How to Profit and Have Fun By Commercializing Your
Great Product Idea
TechnoBusiness
Solutions, would seriously consider exploring a mutually beneficial
arrangement for developing (if additional modifications to the existing
design were to be found appropriate) and commercializing your new product
as well as other ones which we might jointly develop in the future. We
would contribute as follows:
- 1. We could review your
current product design and propose changes if they will be required.
These modifications would further cost reduce the product and allow
for ease of high quality manufacture. As you know, a high percentage of new
products fail because they can not be mass produced at CONSISTENTLY
high quality and low cost levels.
- 2. We could help you in
the development of product claims for the patent application, patent
search of prior art, etc.
- 3. We could complete a
preliminary technical and business evaluation of the subject idea /
product and offer recommendations for its most effective
exploitation in the market place.
- 4. We could prepare all
the appropriate documentation, generate the required data and be
responsible for obtaining FDA approval for this product, if
applicable.
- 5. We could raise the
necessary funds through various sources for the complete
development, manufacture and commercialization of this product (if
we were to pursue such an approach.)
- 6. We could be
responsible for the design, development and building the
manufacturing process which would be required for this product.
- 7. We could develop and
implement the various engineering, manufacturing, marketing and
sales/promotion strategies for the effective market penetration of
this product.
- 8. We could sell these
proprietary technology and businesses, if desirable, to interested
parties through our established network.
Note:
The above
statements relate ONLY to proprietary knowledge, expertise and other
personal contributions which TechnoBusiness Solutions is prepared to make
towards this new business entity.
Any and all out of
pocket, incurred expenses would be provided to TechnoBusiness Solutions
from the funds which would be generated through Fund Raising.
If you think that
these terms are acceptable to your company, please let us know and we
will consider taking the next steps for making this dream a reality. In
our opinion they should be:
- Execute a secrecy
agreement. Feel free to download such an agreement from
here.Then,
you just fill-in the blanks with your name, area of invention, sign
and fax it back to us. Upon its receipt, we will sign it and re-fax
it to you for your records.
- You will provide us
with a package of information concerning the product so we could
evaluate its merit.
- We will review the
received information and inform you of our interest to get involved
in about two to four weeks from its receipt.
- Develop and sign-off a
document which would describe our responsibilities, business
ownership, etc, etc.
- Meet face to face in
order to make sure we are going to be compatible in this venture.
What to do if you would like to contact us
Please
cut and paste the following questions into your email program; and email
us your responses to each question, to the best of your abilities.
We think it would
be useful if you could provide us with the following information for each
of the products that you would like us to assess its merit (if you do not
have any information for a specific section, please state so.)
1. Which Unmet
needs is the product going to satisfy? Why should a customer buy this
product and not that of competition (if it exists)?
2. Is there
sufficient data to substantiate that these are truly Unmet needs for the
customer?
3. Are there any
barriers to entry for the new product, i.e. utility or design patents;
trademarks, etc, etc.? If not, how easy it might be for someone to
reverse engineer and copy the new product?
Note: Please
provide us with copies of any patents you might have.
4. Which product
features will satisfy these unmet needs? How?
5. What product
claims will be made? Can these claims be substantiated through scientific
and other compelling evidence?
6. Are design
criteria established for the product?
7. Have preliminary
product, component and packaging specifications been developed?
8. What type of
testing will be done in order to evaluate the soundness of the product
design?
9. How long should
the product be expected to last?
10. Does the new
product have sales potential in the targeted market? If so, provide
numbers, etc.
11. Who is the
competition?
12. How can they
affect the new product's sales?
13. What are the
most effective channels of distribution?
14. What are the
prices of own and competitive, similar products? What is the expect net
profit (after taxes) per each product sold?
15. Which are the
major factors that influence potential users? Price, quality, brand name,
service, etc.?
16. What is the
best way to gain exposure in this market?
17. Are there any
drawbacks to selling in this market?
18. Who are the
best potential buyers and representatives for the new product?
19. Are there any
potential licensing or joint venture partners in this market?
20. Do you have the
required experience, know-how and resources for effectively marketing
/selling and distributing the new product?
21. What level of
funding do you need? Do you have a business / marketing plan which could
justify how these funds would be allocated?
22. Why would a
potential investor be willing to fund your new product efforts? What
should he /she expect in return?
23. What are your
underlined assumptions concerning the viability of this business?
24. What are your
"What if" scenario concerning your projected estimates for
market size, penetration potential, profit margin, etc.?
Finally, please
provide us with this information:
a. A summary of
your technical and / or business qualifications and that of others who
might be involved in your company on a full time basis.
b. How long have
been in business?
c. Do you expect to
engage us on a consulting basis or as a potential joint owner of these
new businesses? What are your short and long term goals?
