How to Look Big, Act Big, Get Big

1. How to Look Big, Act Big, Get Big Andy Daniel President, Enginuity LLC

2. Disclaimer • Enginuity currently only looks and acts big • I don’t always follow my own advice

3. Businessperson vs. Inventor • Businessperson looks for a way to make money • Inventor does something they enjoy and tries to make money at it. • Do what you enjoy - don't just chase $$$ • If you're unhappy, you won't have the energy to continue

4. Licensing or manufacturing? • Licensing is much less risk • Unclear which is more profitable • Sometimes nobody wants to license • Don’t ignore manufacturing then licensing

5. Licensing or, "Why are those crooks offering me so little?"

6. License Terms • What rights are you licensing? • Exclusive / non-exclusive • Royalty rate • Annual minimum • Escape clause

7. Value order • A product with a strong sales history • A product that is actually being sold • A product that it ready to ship • A product that is in first production • A finished prototype • A functional prototype • Used dishwater • A fantastic idea

8. Patents Do you really need or want one? The answer is not always obvious. • Patents are quite expensive to obtain: legal fees, filing fee, issue fee • Patents require payment of maintenance fees • Patents take about 2 years to issue

9. Patents • Many patents are easily circumvented • Unless your value is in the brilliant invention rather than in its brilliant execution, the answer is probably no. • However: you can use Patent Disclosure, PPA, and filing without issue to buy time at comparatively low cost

10. Manufacturing • Economies of scale are critical • Good artwork is no more expensive to print than bad artwork • Spend money/time up front • When shopping for manufacturing, stop thinking like a consumer

11. Manufacturing • Murphy's law: everything that can go wrong, will go wrong • Andy's law: everything will go wrong (at least slightly) • Check like a hawk at every step • Control as much of the process as is worthwhile

12. Home-based manufacturing • Often lower quality at higher cost • Very difficult to succeed this way (except for artists)

13. Product Testing • Don't use your friends/relatives - they can't give an honest opinion • Unless you plan to ship yourself with each copy of the product, hand it to the tester and stand back - say nothing. • When they ask you a question, ask them "what do you think?"

14. Packaging • Your most critical component • That's what people see in the store • Hire an artist

15. Typical product costs • Customer buys product for $19.95 • Retailer buys product for $10.00 • Distributor buys product for $8.50 • Publisher manufactures product for $5.00 • Don't forget reps, advertising, etc. • You must produce your product for 1/4 to 1/5 of what consumers will pay

16. Perceived Value • Consumer should feel that they are getting value for their money • Big: consumer likes this, retailer doesn't (takes shelf space) • Heavy: consumer like this, retailer tolerates it (higher freight costs)

17. Advertising • Does it really work? • You need 1000's of ads for an order • You need repetition before people will remember you (some say 7 times)

18. Advertising • The Internet • as a source of info, it's the best thing since sliced bread • The great equalizer - NOT! • unless you're Microsoft, it's a "pull" medium • Face-to-face selling • far and away the most likely for a sale (call first!)

19. Find Novel Things to Do • Look for novel ways to sell • Look for novel things to do • Look for free/inexpensive ways to do things better

20. Chain Stores • Much tougher to get into than small stores • But - convince one (tough) buyer, sell to 100's of stores all at once

21. Chain stores + Lots of customers + Much bigger orders - Usually demand a price break - Not interested in pioneering anything - want proven sales - Often demand return privilege and dating

22. Small Stores + More willing to try a new product (if not avail at K-Mart!) + Willing to try "local" product to help fellow small business - Usually tiny order + Able to steer customers toward your product + Can result in a more targeted customer, esp. at high end

23. Competing with existing brands • Why should the consumer buy yours? • Why should retailer carry your product?

24. Learning About Your Industry • Every industry has a "way they do things". Try and learn it. • Your customers will usually want to do them the same way.

25. Trade Magazines • A great source of information. • Very often FREE, otherwise fairly inexpensive. • Ads are the most useful part for learning about the industry. • First issue - read every word. • Other issues - skim it.

26. Trade Shows • Attending - often free to attend & you'll learn alot • Exhibiting - quite expensive & be sure you can deliver product/service immediately - buyers are not interested in "later" • Attend before you choose to exhibit • Follow-up is everything

27. Appear Professional • Business cards, stationery, 800 numbers • Try to appear much larger than you are • It helps to appear like a serious player with both customers and suppliers, but it's much more important with customers

28. Web Sites • www.enginuity.com • www.aol.com/members/enginuity.htm • andy@enginuity.com • andy123@freemail.net need I say more?

29. Your Home Office • Separate business and fax lines (not a home line) • Fax machine • Letterhead • Business cards • Separate checking account • Answering machine in business voice • Laser printer

30. Efficiency • Develop your systems • Try to group your work - it's very inefficient to switch tasks constantly • Develop your relationships with vendors - once it works, it's trouble-free • Use your computer to manage tasks

31. Phone calls • "Hello, this is John/Mary Smith of Incredibly Successful Inc. I'm in the office but don't want to speak to you right now. Please leave your message at the tone and I won't return your call"

32. Phone Calls • Buyers will never call you back • Vendors will call you back within 15 seconds • if a vendor doesn't return calls promptly, find another vendor

33. Long-term success • Don't become an individual service provider There’s only 1 of you, and there are only 24 hours in a day

34. Plan to Succeed • Don't leave yourself with 2 losing possibilities example: short run of a product that cannot be remanufactured

35. Important Lessons • You never know what people will like • You never know which contact is important

36. In Conclusion… • It’s not for everyone… • You may or may not succeed… • It’s quite a ride… Questions?