How to Successfully License a New Product or Invention

Most inventors dream of licensing their new product, but to many of them, that licensing deal remains elusive. Why is that? Well, licensing is hard, especially when you don’t understand what motivates companies to license products.

When a company licenses a product, they buy a certain amount of rights to your product (as determined in your licensing agreement) in exchange for royalty payments. They handle all of the manufacturing and sales of your product. You need a patent to license a product since licensees are in fact licensing the intellectual property rights of your product and without a patent, you have no intellectual property rights. To fully convince a company to license your product, you may need prototypes, market research or even actual sales results.

There are many reasons why companies license products, but the three main reasons are to stay competitive, to break into new markets or complete their product line.

Staying Competitive

In order to stay competitive, companies need to continually innovate. Innovating is expensive though, and not all companies have the funds for a great research and development department. For these companies, licensing becomes the only economical option to keep on innovating and not falling behind the competition.

So how do you find a company looking to license products to stay competitive? Marketing-leading companies aren’t nearly as likely to license a product from you. You should look for companies that are trying to keep up with, catch or even overcome the market leaders. Licensed product sales are not as profitable as sales for products developed within the company (because of royalty payments), so licensing needs to offer additional benefits other than just producing sales to make a licensing agreement very appealing for a company. So the company that would benefit most from your idea is the company most likely to license it.

You should be able to determine which companies would benefit most by licensing your product by looking at market shares, reading industry news and by looking at new product releases. Look for up-and-coming companies, or companies struggling to keep their market share.

Breaking into New Markets

When a company is looking to use licensing to break into new markets, they often look for a product related to their other products but in a slightly different market. For instance, a company that sells sporting goods to consumers may want to license a new safety product that schools and youth sport leagues would really want. They don’t sell to that market now, but by having a hot product that schools and youth sport leagues want, they could probably sell their other equipment to them too. Most distributors and retailers only buy from a few vendors so when a company licenses a hot new product for a new market, retailers and distributors will pick up that vendor, probably drop another one, and start buying either most or all of the new vendor’s product line.

If your product is only slightly better than the competition, it won’t be considered a hot new product. Your product will be a good licensing candidate for breaking into new markets if people see your product and say, “Wow!”

It is not always easy to know which companies are looking to break into new markets. You can sometimes tell when a company is trying to break into a new market by looking at what products it is introducing. If those products are related to the market they are currently in, but are really geared for a slightly different market, they are probably looking to get into that market. In other cases, a company may just be thinking and investigating. This is where it really helps to have contacts at different companies or industry insiders. Attend trade shows and industry meetings. Get to know people and start asking questions.

Completing a Product Line

Since most distributors and retailers only like to buy from a few vendors, one of the most important considerations for choosing a new vendor is the completeness of its product line. For instance, a chain of grocery stores decides to carry some basic household items. If one vendor has better products, but not all the products they want to carry, they will probably go with a vendor who has all the products they want, even if they think their products aren’t as good. So for vendors (either to distributors or retailers), having a complete product line is a must. But developing new products is expensive and most companies don’t feel like it is worthwhile to develop complimentary products, so they instead look to license them.

When looking to license a product to complete a product line, just look at companies selling to your target market. Are their holes in their product line? If so, does your product fill one of those holes? If they already have a similar product, you will be hard pressed to convince them to license yours. Companies make less money when they license products, so they prefer to stick with their own if they already have them. Your product will really need to be leaps and bounds ahead of their product for them to drop theirs and start selling yours.

How to Find Good Companies for Licensing

To find good potential companies for licensing, you will need to read trade magazines, go to trade shows, attend association and industry meetings and join industry associations. When you attend meeting and trade shows, talk to as many people as you can. At trade shows, good times to talk with people are lull times, early and late in the day and at the hotel restaurant or bar in the evenings. People will be more open to talking during these times since they won’t be so busy. Sales reps are also good contacts since they will know which companies need one of the three benefits listed above.

You need to have a good idea of the industry to know which companies would benefit most from your idea. Also, making all these contacts will help you know who are the right people to contact in each company.

Who to Approach in Companies About Licensing

Marketing and sales people are always the best starting point when approaching a company about licensing. They care the most about having a new product for market excitement, having a full product line and getting more market penetrations. R & D and new business development people often look at licensed products as competition for their own ideas. Concentrate on turning a regional or national sales manager or a marketing person into an advocate for your product and you will raise your chances of licensing the product.

Is Licensing Right for You?

When licensing your product, you will make less per sale than selling it yourself, but in some cases licensing will greatly increase your sales. The licensee will sell the product under its own name, greatly increasing credibility if the licensee is an established market player. These increased volumes can cause you to make more money in the long run. Licensing is usually better for products with a limited shelf life because the licensee will allow you to quickly move into the market. If you have a product that will be hot today, but old news tomorrow, you may miss your window of opportunity if you try to introduce the product yourself. But if you are looking to start a company and introduce other products yourself, you may want to try to sell the product yourself, establishing your brand and allowing you to introduce other products under that same brand. Even if you aren’t looking to start a company, licensing might not work out for you. But there are other options, like Private Label agreements, that will allow you to use another company’s market presence and recognition to increase your sales and allow you to not worry about the marketing of your product.

