting your idea.
Make an Advertisement
To effectively market your idea to companies, you can simply create a one-page advertisement that provides the basic information about your idea. You can hire a freelancer to create an image of your prototype and include all the necessary details.
Utilize Different Media
You can also create a video advertisement to send to companies, which will allow you to assess their reaction to your product or service.
Contact Multiple Companies
One of the biggest mistakes I see people make all the time is giving up on their idea too quickly. Just reaching out to one or two major retailers with your idea isn’t going to cut it. If a few people say no, that doesn’t mean it’s the end. So, before you even start, make a long list of companies that you can reach out to. And don’t let yourself get discouraged too soon.
Keep It Specific to Your Niche
When you’re deciding which companies to pitch your idea to, it’s important to think about where you would expect to find a product like yours if you were out shopping. The more specific you can be, the better your chances of getting some interest in what you have to offer.
Find the Right Contacts
When you’re looking to share your idea with a company, it’s important to figure out who would be the best person to contact. Don’t settle for just a general contact form, unless they specifically say that’s where you should send licensing requests. Instead, you can use tools like LinkedIn to find people who work in marketing or similar areas for the companies you’ve chosen.
Ask About How They Do Things
Once you’ve made contact with those people, don’t rush into pitching your idea right away. It can actually be more helpful to start a conversation with them first. Let them know that you really like their company, and then mention that you have an idea you might want to license. Ask them about the process for doing that, instead of just sending your idea and risking being ignored.
Get to Know Their Style
When it comes to licensing your product or service, things can get pretty complicated. There are a lot of terms and concepts to understand. That’s why it’s really important to study the language of licensing right from the beginning. And it’s not just a one-time thing – you need to keep learning throughout the whole process.
Keep Researching
Whether you’re trying to understand the language, learning about potential companies, or just developing your idea further, licensing takes a lot of research. Every entrepreneur’s journey is unique, so there’s no single right way to do it. Whenever you have questions, don’t be afraid to use search engines to find answers. Even the littlest things can make a big difference in your licensing adventure.
As Key says, The Internet is like the biggest library in the whole world. You can find information on any topic, no matter how small, from many different sources. If you need a licensing agreement, just type in ‘licensing agreement checklist’ and you’ll get an idea of what terms you should include and what your agreement should look like.