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All posts for the month December, 2018

Read the Complete Article at: http://onestopinventionshop.net/blog/2018/12/outsource-entrepreneurs/

Outsource
Entrepreneurs

An outsource entrepreneur uses outsourcing to
quickly bring his or her product to market with low risk and low investment.
There are essentially three aspects to bringing a product to market: research
and development; manufacturing; and marketing. As the inventor, you perform the
task of research and development (inventing and developing the idea) and outsource
the manufacturing and marketing to investing partners. The investing partners
will provide further development and pay for many of the startup costs. In
return they will receive more profits than contracted work and will have some
control of the idea.

This is often the fastest way to bring a
product to market, is low risk and allows you to move onto new ideas quickly
since the other partners will continue to manufacture and market your idea
without excessive involvement on your part.  This is not for everyone and
will require you to have strong deal-making skills, but the low-risk and
low-investment aspect makes this appealing for most inventors, who are often
strapped for cash.

Chose the Best Partners

Not everyone will be a good candidate for
becoming an outsourcing partner. You need to find manufacturers who can add
your product without too much investment in new machinery and who are running
below capacity. Marketing partners must carry products similar to yours and
your product must represent a significant increase in sales for the firm, at
least 20%. In short, you need to find potential partners who have a lot to gain
from taking on your product. This usually means you will not be dealing with
industry leaders, but smaller companies hoping to catch up and overtake those
leaders.

You will need a manufacturing partner and a
marketing partner for the outsourced model.  See lesson 9 on Manufacturing
to find potential manufacturers. There are many options for marketing partners,
distributors, small manufactures of complementary products, groups of sales
reps, larger companies, and specialized marketing companies.  The best way
to find outsourced marketing partners is by attending industry trade shows and
association meetings. While at the shows walk around and talk to companies with
smaller booths with complementary products, explain your product to them and
ask: how they sell their product; what distributors they use, and see if they
would be interested in any joint marketing programs.  I also like talking
to people at the tables by where people eat lunch, they typically hold 10 to 15
people and meet people in the industry.  You can also use the trade show
directory to look up people after the show and call them up and talk to them.

For both manufacturing and marketing models
you need partners willing to put up high amounts of support and an
investments.  There are several characteristics to look for when searching
for both marketing and manufacturing companies:

You can add 10% to 20%
to their revenue stream. Less than 10% and there is not enough incentive for
the company, and more than 20% the company might not have the funds needed to
move forward.The company has a
stagnating product line, and has fallen behind competitors. Companies know when
there line is old and you represent a low cost way for them to expand their
line.The company has money
to invest. You want to be a low cost option, but not a free option. Good
partners offer support, manufacturers might pay for tooling, amortize tooling
cost, offering extra-long terms, purchasing inventory, or offering a straight
up investment. Marketing partners could offer down payments, pay for trade
shows, run advertising programs or offer other assistance that helps promote
your product. The partners know how to cost-effectively spend their money. If
you pay the money, you won’t be nearly as cost effective

Set
Up a Proposed Deal Structure

Before you start approaching potential
partners, you should know what kind of deal you are hoping to set up. Have an
idea about what kind of investments each partner will make, how you will divide
profits and how you will handle the future of your idea. Remember this isn’t
the final deal, but just a starting point for you and your partners. No one
will sign on a deal that isn’t fair for them, so try to make it as fair as
possible for everyone involved. Don’t devalue yourself in this process though,
creating and developing the idea is very valuable and the basis for the
partnership.

Basically what you have to do offer is an
exclusive, that you will commit to produce the product with a manufacturer for
certain considerations, and you will commit to selling only to the marketer for
a certain length of time in return for certain considerations.  If you can
do this without giving up any of your company that is great, but you may need
to go farther, for example offering 10% ownership, and sometimes more to the
manufacturer in return for more financial help, and you might need to have a
private label or a joint venture agreement with the marketing partner. It all
depends on what investment you require and what the return could be.  If
you have a sewn product, with very little investment, you might not give away
anything. But as the costs goes up the market needs to be bigger and the
manufacturer and marketer may need a better deal and some ownership.

As a guideline, your partners will want to
have an 18 month payback period, so they will make back in profits in 18 months
their total investment. If you can get that requirement, you might be able to
make a deal. To help your presentation consider contacting SCORE, which is a
group of retired executives in every city, or the Small Business Development
Center which you can find at www.sbdc.org

Check out the inventor story in the articles,
Colin Roch, and Bobby Ronsse – Pen Again to see how they approach their
situation. Just enter the inventors name in the search box on
OneStopInventioShop.net to get the article

Approach Potential Partners

Approaching your partners can be difficult.
Manufacturers don’t want to sign a deal unless there is a marketing firm
guaranteeing sales — and marketers don’t want to sign a deal unless a
manufacturer can promise to produce the projected volumes at a reasonable
quality. The best way to overcome this obstacle is by first approaching a
manufacturer and asking them to commit to the project if a marketing firm will
sign on to the deal. If the manufacturer agrees, then you have a solid enough
commitment for a marketing firm to be willing to sign on.

