Presentation on theme: "How to Look Big, Act Big, Get Big Andy Daniel President, Enginuity LLC."— Presentation transcript:
How to Look Big, Act Big, Get Big Andy Daniel President, Enginuity LLC
Disclaimer Enginuity currently only looks and acts big I dont always follow my own advice
Businessperson vs. Inventor Businessperson looks for a way to make money Inventor does something they enjoy and tries to make money at it. Do what you enjoy - don't just chase $$$ If you're unhappy, you won't have the energy to continue
Licensing or manufacturing? Licensing is much less risk Unclear which is more profitable Sometimes nobody wants to license Dont ignore manufacturing then licensing
Licensing or, "Why are those crooks offering me so little?"
License Terms What rights are you licensing? Exclusive / non-exclusive Royalty rate Annual minimum Escape clause
Value order A product with a strong sales history A product that is actually being sold A product that it ready to ship A product that is in first production A finished prototype A functional prototype Used dishwater A fantastic idea
Patents Do you really need or want one? The answer is not always obvious. Patents are quite expensive to obtain: legal fees, filing fee, issue fee Patents require payment of maintenance fees Patents take about 2 years to issue
Patents Many patents are easily circumvented Unless your value is in the brilliant invention rather than in its brilliant execution, the answer is probably no. However: you can use Patent Disclosure, PPA, and filing without issue to buy time at comparatively low cost
Manufacturing Economies of scale are critical Good artwork is no more expensive to print than bad artwork Spend money/time up front When shopping for manufacturing, stop thinking like a consumer
Manufacturing Murphy's law: everything that can go wrong, will go wrong Andy's law: everything will go wrong (at least slightly) Check like a hawk at every step Control as much of the process as is worthwhile
Home-based manufacturing Often lower quality at higher cost Very difficult to succeed this way (except for artists)
Product Testing Don't use your friends/relatives - they can't give an honest opinion Unless you plan to ship yourself with each copy of the product, hand it to the tester and stand back - say nothing. –When they ask you a question, ask them "what do you think?"
Packaging Your most critical component That's what people see in the store Hire an artist
Typical product costs Customer buys product for $19.95 Retailer buys product for $10.00 Distributor buys product for $8.50 Publisher manufactures product for $5.00 Don't forget reps, advertising, etc. You must produce your product for 1/4 to 1/5 of what consumers will pay
Perceived Value Consumer should feel that they are getting value for their money Big: consumer likes this, retailer doesn't (takes shelf space) Heavy: consumer like this, retailer tolerates it (higher freight costs)
Advertising Does it really work? –You need 1000's of ads for an order –You need repetition before people will remember you (some say 7 times)
Advertising The Internet –as a source of info, it's the best thing since sliced bread The great equalizer - NOT! –unless you're Microsoft, it's a "pull" medium Face-to-face selling –far and away the most likely for a sale (call first!)
Find Novel Things to Do Look for novel ways to sell Look for novel things to do Look for free/inexpensive ways to do things better
Chain Stores Much tougher to get into than small stores But - convince one (tough) buyer, sell to 100's of stores all at once
Chain stores + Lots of customers + Much bigger orders - Usually demand a price break - Not interested in pioneering anything - want proven sales - Often demand return privilege and dating
Small Stores + More willing to try a new product (if not avail at K-Mart!) + Willing to try "local" product to help fellow small business - Usually tiny order + Able to steer customers toward your product + Can result in a more targeted customer, esp. at high end
Competing with existing brands Why should the consumer buy yours? Why should retailer carry your product?
Learning About Your Industry Every industry has a "way they do things". Try and learn it. Your customers will usually want to do them the same way.
Trade Magazines A great source of information. Very often FREE, otherwise fairly inexpensive. Ads are the most useful part for learning about the industry. First issue - read every word. Other issues - skim it.
Trade Shows Attending - often free to attend & you'll learn alot Exhibiting - quite expensive & be sure you can deliver product/service immediately - buyers are not interested in "later" Attend before you choose to exhibit Follow-up is everything
Appear Professional Business cards, stationery, 800 numbers Try to appear much larger than you are It helps to appear like a serious player with both customers and suppliers, but it's much more important with customers
Web Sites need I say more?
Your Home Office Separate business and fax lines (not a home line) Fax machine Letterhead Business cards Separate checking account Answering machine in business voice Laser printer
Efficiency Develop your systems Try to group your work - it's very inefficient to switch tasks constantly Develop your relationships with vendors - once it works, it's trouble-free Use your computer to manage tasks
Phone calls "Hello, this is John/Mary Smith of Incredibly Successful Inc. I'm in the office but don't want to speak to you right now. Please leave your message at the tone and I won't return your call"
Phone Calls Buyers will never call you back Vendors will call you back within 15 seconds –if a vendor doesn't return calls promptly, find another vendor
Long-term success Don't become an individual service provider Theres only 1 of you, and there are only 24 hours in a day
Plan to Succeed Don't leave yourself with 2 losing possibilities example: short run of a product that cannot be remanufactured
Important Lessons You never know what people will like You never know which contact is important
In Conclusion… Its not for everyone… You may or may not succeed… Its quite a ride… Questions?