The world is filled with brilliant million dollar ideas but unfortunately, the world lacks seasoned entrepreneurs. Every now and then, I hear sales pitches from aspiring entrepreneurs about the wonderful business ideas they have developed in their closet. No matter how exciting their ideas sound; I try to point it to them that starting a business takes more than an idea.
In this article, I will be revealing the step by step strategy to selling your ideas to companies and investors. Are you creative? Do you have a million dollar idea up your sleeves? Do you have an invention, a patent or intellectual property worth millions of dollars but you don’t know how to go about selling it? Then read on because I will be teaching you how to sell your ideas to companies and investors.
But before I go into explaining the process of selling your ideas to investors, you might want to know why it’s advisable to sell your idea; rather than build a business around it?
Why you should sell your business ideas to companies and investors
1. Building a business around your ideas is a process that’s quite challenging; considering the risk involved. You can sell your ideas to investors to avoid the risk of starting a business.
2. Developing and marketing your idea requires capital. You can opt to sell your ideas to companies to avoid the hassles of raising capital.
3. You can sell your ideas to companies and investors if you lack the entrepreneurial skills and competence to build a business.
4. You can sell your ideas to investors if instant gratification is your goal.
5. You even build a business around idea generation. All you have to do is to start a research firm; stay in touch with trends and customers, and develop an eye to spot business opportunities. Once these three keys are in place; you can build a successful business around selling business ideas to companies and investors.
Having highlighted five reasons why you should consider selling your ideas to companies and investors, below are the exact steps to selling your business ideas to companies and investors.
How to Sell your Ideas to Companies and Investors without stress
1. Find an attorney
The first step to selling your idea to companies and investors is to get an attorney that specializes in contract laws and intellectual property. This is very important if you want to go through the process of selling your ideas without burning your fingers. Your attorney will come in handy when you are negotiating a deal; and will also help you scrutinize the term sheet and agreement to be sure you are on the safe side.
2. Protect your idea
The next step to take before even presenting your ideas to your close friends and family is to protect your idea by making sure the law recognizes you as the creator of such idea. Legal vehicles you can use to protect your intellectual property include patents, trademarks, trade names and copyright. Protecting your ideas is very important because it guards against intellectual pilfering.
3. Appraise and determine the value of your idea
How much is your idea worth? How much are you willing to sell your idea? What is the market value of your idea? All these figures have to be sorted out before taking your idea to the marketplace. Now how do you appraise your idea? How do you determine its monetary value? Well, you can hire a business consultant and appraiser to appraise your idea or you can determine the value of your idea by the market potential it holds.
4. Set a minimum sell out value
Before going into negotiations to sell your business idea; you must know the value of your idea and set a minimum amount you will be willing to accept for it. This will make negotiation easier because you know what you want. For instance, I can say the minimum amount I will be willing to sell my dog stand idea is one million dollars. If I sell above this mark, it’s okay but I won’t go below the mark.
5. Choose a sell out option
Choosing a sell out option is simply determining how you wish to be paid. Before going into negotiations to sell your idea, you should know how much you want for your idea and how you want to be paid. Are you going to sell for cash or take the stock option? Are you selling for instant payment or for a royalty? That’s left for you and your interested buyers to agree upon.
6. Know your objectives
The sixth step to selling your idea to companies and investors is to know your objectives. You might enter into negotiation with sugar coated tongue managers and may be carried away by their promises. Before going into negotiation; know your objectives, know what you want and stick to it.
7. Identify potential companies and investors
The seventh step to selling your ideas is to identify potential companies and investors with the capacity to buy your idea; and put them down in a list.
8. Write a business proposal to potential investors
After identifying potential buyers; send them a business proposal highlighting the basics and benefits of your idea. You can request a live demonstration or test running of your idea for interested buyers. An important point in writing a business proposal is to make sure you sell the benefits of your idea in your proposal. Remember that your primary aim of writing a business proposal is to arouse the interest of potential buyers.
9. Meet with interested buyers
If your idea holds potential, you will be contacted by interested buyers. Meet with these buyers and discuss business with them but make sure you do so under the close watch of your attorney. I will also advice that your potential buyers sign a conformity form before taking them on a live demonstration or test running of your business idea.
Keep in mind your objectives; and be conscious of your aim. Engage your potential buyers in tactical negotiation; don’t be in a haste to sell and don’t show a sign of exciting. Make sure you sit at the negotiation table with your attorney and if you feel you are not competent enough to negotiate; bring along a friend or associate and allow him/her do the talking.
10. Sell your idea or move to the next buyer
If step one to nine goes smoothly; then you may end up selling your idea. But if not, then move on to the next interested buyer. Remember you have a list of prospective buyers; if the terms could not hold between you and a buyer, don’t waste your precious time. Move on to sell your proposal to the next potential buyer.
After going through the process of selling your idea using this article as guideline; I bet that you will not only come out smiling, you will also come out more experienced with respect to dealing with companies and investors.