You should the process with a presentation.
These are the key points

You have had some
market success and very strong market research results.You don’t have the
money to pursue the invention on your own in a big way to accelerate salesYou want to see if you
can find a way to work togetherExplain who the other
partners are that you are negotiating with.Demonstrate an 18
month payback period

Approach Manufacturers

You have your proposed deal structure ready
and now you should use that to start talking with manufacturers. Remember that
you want them to commit to the deal if you find a marketing partner. You should
also try to point out these advantages to the manufacture

You have a strong
product and a strong marketing partner.You have had
impressive market researchYou offer many
tangible benefits to the company, which could include: a) a strong
complementary product to other production; b) a firm base that they can count
on for a period of time, this is particularly strong with contract
manufacturers; c) this sales base should help them gain additional customers.The point that will
really sell is that you have an 18 month payback and you have a sales forecast
that is believable due to your market research.

Approach Marketers

Once you have a preliminary agreement with
your manufacturer, you can start approaching marketers. Make sure you have
chosen your marketers carefully and approach the ones you think will be most
likely to join the partnership. Marketers become wary of products that have
been “shopped around” and will avoid your product if they think too many others
have said no to you already. So do your homework and be confident that you
approach those companies for whom your product would be a good fit. You should
start by explain your business model. These are the key points

He product is
complementary to other products they carry on the synergy of the products will
increase sales for all products,Your product is on the
cutting edge and will help the marketer’s image as a progressive companyThe momentum gained
from adding the product will energize he companyMuch of the risk is
being handled by the manufacturer.

Once you find two partners who are interested
you need to all sit down together and hammer out all the details and close the
deal. You need to be protective of your share here. If you can prove that you
can offer some kind of ongoing service for the project it will be easier to get
your fair share. You may also want to hire an attorney to help you protect your
rights. But you have several options in the final deal that could all benefit
you.

Private label
agreement, with a marketing guaranteeing to take a certain volume it will be
much easier to get a manufacturer to sign on.Joint venture, where
one or more of the partners will own part of the company in return for their
investment. You are best off doing this with only one partner as it will help
you maintain some control.Taking a marketing
commission, of maybe 25% in return for the manufacturer picking up all the
costs. This is an approach to take when you don’t have any money to offer, but
have made industry contacts to help you market and sell the productExclusive agreements
with both the manufacturer and the marketer in return for considerations
including investmentsBe flexible if the
partners have another suggestion, but the first four points will cover over 90
% of the proposed deals

Most of the time, manufacturing and marketing
partners want an intermediate step to prove the product will sell before
jumping in too far.  You might want to propose an intermediate step of a
small-scale product run and further market test with the partners’ involvement.
If your product sells well, your potential partners will have nothing to worry
about.  You should be able to set this up with the marketer so the marketer
will use some of its close contacts to run the tests.  This will improve
your odds of a successful test.

Other tactics that will improve your chances
will be do be involved in the industry, so the potential partners see you do
have contacts and a PR media campaign that highlights your success to date
which will add credibility.  You can also try to give speeches or seminars
at industry events to cast you as an expert with your potential partners.

Being involved in the industry will help you
meet some potential partners and hopefully will connect you with a number of
people from every potential partner’s company. Having people pulling for you
within the company will help you seal the deal.

e

Outsource Entrepreneurs

An outsource entrepreneur uses outsourcing to
quickly bring his or her product to market with low risk and low investment.
There are essentially three aspects to bringing a product to market: research
and development; manufacturing; and marketing. As the inventor, you perform the
task of research and development (inventing and developing the idea) and outsource
the manufacturing and marketing to investing partners. The investing partners
will provide further development and pay for many of the startup costs. In
return they will receive more profits than contracted work and will have some
control of the idea.

This is often the fastest way to bring a
product to market, is low risk and allows you to move onto new ideas quickly
since the other partners will continue to manufacture and market your idea
without excessive involvement on your part.  This is not for everyone and
will require you to have strong deal-making skills, but the low-risk and
low-investment aspect makes this appealing for most inventors, who are often
strapped for cash.

Chose the Best Partners

Not everyone will be a good candidate for
becoming an outsourcing partner. You need to find manufacturers who can add
your product without too much investment in new machinery and who are running
below capacity. Marketing partners must carry products similar to yours and
your product must represent a significant increase in sales for the firm, at
least 20%. In short, you need to find potential partners who have a lot to gain
from taking on your product. This usually means you will not be dealing with
industry leaders, but smaller companies hoping to catch up and overtake those
leaders.