Upon receipt of
this information, we will review it and contact you shortly.
You have a great idea. So what? Why should I and the
rest of the world care? What's in it for me?
Almost
all of us have had "great" ideas. But how few of those ideas
and dreams ever did become a marketable, profitable product?
Unfortunately very, very few.
We will try to give
you here some priceless information concerning what is involved, hidden
traps to avoid, how to best utilize your own and other resources as well
as some tips for transforming your bright idea into a profitable, useful
product.
If you think you have a GREAT idea, then think again
...
Your
idea could be worth something if it were to satisfy ALL of the following
criteria:
- It would satisfy an
Unmet need (Unmet need is a customer or user need that currently no
product or group of products are able to satisfy adequately.)
- The customer is
prepared to pay such a price for the new product so that the
inventor, manufacturer and marketeer, all could make and sell it at
a reasonable profit.
- There is a sufficient
market potential for your new product.
- There are no emerging
environmental, regulatory and other governmental trends which could
eliminate the need for your product if they were to be instituted.
For example, it did not make any sense to develop and plan on
marketing a less expensive fluorocarbon (similar to freon) chemical when
the world body had already agree to ban the commercial use of all ozone
depleting chemicals.
- There are sufficient
barriers to entry for competition, therefore the product has
adequate means of protection. Ideally, the new idea should have a
broad utility patent with a unique trademark.
- The new product lends
itself to a design based on sound engineering principles and can be
manufactured at high quality, volume levels.
- Feasibility of the new
product has been completed successfully. A number of working
prototype products has been made and tested rigorously. In addition,
focus groups and other user feedback systems have confirmed the need
for this new product in the market place.
- A business plan has
been established by experienced professionals or experts.
- There is a sound
strategy for the generation of the required funds to develop the new
product.
- When you find it
necessary to hire an expert - and that will happen quite often -
make sure you pay him / her not by the hour, day but ONLY if and
when you receive your specified deliverables. In our experience,
doing otherwise would invite trouble, trouble, trouble.
What steps should an inventor follow to avoid costly
traps and improve his batting average.
- Step 1. Record your idea in as
much detail as possible into a bound notebook (A bound notebook is
one that has number pages, sewed together with thread.)
Have your invention witnessed and dated by preferably two (2)
non-related individuals. You also should complete and file a Provisional
Patent Application (PPA) with the patent office.
The PPA is used to make an absolute record of your invention and
is valid for one year. However, you have to include all the particulars
of the invention, otherwise you will not be able to rely on it.
Subsequently, you have to file a regular patent application and any other
foreign filing.
Document your invention by recording the significant user needs,
features and benefits of your product.
- Step 2. Do not show anyone
your new idea unless they sign a secrecy / non-disclosure agreement.
- Step 3. Do a thorough patent
search by yourself, if you have such experience or hire a
professional patent search firm for about $200 to $300.
Now is a good time to start developing various models, refining
them, getting feedback from users, fabricating parts, testing for
"what if" design scenarios, experimenting, etc.
- Step 4. Complete a technical
and business assessment in order to evaluate and document the merit
of your idea. If you are not capable of doing an objective
evaluation, then hire a professional expert for about $5K to $10K.
The technical assessment should evaluate the
following:
Which Unmet needs is the product going to satisfy?
Is there sufficient data to substantiate that these are truly
Unmet needs for the customer?
Which product features will satisfy these unmet needs?
How?
What product claims will be made?
Are design criteria established for the product?
Have preliminary product, component and packaging specifications
been developed?
What type of testing will be done in order to evaluate the soundness
of the product design?
How long should the product be expected to last?
Be especially careful if the new product will utilize any
unproven technology. It would be better for you if that technology got
tested with somebody else's money.
The business assessment should address questions like
these:
Does my product have sales potential in the targeted
market?
Who are my competitors?
How can they affect my sales?
What are the most effective channels of distribution?
What are the prices of competitive, similar products?
Which are the major factors that influence potential users?
Price, quality, brand name, service, etc.?
What is the best way to gain exposure in this market?
Are there any drawbacks to selling in this market?
Who are the best potential buyers and representatives for my
product?
Are there any potential licensing or joint venture partners in
this market?
- Step 5. If everything looks
O.K. so far, then hire a reputable patent firm that has experience
with the filing of inventions similar to yours so it could draft and
submit your patent application. Costs could be around $30K,
especially if you are going to seek domestic and foreign patent
protection.
It might take one to two years for you to be awarded a patent.
So be patient, work closely with your patent attorney and use this time
to complete other important activities of the project such as fund
raising (step 6.)
As you can see, we do not recommend that you spend any money
unless the technical and business merit of your new product can be
established. Statistics show, that a majority of awarded patents never
become commercialized, successful products because they lack either
technical and / or business merit. This step alone, could save you
thousand of dollars and precious time.
