As I know this is a rather lengthy article, I began trying to cut it down to spare my readers from utter boredom! However, there is a lot of good information listed here, and I feel it is important you have as much information in one shot, especially with these topics. In this article we will be discussing: 1. How to bring inventions and business ideas to the marketplace; 2. Filing for patents; and 3. Pricing your products and inventions for the marketplace.
Let’s get started!
As I started to write this article, I had a flashback… Back to the past, when when I first started working in the web design business, many years ago. Little did I know what a life-altering experience it would be for me, and how it would completely reshape my own business future. During the early ’90s, when the Internet was still in its infancy, we (meaning myself, my then-soon-to-be-husband, and our core group of geeks and crazies) were making websites! Big, funny looking, creative, clunky-yet-exciting, fun, and promising websites that were… by today’s standards… pretty scary looking! Big giant text boxes, giant buttons, images and tons of text links filled the 15″ barely color screen. There were no mentors to look to or gurus to listen to. It was the western frontier! I remember when we all learned how to make this cutting-edge creation known as “the an animated.GIF!” Long before the days of Flash integration or a slew of other technologies, we had parted the Red Sea! The Internet was the wave of the future and the future had arrived!
Back in the day, people from all walks of life would line up in droves at our Internet provider location – our “ISP” – with some of the craziest ideas and “inventions” I had ever seen in my life. When a customer wanted a website built, I would excitedly ask them, “do you have a sketch or idea of what you would like designed?” Proudly, out would come the infamous wrinkled napkin from the previous day’s lunch, filled with crazy doodles, drawings and food stains. THAT was their business plan – their blueprint as it were. They say necessity is the mother of invention and I knew this “napkin thing” wasn’t gonna work for long. Alas, I was introduced to this new “great new program” new to the marketplace, back in the day. Something called Quark Xpress was all the rave! You could draw cool lines and squares and make flow charts and even create newsletters! Wow. How exciting it was. The rest was history for our group; creating layouts and websites, and teaching people the finer points of business creation and management suddenly became a snap. Computer technology was amazing!
Those were fun days in simpler times. But, the Internet has changed dramatically since then, and creating anything has changed form dramatically. Today, when someone has an idea for an invention or a business, there is far more at stake than in yesteryear. Gone are the days of handshake deals, where your word was your merit badge of honor. Unfortunately, this is a day of theft, fraud and striving to protect what you’ve worked so hard to accomplish. With that said, let’s talk about how you as an entrepreneur can protect your inventions, your ideas and your business, and bring them to the marketplace.
1. Bringing Your Inventions and Business Ideas to the Marketplace: First you must define a few things:
- You must define your product: What is it? Is it a product or a service? Do you know the difference? That may sound silly, but you’d be surprised at how the overlap.
- You must define your business model: What are you selling? Goods? Services? Both?
- You must define your market: Who is your target audience or purchasing demographic?
- You must define your market longevity: Will this product remain popular within a year? Five year? Twenty years? It is a passing fancy? Does it have potential to grow into something prosperous? Does it have the potential to go mass market?
- You must definite your competition: How long have they been around? What makes them better or worse than you? Be honest with yourself in your assessment.
Then address these questions and issues:
- Understanding your own product/service: If my mother can’t understand it, will the product or service actually sell? Don’t laugh at this concept! You must think about who the has spending dollars in your target market. What is their education level? What is their technology level? What are their needs?
- Refining and streamlining what you have: You have to work out all the kinks… and there are always kinks! What can I do to refine, simplify or streamline my invention or product?
- Protect Protect Protect! Do you have help protecting your assets? (In legal-eze it’s referred to as the C.Y.A. method or “Cover Your Assets” method. LOL: ) Do you have an attorney or legal service who can assist you?
- Get a Marketing Plan, Man! Am I prepared to conduct market research? Do I have a marketing plan in place? Do I need to learn about marketing first? Do I know the current trends? Do I have someone I can hire to help me?
2. Filing Copyrights, Trademarks and Patents: How does a trademark differ from a copyright or patent? Many people are confused over the differences, which is very understandable because it’s confusing! In short, a copyright protects original works of expression such as novels and books, graphic and/or fine art, music, photography, software, video, cinema, choreography, and a whole bunch of other works. The copyright does prevent others from copying, stealing or commercially exploiting the artist or creator’s work. But, copyright doesn’t necessarily protect everything. For example: titles, names, phrases, even aspects of art may not be covered, depending on the nature of the work and what it involves. This is where a trademark comes in to play. A trademark protects distinctive, what I’ll coin, “commercial-esque” creations such as names, phrases, specially used words, logos, symbols, slogans, or any anything used to identify and distinguish products or services in the marketplace. Make a mental note that U.S. protections are different than global protections and involve even greater detail on a worldwide stage.
Now, there are many cases where a copyright and a trademark will be used together to protect different aspects of a particular product. For example, a copyright will protect the artistic creation of a graphic or logo, used to identify a particular business or company, while the trademark serves to stop others from illegally using it in the marketplace (illegally, meaning without the express permission of the company or creators). This approach is commonly used by advertising agencies and creatives. So in short, copyright helps identify and lock in the expression and the brand, the trademark serves to protect it by blocking others from infringing on it. Phew! Hope that explains it, in a nutshell!
The Difference Between a Trademark and a Patent: Here’s a whole other kettle of fish to think about. Patents protect specific inventions. For example, Joe invents a new type of socket wrench that is amazing, incredibly easy to use, and can remove any old socket head from any socket. Joe is going to be a happy camper with this invention. Not only can he block others from making, selling, or using his fabulous socket wrench invention, but he may also be able to obtain monopoly rights, preventing others from making commercial use of his invention, and that patent may last for 15 or 20 years.
