Steps to Sell Your Business Ideas and Inventions to IIB

Here, we will break down the three steps on how to sell your business idea whether it is an invention, a product board game, or manufacturing process.

By licensing your invention or business idea, you are selling the rights to a company to develop it into a saleable commodity. The buyer is performing all the necessary actions to take it to market by using their financial and human resources.

Licensing or selling your business idea can be an excellent way for cash-strapped entrepreneurs to get started making money from their inventions.

Step 1: Research Market 

You need to be equipped with data about your market to demonstrate the commercial value of your invention. Do this before you begin preparing your proposals and presenting to investors.

• Marketplace Intelligence – Begin by researching your intended market, including existing products and services, to determine where your invention fits in. What gap in the market is your product serving? Create a database of all similar type products, company data on who is producing and retailing, and distribution channels.
• Focus Groups – Experiment with customer focus groups using friends, family, or neighbors that match the target customer demographic for your product. Reports of these groups’ reactions and feedback will be an excellent addition to your investor presentation.
• Legal Research – Do some initial (free) market research on the patentability of your business idea. Start with a patent search on government websites. This will offer an overview of patent grants.
  • KNOW that patent law is very complex, and a quick (untrained) search will often not give you all of the information you need. We recommend that serious investors hire reasonably priced professional attorneys or experts to do an initial patent search. This will save you tons of time and hassle. You need to know if there are other similar patents granted presently. It is surprising how inexpensive this can be and how much good information can be obtained.
  • PLUS including a professionally prepared patent search in your pitch presentation will impress investors. It shows that you are serious and will answer many of their questions and objections to your product licensing proposal.
  • For less than a cheap television set, you can get a “patent pending” designation from the U.S. government. These two small words, “patent pending,” will be gold when you negotiate licensing agreements.
• Manufacturing Production – Take time to research the production process that your invention will require to bring to market. This information is an important section of your proposal. Also, you may identify potential investors or partners during this research phase. You may also find out this information during your product prototype process.

Note on Product Prototypes
While creating a product prototype can be a powerful persuader to potential investors, it is NOT required to sell your invention. What IS critical is the research on how a product will be manufactured.

Step 2: Prepare Proposal

Now that you’ve gathered all the research information, including market research, focus groups, and production processes, it is time to prepare a professional presentation for companies and investors.

While a product prototype, functioning or not, can be an asset, a professional presentation is the most important factor.

Your product’s features and benefits
There is a distinct difference between a feature and a benefit. A feature is something that is intrinsic about the idea, i.e., that it is blue, made of plastic, or six inches tall.
A benefit is a more important value proposition of what the idea or service gives to the end-user, such as comfort or convenience.

Solution your product provides
This is a critically important point that many people forget. You must discuss the exact problem that your product or service solves which will allow your investors to understand the need for your product to come to market.

Market demographics
Detail the market demographics of your target customer, age, gender, location, lifestyle, buying habits, and hobbies to create a customer persona.

Legal status of your idea
Add details about the current legal status of your product. What patent and trademark searches have been conducted either by yourself or professionals. What were the results of those findings? Do you have a patent-pending or provisional patent?

Write a cover letter to introduce your proposal and yourself and your professional qualifications to investors.

Step 3: Pitch Investors

Now that you’ve done your research and prepared your presentation, you are ready to start contacting prospective buyers. But first, you will need to find them! Here is how to create a list of prospective investors or licensees (buyers of your product invention license rights).

Of course, just like all sales processes, this is a numbers game. The more contacts you put in your database, the more success you are likely to achieve.

How to find prospective licensee companies

• Shop retail stores – If your invention is a consumer product, go to the related marketplace stores and look at similar products. Take note of the manufacturers, distributors, and retailers. All are possible buyers of your business idea.
• Browse online stores – Search online stores and jot down manufacturers and companies that could be a good fit for your invention license.
• Find trade associations – Explore industry trade associations for your product categories and get names and contacts from many firms from one source.
• Attend trade shows –   Visit industry trade shows to meet prospective buyers (and research competitors). If you are unable to travel to trade shows, simply go to the show website and access the list of exhibitors.
• Visit your local library – Most libraries have links to professional databases that will allow you to search industries and obtain lists of companies and executive contacts.
• Online industry databases – Visit top industrial databases such as Hoovers and Thomas Net that list large companies that could be interested in your inventions.
• Manufacturer’s representatives – These are the firms that represent many companies and could be a good source of connections.
• Distributors and brokers – These firms also have connections with many companies that could be your ticket to licensing deals.
• Linked in and social networks – Search social media sites such as LinkedIn for companies. Use keywords related to your product idea.
• Import export firms – These companies work with domestic and international firms that could be a good fit to bring your product idea to market.
• Industry forums – Join online forums related to your industry and look for active posters and profiles of possible business partnerships.