Tuesday, November 5, 2013

Next Steps for Inventors: Turning Your Idea into a Small Business

Content provided by Melissa Deacon

Creating and marketing an invention can be hard work, but with a supportive network of other women inventors to help you to bring your invention to the customers who want it, you can turn your idea into a successful business. The key to making it work is to come up with a strong business plan and to break the process down into manageable steps.

Finding Your 1%
As the saying goes, genius is 1% inspiration and 99% perspiration, and while it is true that hard work and perseverance are essential for bringing your idea to the marketplace, it is just as important to find that 1% of inspiration that enables you to create a good product. A good idea for a new invention will form a strong foundation for your new venture. Inspiration can come from anywhere, so although many female inventors identify unfulfilled needs while they go about their everyday lives, others spend years developing highly specialized skills at work that enable them to see a problem in a new light and come up with a solution. Once you have your idea, you need to refine it into a workable product and look for a way to turn your invention into a business.

Turning Your Idea into Reality
In order to create a marketable product from your invention, you may need to work through a series of prototypes to find a design that looks good, works well, and can be manufactured at a reasonable cost. It can also help to undertake same product testing and market research to ensure that your invention meets people's needs. As you perfect your idea, it is important to protect all of your hard work to ensure that it will be you who reaps the rewards. If your idea is novel enough, you may be able to obtain a patent to protect it. You can also protect yourself and your invention by taking the right steps when you set up your own business, such as choosing the right legal structure, registering for the necessary taxes and obtaining the right types of coverage from your business insurance policy.

Setting Up a Small Business
Many inventors begin simply by selling their products to a few friends in their spare time, or setting themselves up as self-employed, but when a product is successful, the time comes when it needs to be turned into a business. In order to create a small business, it is vital to write a solid business plan that includes a description of how the business will be structured, and to understand the steps that need to be taken to create this new business entity:

1. Choose your business structure: sole proprietorship, partnership, LLC, corporation, cooperative or nonprofit. Many inventors choose a sole proprietorship or LLC when they start a business. Sole proprietorship is the simplest business structure, but an LLC can protect your personal finances by limiting your liability for the business, without requiring such complex paperwork as a corporation.

2. Register your business name with your state, if you will be trading under anything other than your own name. Your "Doing Business As" name can be registered with your state government or county clerk's office, but some states do not require this form of registration. You can also trademark your business name with the patent office to prevent anyone else from using it.

3. Get a Tax Identification Number from the IRS and register your business for state and local taxes. Depending on your business structure and location, you may need to file for state and federal income tax, self-employment tax, excise tax or tax for employers.

4. Check whether you need to obtain any licenses and permits at the local, state and federal levels. You may need a license if your business will involve activities such as transporting agricultural goods, selling alcohol or driving heavy vehicles, for example.

5. Protect your business with insurance to cover your business premises and employees, if you have them, and product liability coverage in case anything goes wrong with the items you sell. If you are running a business from home, you may need to add coverage for business activities to your home insurance policy in order to ensure your property will be protected, although this may not be enough to cover you against other business risks, such as public and product liability.

Organizing your business structure properly is vital, but your business plan should also cover your financial and marketing intentions. It is important to think about how you will cover your start up costs, how profits will be re-invested to help your business grow, and how you will reach potential customers and convince them to buy your product. The Women Inventorz Network can provide some invaluable support for online marketing and selling, but as your business grows, you may want to look into other avenues, such as approaching stores that might want to carry your product.
Post a Comment