1. Production Strategy

You must decide on how you want to make your invention. There are 3 main options;

• SELF Manufacture / MARKET

(Do it yourself)

PROS: Total control of the venture. Highest rewards.

CONS: Highest investment required and therefore higher risks. Large amount of work and responsibility. All the difficulties associated with bringing a new product to market. e.g. brand awareness, securing sufficient investment.

• LICENCE

(Allowing a manufacturing / marketing company to produce your idea on a royalty payment basis)

PROS: An existing company will have manufacturing / marketing expertise, financial support, an established brand and distribution network.

CONS: Less control over how your idea is developed. Less reward if successful.

• SELL IDEA OUTRIGHT

PROS: You will receive a fixed sum of money even if the product is unsuccessful.

CONS: You will not receive any more money, even if your idea becomes a global success.

It does not have to be an either/or decision. For example, James Dyson used the money he generated from licencing his Dyson vacuum cleaner to a Japanese company to manufacture it himself elsewhere. Click here to read about his story.

2. Financial Strategy

You need to raise enough investment to research, design, produce, promote and distribute your invention by the most effective means possible. Which ever method of production you decide upon, investment is needed.

It is advisable, especially if you decide to self-manufacture / market your invention, to create a new company. This allows the raising of equity or investment through the issuance of shares.

Raising finances can take a considerable amount of time, here are people who can help;

EQUITY INVESTORS

They provide cash for shares in a company. The investor would normally expect to be involved for a 3 - 7 year period.

For small / medium sums;

- Business Angels (private wealthy individuals operating individually or sometimes in a group)

- Corporate Venturers (big companies interested in technology development)

- Regional and University Seed Corn Venture Funds (locally based publicly and privately financed funds for regional strategies)

For larger sums (£1m +)

-Venture Capital Firms / Trusts (an investment company that invests its shareholders' money in start-ups and other risky but potentially very profitable ventures).

There are 3 main criteria for an equity investor to consider;

1. Confidence in the innovation and the entrepreneur's commitment to make it successful.

2. The business plan to achieve success must be credible.

3. The reward must be worth the amount of risk.

BANKS, FAMILY / FRIENDS, GRANTS are other means of obtaining finance.

3. Business Strategy

It is vital to formulate a carefully considered business plan. This should define the reason for financing, how the capital will be spent and the timetable for the whole venture.

It should include descriptions of;

• An executive summary - business / product, opportunity, unique selling point / competitive advantages, projections, target market, industry analysis
• Market research and analysis - customers, market size / trends, competition, estimated market share / sales
• The economic / financial situation - operating margins, breakeven analysis
• Marketing plan - overall strategy, pricing, advertising, promotion, distribution
• Design and development plans
• Manufacturing and operations plan - geographical location, facilities etc
• Management team -  biographies, motivations
• Proposed company offering - desired financing, securities offering, capitalisation timetable

Check out the Business Link website for lots of excellent information about how to set up a business and what sort of support is available.

Please proceed to Step 4 for advice on how to design, develop and manufacture your invention.

Inventors Showcase has services to help inventors for free - click here.

You are not alone! Click here for loads of links to where inventors can find support.