Staying Present When Things Are Going Well

It might not seem like such a big deal–staying present when things are going well. I mean, easy, right? Maybe and maybe not.

“The tension was mounting on the teebox at the par-5 eighth hole at Conway Farms,” reported on Sept. 14, just before Jim Furyk became the sixth player in PGA Tour history to break 60. [The 8th was his 17th hole that day].

As a budding golfer married to one who’s been playing his entire life, I often see glimpses of exceptional play, but the magnitude of Mr. Furyk’s score of 59 for 18 holes was very rare and earned him membership in an exclusive club formed in 1977, when Al Geiberger became the first to shoot 59 on the PGA Tour.

Staying Present

The technical ability necessary to achieve such a score is high, but what struck me most was the focus and presence of mind required to manage the pressure Mr. Furyk must have felt as he made his way toward one of golf’s most elusive goals.

If you know my work in the world, you know I help people regain power under pressure. Usually, we’re looking at situations where things are going badly: conflict, stress, and relationship struggles with employees, partners, and family members. But what about when things are going well–I mean really well? Might it be even more challenging to stay in the moment when we are courting the possibility of perfection?

As a rank beginner, I’m just trying to keep the ball in the air. But experienced golfers often speak of how hard it is to keep it going when they’re playing at their best. The better the round goes, the more the prospect of “the choke” threatens. Suddenly you’re not thinking about the shot you’re playing but of what could go wrong. The better things get, the harder it is to stay focused.

Other sports have similar elusive goals and clutch moments. In baseball everyone, including the fans, feels the tension mounting, inning by inning and out by out, as their pitcher strives for the no-hitter or–even more rare–the perfect game.

When Life Is Good

What about when life is going well? Do you have difficulty enjoying the flow state, knowing that, inevitably, things will change? Are there moments when you find yourself waiting for what might go wrong? I’ve written about the challenges of being “publicly happy.” Maybe one reason is that we fear we might choke and ruin it all by talking about it.

Mr. Furyk said that to stay present that day “was a mental battle and a mental grind.” To take the pressure off, he talked with fellow golfer Gary Woodland, who joked about football. Laughter and the easy banter lightened the moment, and Furyk was able to stay loose and remain focused.

Can we apply the same technique to life–not take things so seriously, but rather be aware and grateful for what’s happening now? When conflict and problems arise, and they will, they invite us to appreciate even more the days when energy flows freely.

Don’t think about the next shot. Stay present to this one. Live, laugh, and let yourself be here now, in this ki moment. It’s the only one you really have.

Presentation Skills Training: 5 Secrets For Fearless Presenting

Being able to present to a small or large group, speaking in public, and standing in the spotlight can bring even the bravest leader to his or her knees. Public speaking is the number 1 fear of most business professionals. Discover 5 easy secrets to move from fear to fearless.

In today’s fast-paced environment, comfort and confidence in business presenting is a must. You must be able to present effectively to a group-whether it is a group of peers, your superiors, or important clients.

But what if presenting makes you feel nauseous, queasy or having the overwhelming urge to run out of the room? If you are experiencing symptoms of presentation anxiety, there is hope. Use these quick and easy secrets to escape the jitters and shine in any spotlight.

As you can see from the 5 secrets, it’s time to make friends with the entire process and practice of presenting. Let’s jump into each of these 5 powerful secrets.

Secret 1. Training Is Your Friend
Many professionals not only dread presenting, they also avoid presentation skills training. This is strange and faulty logic. When you take a professional training seminar, you’ll get valuable insights. You’ll learn step-by-step processes that make presenting in public much easier to do well-and to do without fear.

Secret 2. Technology Is Your Friend
With radical advances in technology, it’s time to ‘make friends.’ If you’ve been resisting presenting because you feel technophobic, all that’s about to change.

Technology has gotten much, much simpler. For example, it’s easier these days to add colorful graphics to your PowerPoint slides. Just click on the SmartArt icon and find the graphic that’s right for you.

If you truly can’t relate to high-tech presentations, then go low-tech. Use a whiteboard to sketch while your audience watches. As this is not used as frequently as slides, you’ll show up as creative and innovative.

Secret 3. Presenting Is Your Friend
As presentation experts advise: “you can do more for your career in a 5-minute presentation than you can achieve in 5-years at your desk.” Face-to-face presentations get you noticed by the top brass. Presenting well in front of your boss or senior leadership puts you on the fast-track.

Secret 4. Coaching Is Your Friend
If you’re in luck, your company provides targeted presentation skills training. But if you are caught in a downturn and budgets are tight, take matters into your own hands. Get personal coaching and you’ll get the focused attention you deserve.

More and more professionals are opting for personal coaching delivered virtually because it is convenient, affordable and customized to what you need most. This is hard to achieve in a traditional classroom with 12-40 participants.

Secret 5. Rehearsing Is Your Friend
This important secret could be the most important. Rehearsing. Practicing. Practice your script. Rehearse what you say. Rehearse how you move. Practice overcoming objections. Practice responding to questions. Practice to make the most of the technology. Practice personal strategies to present with total confidence.

Break out each part of presenting so that you can improve your skills. The more you practice-and get real-time feedback from a professional coach, the faster you’ll improve.

When you look at these 5 secrets, it’s easy to see that fearless presenting is a skill that is completely learnable. And yes, you can learn how to present your way to the top of your career.