When inventors contact my company about Due Diligence I love to explain the notion having a simple example. Look at it by doing this, when a manufacturer is getting ready to make the decision to develop, manufacture, and market a new merchandise that may potentially cost $50,000 to $150,000 to produce plus inventory costs, they would undoubtedly place their time to make certain that they may be creating a good business decision in moving forward using the product (i.e.: have they done their homework around the product). Therefore, you may summarize “homework” as the process of gathering everything necessary to produce a good business decision before making the larger financial expenditure. It could generally be assumed how the more time, effort and cash (i.e.: “risk”) that a company must spend to formulate an invention, the greater number of they are going to evaluate the potential license. Understand that even when a product or service looks to be easy and affordable, the entire process of developing and manufacturing is rarely easy and low cost. Companies will evaluate such criteria as customer opinions, retail price points, unit cost to manufacture, competitive landscape, manufacturing feasibility, market opportunity, etc.
Option 1 – Manufacturing all by yourself – If you are intending on important source, then yes you will have to perform homework. Essentially, you feel the producer in the product and as a result you ought to carry out the homework on your own invention exactly like other manufacturers would. The issue i have realized is that many inventors who elect to manufacture their own personal inventions do little, if any marketing due diligence, which is actually a big mistake.
Option 2 – Licensing for Royalties – if you are planning on licensing for royalties, i believe it is possible to minimize your homework efforts, because before any company licensing your invention, they may perform their own research. In case you are by using a company like Invention Home, the price to advertise your invention to companies might be minimal – therefore it might set you back more to actually perform the due diligence than it will to simply InvenitHelp the invention to companies (which, is ultimately your greatest type of due diligence anyway). Remember, you ought to have taken time to do your basic consumer research as well as a patent search earlier during this process to feel comfortable knowing that your products or services may be worth pursuing from the beginning (i.e.: this product will not be already in the marketplace and you will discover a demand).
I want to summarize. If you are planning on investing a great deal of money on your invention, then it is wise to analyze an opportunity first to make sure it’s worth pursuing; however, when you can actively market your invention to companies with minimal cost, you can be assured an interested company will perform their own homework (not rely on yours). Note: it will always be helpful to have marketing homework information available as you discuss see this website with prospective companies; however, it is not always easy to have this data so you need to balance the effort and expense of gathering the info using the real necessity of having it.
In addition, i provides you with some research tips.As discussed, the notion of marketing due diligence is always to gain as much information as you possibly can to produce a well-informed decision on investing in any invention. In the perfect world, we will supply the appropriate information on sales projections, retail pricing, marketing costs, manufacturing setup and unit costs, competitive analysis, market demand, etc. However, this info is not always an easy task to locate.
When you are not in a position to pay an experienced firm to do go to my blog, it can be easy to perform the research by yourself; however, you need to realize that research should be interpreted and employed for decision-making and by itself, they have no value. It can be the things you use the information that matters. Note: I would personally recommend that you just do NOT PURCHASE “market research” from an Invention Promotion company. Often sold as a “starting point” (they’ll usually approach you again by having an expensive “marketing” package), the information is largely useless since it is not specific research in your invention. Rather, it really is off-the-shelf “canned” industry statistics, which will not really help you make a well informed decision.