The thought of starting a business is overwhelming and requires hard work. A lot of people stop trying, and others can’t find the courage to start. This process can be easy and a lot more fun if done systematically and with full preparation. People who understand the value of an idea create a million-dollar company and work hard to make it more successful. Selling ideas is not easy. To earn money, one must invest time and money to invent something that the market will be interested in. Let us first read what sells in the market!
As Napoleon Hill said, “All achievements, all earned riches, have their beginning in an idea”. We all have ideas, but It wouldn’t matter unless we do something with that idea. Before pitching your idea to investors, check the originality of the concept and research whether or not it already exists. It is also essential to know if it has demand in the market.
Tips to Make Your Idea Perfect
It is essential to understand the reliability and originality of an idea. Before investing in money and time, one should check the current market trends, records, demand, etc.
- Check Records: The Internet will help you check the regulated trademarks and copyright records related to your idea. If it doesn’t exist, make sure to file for a patent on the concept.
- Market Trends: Market trends help to streamline the process of an idea. The latest trends can help formulate an idea that suits the market situation and demand.
- Demand: Some great ideas fail because of demand. The customers’ demand can make or break an idea. It is important to target the right audience to increase its demand for it to be successful.
- Problems: The best ideas come from solving a problem. The ideas should revolve around making the life of customers easy. This can be possible if you look towards solving a problem. This doesn’t only generate money but also serves a purpose.
How to Sell a Business Idea?
1. Gather Information
The first step to sell a business idea is to do the required research. It is important to know the market as it helps in understanding the potential threats and competitors for the same business. Licensing the idea is necessary to save it.
Before pitching the idea, follow these steps:
- Patents and Trademarks: It is important to patent the idea before somebody else comes up with a similar one. Knowledge of legal steps and regulations helps to improve the production process.
- Know the market: Market trends play an important role in selling a business idea systematically. Group testing helps to gather information and know customers’ preferences. You can further compile this information to understand the production process and demand for the product.
- Production Process: Learning about the production process of your business idea can help immensely in selling the idea. You should know what kind of material, layout, manufacturing techniques are needed to build your product.
2. Prepare a Presentation
After gathering the required information, the next step is to prepare a presentation for investors. A three-dimensional model is effective in conveying the message in detail. The sell sheet should consist of one to two pages and describe the following:
- Information about the product
- Features and benefits of the product
- Market demand
- The legal status of the product (patent, copyright, trademark)
To accompany the sheet, an introductory letter is attached to explain the follow-up process and information related to the next step of the business.
3. Prospective Targets
The next step is to select the number of investors and narrow it down to 50 who are likely to be interested in your product. The number of targets can be higher as a majority of companies will typically turn down an idea. The selection of investors is crucial for a successful business. You can identify the targets through manufacturers, trade associations, similar industries, etc. Online business ideas like websites can provide a tremendous amount of information to the user and help narrow down the prospective targets for the business idea.
4. Select the Target
After making a list of prospective targets, it is essential to prioritise them as per the business’s requirements and needs. The qualified targets will make the best fit for the product. Several factors need to be considered before finalising the target, including:
- Size of the company: Large companies are most likely to fund the business idea due to their high profits and revenue. Small companies might pay less for the invention and benefit from the situation.
- Geography: The local companies in your area might help you get a face-to-face meeting with potential investors. It is essential to meet investors and pitch your idea as quickly as possible.
- Product Line: The chances of getting a ‘yes’ from an investor are higher when your product is aligned with the company’s products. It would help the investor’s company to compete in the market.
- Company Policy: The company policies play an important role in the selling of an idea. The policy of accepting submissions is more entrepreneurial than others.
5. Seal the deal
The last step in the process is to finalise the deal. There is no set of rules and regulations on how and how much to negotiate. It can vary dramatically on your confidence, persuasion power, and capabilities of the product. The negotiations need to be realistic in terms of the money and worth of the product. The deal will be in cash, credit, royalties, exclusivity, etc. The cash deals are considered the best deals. Some of the ways to get the best possible deal for your ideas are as follows:
- Up-front payment
- Annual minimum amount
Thus, we can say that selling a business idea requires hard work and consistency. It is not as easy as it sounds. It is important to perfect the business idea and target the right audience for the same.
The first step to sell a business idea effectively is to gather the relevant information about market trends and production processes after preparing the presentation to the respective targets. The selection of the right target plays an important role in the business idea. The last step is to negotiate the prices and make the deal.
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Q. How to determine the value of my business idea?
Ans. Many factors are considered to determine the business’s value depending on market situations, government regulations, taxation policies, etc. You can determine business valuations in many ways, such as cash flow and physical assets. These integrated strategic analyses can help an individual figure out the valuation of the product or company as a whole.
Q. Will an individual need a lawyer or accountant?
Ans. Yes, accountants and lawyers must make the best deal and create a neutral environment for both parties. An individual might not know the legal regulations and procedures and financial policies and concepts of the business. In this case, they might need a lawyer and an accountant. Tax policies and implications are critical and you need a professional expert to guide you.
Q. How long will the purchasing cycle take?
Ans. The purchasing cycle depends on the product or service an individual is selling. Medical technology or aeronautics technology might take from 18 months to several years as it requires authentication, digital tests, and existence tests. Clothing and beauty products might take less time than advanced and rare technological products as they don’t require authenticity processes, medical lab tests, etc. On the other hand, phone applications, software, etc., can be purchased immediately.
Q. What are the benefits of starting a new business?
Ans. The benefits of starting a new business are as follows:
- Independence: Once the business is established, it will contribute to your freedom and independence. It will bring flexibility to your schedule.
- Power: A new business comes with power and can be used in a constructive way to do well socially and economically.
- Money: It can contribute to the financial wellness of the person.
- Personal Fulfilment: Running a business is self-satisfying and more fulfilling than working for someone else. You are your boss and don’t have to be accountable for all your actions.