There are several "tracks" you can take to bring your product to the marketplace.One track is to become an "outsource entrepreneur." In this way, you essentially become a hired gun. You, the inventor, perform the tasks of researching and developing the product. Then, you "outsource" the manufacturing and marketing to partners with money. Those partners will develop, market, and fund the startup costs. In return for their greater efforts, they will receive a greater return. The benefit to you, however, is that this is one of the quickest ways to bring a product to market and exit with cash in hand. If you are a serial inventor, this can be a great way to build up some cash and move on from one idea to the next.
A second track open to you is licensing or selling your patent outright. Very simply, licensing is when another company takes over your new product idea and cuts you in on the sales via royalties. While selling a patent is fairly self explanatory on the surface, you should seek consultation from a lawyer prior to finalizing an agreement to ensure all legal documents are in place. Licensees can be manufacturers, marketers, or basically anyone who wants to carry your product into the market and pay you for the right to do so. Licensing arrangements are also flexible; some licensees take on all the risk, some take on less. However, most companies will only license a product if they are more or less sure it will succeed. Therefore, it is up to you to convince them of your product's prospects.
The disadvantage of licensing is that the earning potential is a bit lower than outsourcing, but the tremendous upside is that once you license a product you basically have no more responsibility to the product.
The other track is the most risky, and thusly the most potentially rewarding: starting your own company. In this case, you assume full responsibility: you make the product, you price the product, you get the product online or on store shelves, you handle the accounting, you pay the taxes, you own the process from start to finish. For more information on the steps involved, including writing a business plan and finding a manufacturer, view our other articles.
This is by far the most difficult process and many people rightfully so decide before hand to opt for sales or licensing agreements. However, if you do decide to move forward and create a business (highest reward and most risk) around your intellectual property you want to ensure that you hire on top talent. Failing to do so can lead to years of problems and ongoing stress. It's far better to invest in something you believe in and share some of the pie to increase your chances of building a successful company than to go it alone and take arrows.
By keeping these 9 steps in mind, you can increase the likelihood of success in bringing your product to market with confidence and profitability.
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