You will need a manufacturing partner and a
marketing partner for the outsourced model.  See lesson 9 on Manufacturing
to find potential manufacturers. There are many options for marketing partners,
distributors, small manufactures of complementary products, groups of sales
reps, larger companies, and specialized marketing companies.  The best way
to find outsourced marketing partners is by attending industry trade shows and
association meetings. While at the shows walk around and talk to companies with
smaller booths with complementary products, explain your product to them and
ask: how they sell their product; what distributors they use, and see if they
would be interested in any joint marketing programs.  I also like talking
to people at the tables by where people eat lunch, they typically hold 10 to 15
people and meet people in the industry.  You can also use the trade show
directory to look up people after the show and call them up and talk to them.

For both manufacturing and marketing models
you need partners willing to put up high amounts of support and an
investments.  There are several characteristics to look for when searching
for both marketing and manufacturing companies:

You can add 10% to 20%
to their revenue stream. Less than 10% and there is not enough incentive for
the company, and more than 20% the company might not have the funds needed to
move forward.The company has a
stagnating product line, and has fallen behind competitors. Companies know when
there line is old and you represent a low cost way for them to expand their
line.The company has money
to invest. You want to be a low cost option, but not a free option. Good
partners offer support, manufacturers might pay for tooling, amortize tooling
cost, offering extra-long terms, purchasing inventory, or offering a straight
up investment. Marketing partners could offer down payments, pay for trade
shows, run advertising programs or offer other assistance that helps promote
your product. The partners know how to cost-effectively spend their money. If
you pay the money, you won’t be nearly as cost effective

Set
Up a Proposed Deal Structure

Before you start approaching potential
partners, you should know what kind of deal you are hoping to set up. Have an
idea about what kind of investments each partner will make, how you will divide
profits and how you will handle the future of your idea. Remember this isn’t
the final deal, but just a starting point for you and your partners. No one
will sign on a deal that isn’t fair for them, so try to make it as fair as
possible for everyone involved. Don’t devalue yourself in this process though,
creating and developing the idea is very valuable and the basis for the
partnership.

Basically what you have to do offer is an
exclusive, that you will commit to produce the product with a manufacturer for
certain considerations, and you will commit to selling only to the marketer for
a certain length of time in return for certain considerations.  If you can
do this without giving up any of your company that is great, but you may need
to go farther, for example offering 10% ownership, and sometimes more to the
manufacturer in return for more financial help, and you might need to have a
private label or a joint venture agreement with the marketing partner. It all
depends on what investment you require and what the return could be.  If
you have a sewn product, with very little investment, you might not give away
anything. But as the costs goes up the market needs to be bigger and the
manufacturer and marketer may need a better deal and some ownership.

As a guideline, your partners will want to
have an 18 month payback period, so they will make back in profits in 18 months
their total investment. If you can get that requirement, you might be able to
make a deal. To help your presentation consider contacting SCORE, which is a
group of retired executives in every city, or the Small Business Development
Center which you can find at www.sbdc.org

Check out the inventor story in the articles,
Colin Roch, and Bobby Ronsse – Pen Again to see how they approach their
situation. Just enter the inventors name in the search box on
OneStopInventioShop.net to get the article

Approach Potential Partners

Approaching your partners can be difficult.
Manufacturers don’t want to sign a deal unless there is a marketing firm
guaranteeing sales — and marketers don’t want to sign a deal unless a
manufacturer can promise to produce the projected volumes at a reasonable
quality. The best way to overcome this obstacle is by first approaching a
manufacturer and asking them to commit to the project if a marketing firm will
sign on to the deal. If the manufacturer agrees, then you have a solid enough
commitment for a marketing firm to be willing to sign on.

You should the process with a presentation.
These are the key points

You have had some
market success and very strong market research results.You don’t have the
money to pursue the invention on your own in a big way to accelerate salesYou want to see if you
can find a way to work togetherExplain who the other
partners are that you are negotiating with.Demonstrate an 18
month payback period

Approach Manufacturers

You have your proposed deal structure ready
and now you should use that to start talking with manufacturers. Remember that
you want them to commit to the deal if you find a marketing partner. You should
also try to point out these advantages to the manufacture

You have a strong
product and a strong marketing partner.You have had
impressive market researchYou offer many
tangible benefits to the company, which could include: a) a strong
complementary product to other production; b) a firm base that they can count
on for a period of time, this is particularly strong with contract
manufacturers; c) this sales base should help them gain additional customers.The point that will
really sell is that you have an 18 month payback and you have a sales forecast
that is believable due to your market research.

