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How to Look Big, Act Big, Get Big. Andy Daniel President, Enginuity LLC. Disclaimer. Enginuity currently only looks and acts big I don’t always follow my own advice. Businessperson vs. Inventor. Businessperson looks for a way to make money

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how to look big act big get big
How to Look Big, Act Big, Get Big

Andy Daniel

President, Enginuity LLC

disclaimer
Disclaimer
  • Enginuity currently only looks and acts big
  • I don’t always follow my own advice
businessperson vs inventor
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
licensing or manufacturing
Licensing or manufacturing?
  • Licensing is much less risk
  • Unclear which is more profitable
  • Sometimes nobody wants to license
  • Don’t ignore manufacturing then licensing
licensing
Licensing

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

license terms
License Terms
  • What rights are you licensing?
  • Exclusive / non-exclusive
  • Royalty rate
  • Annual minimum
  • Escape clause
value order
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
patents
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
patents1
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
manufacturing
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
manufacturing1
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
home based manufacturing
Home-based manufacturing
  • Often lower quality at higher cost
  • Very difficult to succeed this way (except for artists)
product testing
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?"
packaging
Packaging
  • Your most critical component
  • That's what people see in the store
  • Hire an artist
typical product costs
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
perceived value
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)
advertising
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)
advertising1
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!)
find novel things to do
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
chain stores
Chain Stores
  • Much tougher to get into than small stores
  • But - convince one (tough) buyer, sell to 100's of stores all at once
chain stores1
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

small stores
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

competing with existing brands
Competing with existing brands
  • Why should the consumer buy yours?
  • Why should retailer carry your product?
learning about your industry
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.
trade magazines
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.
trade shows
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
appear professional
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
web sites
Web Sites
  • www.enginuity.com
  • www.aol.com/members/enginuity.htm
  • andy@enginuity.com
  • andy123@freemail.net

need I say more?

your home office
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
efficiency
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
phone calls
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"
phone calls1
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
long term success
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

plan to succeed
Plan to Succeed
  • Don't leave yourself with 2 losing possibilities

example: short run of a product that cannot be remanufactured

important lessons
Important Lessons
  • You never know what people will like
  • You never know which contact is important
in conclusion
In Conclusion…
  • It’s not for everyone…
  • You may or may not succeed…
  • It’s quite a ride…

Questions?