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How to Look Big, Act Big, Get Big

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Businessperson looks for a way to make money ... A fantastic idea. Patents. Do you really need or want one? The answer is not always obvious. ... – PowerPoint PPT presentation

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Title: How to Look Big, Act Big, Get Big


1
How to Look Big, Act Big, Get Big
  • Andy Daniel
  • President, Enginuity LLC

2
Disclaimer
  • Enginuity currently only looks and acts big
  • I dont always follow my own advice

3
Businessperson vs. Inventor
  • Businessperson looks for a way to make money
  • Inventor does something they enjoy and tries to
    make money at it.
  • Do what you enjoy - don't just chase
  • If you're unhappy, you won't have the energy to
    continue

4
Licensing or manufacturing?
  • Licensing is much less risk
  • Unclear which is more profitable
  • Sometimes nobody wants to license
  • Dont ignore manufacturing then licensing

5
Licensing
  • or, "Why are those crooks offering me so little?"

6
License Terms
  • What rights are you licensing?
  • Exclusive / non-exclusive
  • Royalty rate
  • Annual minimum
  • Escape clause

7
Value order
  • A product with a strong sales history
  • A product that is actually being sold
  • A product that it ready to ship
  • A product that is in first production
  • A finished prototype
  • A functional prototype
  • Used dishwater
  • A fantastic idea

8
Patents
  • Do you really need or want one? The answer is
    not always obvious.
  • Patents are quite expensive to obtain legal
    fees, filing fee, issue fee
  • Patents require payment of maintenance fees
  • Patents take about 2 years to issue

9
Patents
  • Many patents are easily circumvented
  • Unless your value is in the brilliant invention
    rather than in its brilliant execution, the
    answer is probably no.
  • However you can use Patent Disclosure, PPA, and
    filing without issue to buy time at comparatively
    low cost

10
Manufacturing
  • Economies of scale are critical
  • Good artwork is no more expensive to print than
    bad artwork
  • Spend money/time up front
  • When shopping for manufacturing, stop thinking
    like a consumer

11
Manufacturing
  • Murphy's law everything that can go wrong, will
    go wrong
  • Andy's law everything will go wrong (at least
    slightly)
  • Check like a hawk at every step
  • Control as much of the process as is worthwhile

12
Home-based manufacturing
  • Often lower quality at higher cost
  • Very difficult to succeed this way (except for
    artists)

13
Product Testing
  • Don't use your friends/relatives - they can't
    give an honest opinion
  • Unless you plan to ship yourself with each copy
    of the product, hand it to the tester and stand
    back - say nothing.
  • When they ask you a question, ask them "what do
    you think?"

14
Packaging
  • Your most critical component
  • That's what people see in the store
  • Hire an artist

15
Typical product costs
  • Customer buys product for 19.95
  • Retailer buys product for 10.00
  • Distributor buys product for 8.50
  • Publisher manufactures product for 5.00
  • Don't forget reps, advertising, etc.
  • You must produce your product for 1/4 to 1/5 of
    what consumers will pay

16
Perceived Value
  • Consumer should feel that they are getting value
    for their money
  • Big consumer likes this, retailer doesn't (takes
    shelf space)
  • Heavy consumer like this, retailer tolerates it
    (higher freight costs)

17
Advertising
  • Does it really work?
  • You need 1000's of ads for an order
  • You need repetition before people will remember
    you (some say 7 times)

18
Advertising
  • The Internet
  • as a source of info, it's the best thing since
    sliced bread
  • The great equalizer - NOT!
  • unless you're Microsoft, it's a "pull" medium
  • Face-to-face selling
  • far and away the most likely for a sale (call
    first!)

19
Find Novel Things to Do
  • Look for novel ways to sell
  • Look for novel things to do
  • Look for free/inexpensive ways to do things better

20
Chain Stores
  • Much tougher to get into than small stores
  • But - convince one (tough) buyer, sell to 100's
    of stores all at once

21
Chain stores
  • Lots of customers
  • Much bigger orders
  • - Usually demand a price break
  • - Not interested in pioneering anything - want
    proven sales
  • - Often demand return privilege and dating

22
Small Stores
  • More willing to try a new product (if not avail
    at K-Mart!)
  • Willing to try "local" product to help fellow
    small business
  • - Usually tiny order
  • Able to steer customers toward your product
  • Can result in a more targeted customer, esp. at
    high end

23
Competing with existing brands
  • Why should the consumer buy yours?
  • Why should retailer carry your product?

24
Learning About Your Industry
  • Every industry has a "way they do things". Try
    and learn it.
  • Your customers will usually want to do them the
    same way.

25
Trade Magazines
  • A great source of information.
  • Very often FREE, otherwise fairly inexpensive.
  • Ads are the most useful part for learning about
    the industry.
  • First issue - read every word.
  • Other issues - skim it.

26
Trade Shows
  • Attending - often free to attend you'll learn
    alot
  • Exhibiting - quite expensive be sure you can
    deliver product/service immediately - buyers are
    not interested in "later"
  • Attend before you choose to exhibit
  • Follow-up is everything

27
Appear Professional
  • Business cards, stationery, 800 numbers
  • Try to appear much larger than you are
  • It helps to appear like a serious player with
    both customers and suppliers, but it's much more
    important with customers

28
Web Sites
  • www.enginuity.com
  • www.aol.com/members/enginuity.htm
  • andy_at_enginuity.com
  • andy123_at_freemail.net
  • need I say more?

29
Your Home Office
  • Separate business and fax lines (not a home line)
  • Fax machine
  • Letterhead
  • Business cards
  • Separate checking account
  • Answering machine in business voice
  • Laser printer

30
Efficiency
  • Develop your systems
  • Try to group your work - it's very inefficient to
    switch tasks constantly
  • Develop your relationships with vendors - once it
    works, it's trouble-free
  • Use your computer to manage tasks

31
Phone calls
  • "Hello, this is John/Mary Smith of Incredibly
    Successful Inc. I'm in the office but don't want
    to speak to you right now. Please leave your
    message at the tone and I won't return your call"

32
Phone Calls
  • Buyers will never call you back
  • Vendors will call you back within 15 seconds
  • if a vendor doesn't return calls promptly, find
    another vendor

33
Long-term success
  • Don't become an individual service provider
  • Theres only 1 of you, and there are only 24
    hours in a day

34
Plan to Succeed
  • Don't leave yourself with 2 losing possibilities
  • example short run of a product that cannot
    be remanufactured

35
Important Lessons
  • You never know what people will like
  • You never know which contact is important

36
In Conclusion
  • Its not for everyone
  • You may or may not succeed
  • Its quite a ride
  • Questions?
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