Goofy cat photos, pet rocks and a flatulent app – all are simple (dare we say dumb?) ideas that reportedly made their creators millions.
Finding the next hot thing isn’t rocket science, and you probably already know just what this world needs. But if you’ve got a great idea percolating in your head, you need to take action now before someone else does.
Watch the video below to learn what Money Talks News finance expert Stacy Johnson suggests you do to turn your idea into reality. Then keep reading for more tips and resources.
Step 1: Do your research
Before you spend time, and possibly money, on your invention or idea, you need to make sure it hasn’t already been created.
Internet searches are always a good place to start, but don’t stop there. Go to uspto.gov and search for existing patents and trademarks.
You’ll also want to do some market research to determine whether there’s actually demand for your product or idea. However, before you start sharing your plans with too many strangers, see Step 3 below.
Step 2: Develop a business plan
The next step is to create a business plan. Even if your idea isn’t fully formed yet – or perhaps especially if it isn’t fully formed – you need to know how much money you can afford to spend and what the process of developing and marketing your idea looks like.
If you’re not sure where to start, you may want to arrange for some free mentoring or advice from SCORE. Another option would be to contact your local Small Business Administration office to see what services they offer.
Step 3: File for a patent if applicable
The law regarding patents changed dramatically a few years back.
Prior to the 2011 passage of the America Invents Act, the first person to invent a product retained exclusive rights to sell or license it for 20 years. That meant inventors could write their idea in a journal and have it signed by a witness as proof of the invention date. Then, they would build a prototype, do some tinkering and eventually get around to filing for a patent once the wrinkles were ironed out.
However, the new law switches the system to a first-to-file/first-to-disclose model. It no longer matters who came up with the idea first, but instead the 20-year exclusivity rests with the person who first publicly discloses it. Or if no one publicly discloses the idea, then the first to file for the patent wins the rights.
TechCrunch has a good article on the law and how various scenarios play out.
The bottom line is you have two options to protect your idea and each gives you only a year to work out the specifics.
- You can publicly disclose the idea (such as via a blog post), and the law gives you one year to file a patent application.
- You can file a provisional patent application, and the law gives you a year to turn it into a permanent application.
So again, before you start having too many private conversations about your big idea, make sure you have taken the appropriate steps to protect it from thieves.
Step 4: Make a prototype
At this point, it’s time to turn your idea into reality. You need to build a prototype.
Depending on your invention, you may be able to construct the prototype yourself or you may need to get some help. You can find suggestions for making prototypes from Entrepreneur magazine and StartupNation. In addition, there may be a nearby Inventor Club where you can connect with others who may have suggestions for local resources.
If your idea involves a new type of website or app, you can find Web designers and app developers for hire on sites such as Elance.com, Freelancer.com and Guru.com. However, be aware that anyone can set up shop on these websites, and talent can vary widely. In addition, while some contractors are willing to work for very little, you often get what you pay for.
Another option may be to contact your local college or university. Students may be eager to gain experience and work for less than professional rates in exchange for a reference or the opportunity to add the project to their resume.
Regardless of how you find help, you may want to consider using a non-disclosure or no-compete contract, especially if your idea isn’t patentable.
Step 5: Find feedback from beta testers
Once you’re happy with your prototype, you need to find some people who are willing to try it out. Feedback from beta testers can not only lead to product or service improvements but may also be helpful when it’s time to find investors.
As you near the end of the beta phase, try selling prototypes as well to better gauge customer demand.
Step 6: Find investors
By now, you should have a polished prototype and hopefully some early sales to bolster the case that your idea is grand.
Step 6 is to find some deep pockets willing to pay for large-scale manufacturing or deployment of your plans. Unfortunately, as our resident money expert points out, finding private investors can be a challenge.
Rather than finding one or two people able to invest large sums of cash, you could go the crowdfunding route with these websites:
You can also visit the Angel Capital Association for more information on finding angel investors.
However, in the end, it might be up to your savings account – and maybe some close family and friends – to get your idea off the ground.
Step 7: Make millions (hopefully)
Ah, time to enjoy the fruits of your labors. Sell that grand idea to an existing business for millions or live the good life using the proceeds from the quadrillion sales you make in the first year.
Oh, who are we kidding?
We all know the odds of anyone becoming rich from their idea are minuscule. Still, some people make it big, so why not you?