One of the toughest questions faced by inventors is whether they should sell their products themselves or license them. While there is no easy answer to this question, the decision involves having adequate knowledge and the drive to see the project through to the end. Making an informed decision means understanding both options.
Licensing is an agreement where the inventor allows someone to commercially market their products in exchange for royalties or a one-time payment. The decreased amount of business risk is one reason an inventor may want to consider licensing.
Many people think that they will be able to call a large corporation, pitch their ideas and they will get a lucrative licensing deal. This rarely happens. Corporations do not license the majority of the products they see. The reasons for this include budget limitations and internal politics. So, what makes those inventors that do manage to get a licensing agreement successful?
First of all, the successful people understand the process and how to do it. They realize that their product must stand out and be able to be patented. It must also sell at a price that is attractive to consumers and the corporation. They understand what the licensee needs and how to create a presentation that is geared toward the companies they are propositioning. They also understand that they may experience rejection before getting a licensing deal.
Selling Your Invention Yourself
This is a good idea for the inventor that is also interested in becoming an entrepreneur. However, it is a difficult route to take. It requires investing more personal time along with a substantial financial commitment. About half of the investors who decide to sell their own invention are successful. This may be attributed to being incredibly driven and committed to seeing the business grow. While realizing this dream may be difficult, there is a tremendous sense of accomplishment when the ideas are successful. To find out how to be better prepared to own your own business, visit LLC.NET.
So, which route is the right one?
That answer is determined by how much risk a person wants to endure and the amount of time a person is willing to invest. If owning a business is not appealing, consider licensing. Anyone who wants to own their own business, knows how to get their invention manufactured and into retail stores, should sell their own products.
Regardless of whether an inventor decides to sell their products themselves or seek a licensing agreement, patience is important. It could take years for the dream to become a reality. Being familiar with the process and taking the appropriate steps can help someone achieve success.
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