How to commercialise your business idea? (Part 5)

December 28, 2015

Commercialising the idea

If the idea is commercially and technically viable and you have protected the IP, the next step is to commercialise the new product or service. Gaining IP protection takes time, money and resources and should only be done if you intend to commercialise the protected knowledge. There are a number of ways to commercialise IP, such as
• Starting up your own venture to exploit IP
• Licence the protected IP to larger players and get a fee per year/sale
• Establish a joint ventures between yourself and other business maybe to exploit IP in other countries or regions that you cannot access
• Sell the protected IP for a profit

Starting your own business: this is the DIY option. There are a few things you need to consider before going down this route:
• Build a team: Nobody can build a fast-growing business on their own; no one person has all the skills. The lessons from successful tech companies of all varieties are that people need to build a strong management team first and then utilise their skills and experience to commercialise the product. Usually, this team requires a Chief Executive Officer (strategic boss who oversees the development of the business and strategic deals etc), Chief Financial Officer (the accountant and guardian of the finances: very important if you want angel or VC funding), Chief Operations Officer (the person who runs the floor on a day-to-day basis, usually a tech person), there is also going to be a senior sales and marketing person if not covered by the other positions. A key point; you can be any of the above positions or once the company is up and running you can be the Chairperson of the Board or President. Not all inventors are cut out to be the CEO, many might be COO or just hire in the staff and steer the company from the Board
• Build a market and customer base: Sustainable businesses are built on developing long-term business relationships. Repeat business is the key to building a strong company. Reputation is the most important asset you can have
• Get a good Administrator: You need to have someone who keeps control of the books, invoices, credit control and cash flow issues. Good administration means good cash flow
• Get investors who are committed for the long run: Get investors who will partner you in your business and gain maximum returns through building a strong enterprise, not a quick hit
• Plan, plan plan…: Planning is a process not a document. Constantly update your plans, measure and assess the current plans, tweak for improvements
• Keep an eye out for possible innovations and alternative uses/markets: Look for the outliers, look for different ways to utilise and apply the current products and services, maintain your curiosity and innovation

There are of course other options:
• License the invention to a larger company and take a fee on ever unit sold. Larger companies will have much stronger market power and ability to bring new products to market. You will need professional advice when negotiating with potential companies to ensure you protect your IP and maximise value
• You could sell the rights to the patent, license etc. Valuing IP is as much art than science and again a subject for which you will need to take professional advice.

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