Did you develop a new game or software? Did you invent a new unique product? Developing the idea and creating the product are the first steps. The next question to ask then is: How do you earn from a product that you developed or created?
In order to realize the full earning potential of your product, you will have to provide your business with financial support, to properly set up production, to ensure adequate marketing and to pay enough attention to the legal issues. Moreover, you need to focus on managing your cash flow and reducing any potential risks.
There are a number of steps to consider and questions to answer if you want to make money from your own innovation:
- Who can help you in carrying a unique know-how solution into practice?
- What is the better way to organize production process?
- What exactly you need to put your strength in to get a maximum financial feedback from your product or innovative technology?
- Which are the main points to take into consideration?
In order to successfully realize an innovative idea and generate high profits it is necessary to focus on the following objectives.
Know who your customers are
The first thing you need to do is to find out who your customers are, and whether they actually have a need or want for the product that you created. Who has the problem that your software is solving? Who will most likely play your game; or who will use your product? In other words, who is the prospective customer?
The success of your new product will depend on how well it serves the customers’ wants and needs. The capability to properly find out your potential customer correlates directly to how fast you can get your return on investments and how high it would be. Ask yourself the following questions:
- What percentage of the customers’ problem is your new product solving? If your product will address their entire problem, then that’s good. If it only addresses a tiny part of the problem, you are opening yourself to risk from competitors.
- How important is the problem to your customer? If this is a problem that the customer is desperate to solve, they may be willing to pay premium to get your product. If the problem is something they can live with, you may not be able to charge as much as you want for the product.
- How often does the customer face the problem that you new product solves? If it’s an issue for them everyday, they may want your new product as soon as possible. If the customer only experiences the problem once every quarter, they may just solve it manually or find a cheaper way to solve their problem.
Looking for an investor
If you are unable to meet all the expenditures related to production, marketing and legal efforts, you will need an investor to cover the financial needs of your business and get your innovation off the ground. The success of your enterprise will depend considerably on whether you could establish reliable partnerships and find investors willing to support your innovation.
The most important point is to ensure the reliability of your financial partners. There are a number of risks of getting outsiders to help finance your business, foremost of which is the alignment of your vision with regards to the innovation as well to ensure that they can carry out their financial commitments. It is important to discuss the details of your strategic partnership with the investor, what both of you expect from entering their mutually beneficial relationship.
Establishing production process
Production cost occupies a significant part of entire expenditures required for realization of your idea. Whether it is possible to reduce this cost depends on the enterprise which you consider to cooperate with. Furthermore, in some cases you probably will need a specific equipment which is out of standard production scope, e.g. precise measurement equipment or high-tech hardware. It is hard to find an appropriate maker which could properly put your ideas into practice for an affordable price. Thus, to get the desirable result you need to be scrupulous enough to compare enterprises of your sphere of interest and make your choice for the most appropriate one.
Building an effective communication
First of all, be eloquent in your explanations. It refers to both overview of your solution for the potential investor, and technical description for the maker. The ability to skillfully convey your ideas is the key to successful cooperation. Further, it is extremely important to keep the production process under control. This also leads you to be quick and flexible in the communication with the maker to react on possible failures and to prevent production troubles. So the point is that your interaction with partners is strictly connected to the business communication. Express your thoughts correctly, know how to persuade your opponent, and be quick in your communication to manage your business safely.
Protecting your rights
One of the fundamentals of your success is to protect your possession rights. It means that you have to mitigate all the risks related to intellectual property and to prevent leakages of important data and any copyright violation. Besides, you are going to encounter the necessity of legal support for your collaboration with both investor and developer to be sure that the tasks you assigned would be properly fulfilled. Thus, in order to reach desirable result in realization of your innovation, pay enough attention to protecting your copyright and establishing legal basis for the cooperation with your business partners.
- Open Innovation: How to Create and Profit from Technology
- How Angel Investors Can Benefit a Small Business
- What is an Investor Ready Business Plan?
- What to Sell: How to Select the Right Product for Your Business
- Working with Investors to Grow your Business