When inventors contact my company about Due Diligence I really like to explain the reasoning using a simple example. Look at it using this method, in case a manufacturer is about to choose to formulate, manufacture, and market a fresh product which could cost $50,000 to $150,000 to produce plus inventory costs, they will undoubtedly get their time to ensure that they are making a good business decision in advancing using the product (i.e.: have they done their homework around the product). Therefore, it is possible to sum up “research” as the procedure of gathering all the information necessary to generate a good business decision before making the big financial expenditure. It may generally be assumed the much more time, effort and money (i.e.: “risk”) that a company must spend to build up an invention, the greater number of they will evaluate the potential license. Understand that even when something looks to be easy and affordable, the procedure of developing and manufacturing is rarely easy and low priced. Companies will evaluate such criteria as feedback from customers, list price points, unit cost to manufacture, competitive landscape, manufacturing feasibility, market opportunity, etc.
Option 1 – Manufacturing by yourself – If you are planning on go right here, then yes you need to perform homework. Essentially, you feel the producer of your product and consequently you need to perform the due diligence in your invention much like other manufacturers would. The issue that I are finding is that many inventors who elect to manufacture their particular inventions do little, if any marketing due diligence, that is a big mistake.
Option 2 – Licensing for Royalties – if you are intending on licensing for royalties, i believe you may minimize your due diligence efforts, because ahead of any business licensing your invention, they will perform their own personal due diligence. If you are working with a company like Invention Home, the price to showcase your invention to companies can be minimal – therefore it may amount to more to truly perform the due diligence than it will to just InvenitHelp the invention to companies (which, is ultimately your very best form of due diligence anyway). Remember, you have to have taken enough time to do your basic researching the market along with a patent search earlier at the same time to be reassured that your product or service will be worth pursuing to begin with (i.e.: the product is not already in the marketplace and you will discover a demand).
Allow me to summarize. If you are intending on investing a large amount of money your invention, then it is recommended to analyze the opportunity first to be certain it’s worth pursuing; however, when you can actively advertise your invention to companies with minimal cost, there is no doubt an interested company will work their particular research (not depend on yours). Note: it usually is beneficial to have marketing research information available while you discuss Look At This with prospective companies; however, it is not necessarily always easy to have this info so you have to balance the effort and expense of gathering the info using the real necessity of having it.
Furthermore, i provides you with some homework tips.As discussed, the idea of marketing research is always to gain as much information as you can to create a well-informed decision on investing in any invention. Inside a perfect world, we might supply the relevant facts about sales projections, retail pricing, marketing costs, manufacturing setup and unit costs, competitive analysis, market demand, etc. However, these details may not be an easy task to locate.
If you are not in a position to pay a specialist firm to do home, it can be possible to carry out the research on your own; however, you must understand that research should be interpreted and employed for decision-making and naturally, it provides no value. It is whatever you use the data that matters. Note: I would recommend that you just do NOT PURCHASE “market research” from an Invention Promotion company. Often sold as being a “starting point” (they’ll usually approach you again with the expensive “marketing” package), the details are largely useless because it is not specific research in your invention. Rather, it can be off-the-shelf “canned” industry statistics, that can possibly not assist you in making a knowledgeable decision.