- Step 6. It is now time to
develop a prospectus for raising the required funds for
building prototype parts, ordering soft tooling, test equipment,
etc.
The prospectus is essentially a well written business plan.
Unless you are proficient at this activity, you should definitely hire
someone to do it. A poorly written plan would generate for you absolutely
no money. So make sure your business plan has a powerful punch in
attracting potential investors.
We list here the essential elements of a prospectus for an
initial public offering (IPO.) So if your company has not yet reached
that stage, just develop the necessary data per the level of your
business.
Executive Summary
Risk Factors
Early Stage of Development and Commercialization;Limited
Relevant Operating History | Limited Revenues; History of Losses
Anticipated Future Losses | Reliance on Development of New
Products and Obtaining Regulatory Clearances to Market Existing Products
in the primary country market | Government Regulation
Product Approvals Uncertain | Market Acceptance Uncertain | No
Assurance of Clinical Advantages (if it is a medical, pharmaceutical
product) | Patient Population Estimates Uncertain (if required) |
Reliance on International Sales | Limited Sales and Marketing
Capability
Dependence on Distributors | Highly Competitive Markets ( this
is true for almost all businesses today) | Risk of Technological
Obsolescence | Dependence on Patents and Proprietary Technology | Ongoing
Royalty Obligation (if it is applicable) | Limited Manufacturing
Experience | Dependence on Management and Other Key Personnel | Product
Liability Risk
Insurance (if it is applicable) | Uncertainty of Government
Health Care Policy and Third-Party Reimbursement (if applicable) |
Control by Officers, directors and Principal Stockholders | Future
Additional Capital Requirements
No Assurance Future Capital Will Be Available | Shares Eligible
for Future Sale | No Prior Public Market for Common Stock
Potential Volatility of Stock Price | Absence of Dividends
Dilution (if this is the case) | Possible Issuances of Preferred
Stock
Anti-Takeover Effect of Certain Bylaw and Statutory
Provisions
Use of Proceeds
Dividend Policy
Capitalization
Dilution
Selected Consolidated Financial Data
Management Discussion and Analysis of Financial Condition and
Results of Operations
Overview, Results of Operations, Liquidity and Capital
Resources
Business
Overview, Strategy, Technology, Products, Distribution, Sales
and Marketing, Patents and Proprietary Rights, Competition,
Manufacturing, Government Regulation, Third-Party Reimbursement,
Employees, Legal Proceedings, Product Liability and Insurance,
Facilities
Management
Directors, Executive Officers and Senior Management, Board of
Directors, Executive Compensation, Compensation Committee Interlocks and
Insider Participation, Stock option Plans
Important Company Transactions
Principal Stockholders
Description of Capital Stock
Common Stock, Undesignated Preferred Stock, State Law and
Certain Provisions of the Bylaws, Limitations on Liability of Officers
and Directors, Shares Eligible for Future Public Sale, Transfer
Agent
Underwriting
Legal Matters
Experts
Accounting Firm
Additional Information
Index to Consolidated Financial Statements
Report of Independent Accountants
Consolidated Balance Sheets of Company
Consolidated Statements of Operations
Consolidated Statements of Stockholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
The prospectus should be written having in mind the type of
individuals to which is going to be presented. A strategy also has to be
developed for reaching the desired group of potential investors. Again,
unless you know what you are doing, you should hire someone expert to do
this for you.
- Step 7. If you are going to
team-up with one or more individuals in order to develop and run the
business make sure that everyone involved satisfies the following
criteria:
7.1 There is a clear and concise definition of business
ownership, responsibilities, rewards, etc.
7.2 There is complete agreement on the business' mission,
strategies, policies, culture and process (implementation
activities.)
7.3 There is no overlap or dual responsibility for the same area
or territory. A ship with two captains is doomed to sink in the
ocean.
7.4 There is compatibility of moral character and overall
personality of the team members.
7.5 There is a willingness to be reasonably flexible in adapting
and implementing ideas which might be different from his/her own. People
should be open-minded concerning alternative solutions and prepared to be
convinced by compelling evidence and sound reasoning, logic.
7.6 There is a willingness to relocate if that were to be a
prudent and wise business decision.
7.8 There is a commitment to share in decision making and view
positively a partner's constructive comments.
7.9 Not to get involved in areas or things where he or she might
clearly lack the ability to perform.
7.10 Be prepared to wear many hats and see how it feels to wear
someone else's shoes.
Once
the required funds have been raised, you are ready for Product
Development.
Note: Any mailed materials to us
will not be returned unless you a) clearly specify so and b) provide us
with sufficient funds via a money order to cover the shipping and
handling expenses.
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