Approach Marketers

Once you have a preliminary agreement with
your manufacturer, you can start approaching marketers. Make sure you have
chosen your marketers carefully and approach the ones you think will be most
likely to join the partnership. Marketers become wary of products that have
been “shopped around” and will avoid your product if they think too many others
have said no to you already. So do your homework and be confident that you
approach those companies for whom your product would be a good fit. You should
start by explain your business model. These are the key points

He product is
complementary to other products they carry on the synergy of the products will
increase sales for all products,Your product is on the
cutting edge and will help the marketer’s image as a progressive companyThe momentum gained
from adding the product will energize he companyMuch of the risk is
being handled by the manufacturer.

Once you find two partners who are interested
you need to all sit down together and hammer out all the details and close the
deal. You need to be protective of your share here. If you can prove that you
can offer some kind of ongoing service for the project it will be easier to get
your fair share. You may also want to hire an attorney to help you protect your
rights. But you have several options in the final deal that could all benefit
you.

Private label
agreement, with a marketing guaranteeing to take a certain volume it will be
much easier to get a manufacturer to sign on.Joint venture, where
one or more of the partners will own part of the company in return for their
investment. You are best off doing this with only one partner as it will help
you maintain some control.Taking a marketing
commission, of maybe 25% in return for the manufacturer picking up all the
costs. This is an approach to take when you don’t have any money to offer, but
have made industry contacts to help you market and sell the productExclusive agreements
with both the manufacturer and the marketer in return for considerations
including investmentsBe flexible if the
partners have another suggestion, but the first four points will cover over 90
% of the proposed deals

Most of the time, manufacturing and marketing
partners want an intermediate step to prove the product will sell before
jumping in too far.  You might want to propose an intermediate step of a
small-scale product run and further market test with the partners’ involvement.
If your product sells well, your potential partners will have nothing to worry
about.  You should be able to set this up with the marketer so the marketer
will use some of its close contacts to run the tests.  This will improve
your odds of a successful test.

Other tactics that will improve your chances
will be do be involved in the industry, so the potential partners see you do
have contacts and a PR media campaign that highlights your success to date
which will add credibility.  You can also try to give speeches or seminars
at industry events to cast you as an expert with your potential partners.

Being involved in the industry will help you
meet some potential partners and hopefully will connect you with a number of
people from every potential partner’s company. Having people pulling for you
within the company will help you seal the deal.

The post OUTSOURCE ENTREPRENEURS appeared first on One Stop Invention Shop.

Read the Complete Article at: http://onestopinventionshop.net/blog/2018/12/companies-looking-for-new-products/

Some companies actively look for new products, and they host new vendor days, have contests and travel around the country. Keep track of companies looking for new products in your industry to get the product in front of new buyers.

Contests

Inventor Contests are an  avenue for inventors to expose their product without the big expense of a major trade show. NBC’s Today Show along with QVC is sponsoring the Next Big Thing Contest every January and February. http://submitmyinvention.com/submit1b/qvc-sprouts.  The Small Business Administration runs the Innovate a  contest for innovative products and services that help impact and empower the lives of women and families. https://www.challenge.gov/challenge/2017-innovateher-innovating-for-women-business-challenge/.  These contests come and go, Companies like Wal-Mart, Staples, Hammacher Schlemmer have all had contests in the past. Do a google search for invention contests, then hit the news button. Scroll to the bottom of the screen and click on the button for create alert. This will deliver to your email news of invention contests as they open up.

 

Calls for New Products

Retailers, Home Shopping Networks,, Mail Order Catalogs and members of the Direct Response industry frequently call for new products to review. For example Pets at Home has announced that it is to hold two “Innovation Speed Dating” sdays in 2017. One day focused on on food and treat innovations and the second day focused on non-food and accessory innovations. http://onestopinventionshop.net/blog/2017/01/pet-retailer-looking-inventor-products/

 QVC has program, QVC Sprouts, www.qvcsprouts.com/, where you can post submit your invention at no charge, viewers then vote on which idea they like best and QVC outs the most popular program on TV.

The Direct Response TV companies are always looking for new products. An example is Telebrands, which has an active program that actively seeks new products from inventors. www.telebrands.com/inventors/. You’ll find many of the other major companies have similar programs. Response Magazine www.responsemagazine.com, is the industry’s major trade magazine and you can get information about many of the programs from their web site.

The best way to find out what companies have contests are or looking for product is through industry trade magazines, which are magazines targeted generally at industry retailers and suppliers, which includes manufacturers and distributors. One web site that offers trade magazines is http://www.webwire.com/IndustryList.  A much better source is Gale’s Directory of Publications and Broadcast Media, which is not available free on the Internet, but the reference can be accessed through larger libraries. Gale’s is by far the most complete list of trade magazines available.

The post Companies Looking for New Products appeared first on One Stop Invention Shop.