Generally, patents and trademarks don’t overlap exactly the same way as copyrights and trademarks do. Patents are a slightly different animal with their own set of issues and conditions. When it comes to a unique product design or invention, you are protecting a “thing” versus a “design,” which has other legal ramifications such as functionality, style, materials used, etc.
Hiring a Patent Attorney or Patent Service: If you have invented a product, I highly recommend you find a good patent attorney. There are specialists in the field that know exactly how it all works, and what exactly is involved. There are also many online services available. My service of choice for these important necessities is LegalZoom (LegalZoom.com). I’ve used them before and I am very pleased with their service and performance. They are cost effective and I found them incredibly easy to deal with. There are all kinds of services available, either online, or you can even consult your local yellow pages directory, if you wish to seek someone local and in person. You may also go directly to the U.S. government websites for details, but I don’t recommend going directly because it is very complicated and confusing. If you do one tiny thing wrong, you have to start over from the beginning, which isn’t fun. When it comes to your creations, don’t skimp on what is important to you. You’ve worked too hard to get there, so make sure to protect your work properly. You’ll be very glad you did!
3. Properly Pricing Your Invention or Services for the Market: There isn’t enough room in this article to fully address the details that go into pricing goods for the marketplace. It is, however, very challenging for anyone in business. Setting the magic price on something can prove to be a bit overwhelming. Whether you’re setting prices for the first time, raising or lowering existing prices, or trying to keep up with varying economic trends, it can be difficult. Overprice your products or services and you risk losing business to competitors. Underprice it and you may drastically hurt your bottom line. What to do? I’ll try to give it to you in a nutshell:
You can’t base everything off of price alone, especially services: Yes, there is the competition. And yes, you need to keep prices lower in challenging economic times. However, “cheapest” rarely means “best.” I have come to find you usually get what you pay for. In many cases, rock bottom prices usually means rock bottom service. For example, my local auto mechanic is an awesome guy. He is not the cheapest or the most expensive mechanic in our local area. What he is, is fabulous. He’s local, he’s fair, he’s reliable, and he’s available. If I need help with my car, he shows me everything he’s doing. He uses the best parts and his entire staff takes great pride in their work. I never have to second-guess anything and that matters a lot to me.
Now, let’s address purchasing vs. selling products: Pricing services and products are very different. Why? Because, using my mechanic as the example, he is not a reproduced “thing.” He’s not a razor blade, or a 9-volt battery, or a package of paper towels. I can purchase those things anywhere at a super discounted rate, in bulk. With those everyday products such as batteries, razor blades, food, clothing, cleaning products, etc., I am going to price match and look for the best bargains for my household. After all, Windex window washing liquid is pretty much the same product anywhere it’s purchased. It’s a pre-fab “thing” being purchased; not a person. With that in mind, you have to price products for a bigger market.
Your bottom business dollar for pricing products: In order to set a good product price, you will need to do the homework on your manufacturing or development costs. What is your product (or products)? Are you the manufacturer of your product(s)? What does it cost to produce it? Can you afford to offer price matching? Will you offer wholesale pricing to distributors? What is your overhead? How much do you need to net out per item? There are countless programs such as QuickBooks and other software applications to assist you. If that isn’t an option for you, don’t be afraid to consult your financial advisor or your CPA to help you do the math. You may be surprised at how quickly you will find that right price with a little guidance. That person can help diffuse the fear out of the situation.
Don’t sacrifice quality if at all possible: This can be tough during inflationary times for many companies. If you produce a food or beverage product that uses, well say, sugar or flour, and those costs have risen dramatically, that affects your expenses and your earnings. But here is the hook: Switch that ingredient to something inferior and your customers will know it. Certain things cannot be faked, so beware of quality cutting. That can be a real killer.
Don’t be afraid to offer discounts and coupons, but do so intelligently: I will use the example of a popular restaurant, especially out here in California, T.G.I.Fridays. Whether you personally like this restaurant or not, I consider this to be a role-model company, to be watched and admired, at least from a business and marketing perspective. Restaurants are definitely a service business, but they also happen to product seller. In fact, restaurants in general, are one of the few business models that are both services and product providers.
So back to our T.G I. Friday’s example…. This restaurant has bent over backwards to help all kinds of communities that are struggling with a difficult economy (as of this writing). They have more discounts and bargains than just about any company I’ve ever seen. They have their “2 for $20” deal, which is a full meal-for-two with all the trimmings, including appetizer and dessert; they offer boat loads of “buy-one-get-one-free” deals; they offer a fantastic discounted Happy Hour, and the food is pretty darned good quality for what it is. It is not a five-star resort experience, but is a successful mainstream marketplace. The Friday’s restaurants. out here in Southern California anyway, are almost always stand-room-only, even during tough economic times. This company knows its market, its current and future market, its product line, and its bottom line. They know how to drive in the traffic, offer the good deals, provide an appetizing menu, and they do it right. There are plenty of large food chains floating around out there, who would never follow this philosophy, and their restaurants are dying on the vine (again, as of this writing).
There is an art, a science and a balance to building a successful business. Get too greedy and you will fail. Become too giving and you give the store away. Become complacent or cut too many corners and your sales will be drab. For those of us who love the art of the deal – the excellence of business creation – it’s an ongoing journey to strive for that perfect hit – that perfect home run.
Stay tuned for our last article of this series where we will discuss: raising capital, buying a franchise, and then briefly recapping all the topics from this article series.