7 Steps to Turning Your Idea or Invention Into Cash

7 Steps to Turning Your Idea or Invention Into Cash

Goofy cat photos, pet rocks and a farting app: All are simple — and dare we say dumb? — ideas that reportedly made their creators millions.

Do you have a fabulous idea? Great! But that is just the first step on the path to riches. If you’ve got a great idea percolating in your head, you need to act now before someone else does.

Follow these steps to turn your idea into reality:

1. Do your research

Before you spend time or 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 the U.S. Patent and Trademark Office’s website and search for existing patents.

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 three below.

2. Develop a business plan

The second step is to create a business plan. Even if your idea isn’t fully formed yet, 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 unsure where to start, you may want to arrange an appointment with SCORE, a nonprofit organization through which business people volunteer to mentor and advise small businesses and startups.

Another option would be to contact your local office of the U.S. Small Business Administration, or SBA, to see what services it offers. The SBA’s website provides a wealth of information about business plans, financing and other issues associated with startups.

3. File for a patent if applicable

The law regarding patents changed dramatically several 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 — a “first-to-invent” system. However, the federal law switched the U.S. patent system to a first-to-file system. It no longer matters who came up with an idea first. Instead, the 20-year exclusivity rests with the person who first publicly discloses the idea or first files for the patent.

TechCrunch published a good article on the law and how various scenarios play out. For further guidance, check out “7 Simple Steps to a Patent for Your Big Idea.”

But 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.

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 inventors club where you can connect with others who could suggest local resources.

Regardless of how you find help, you may want to consider using a nondisclosure or no-compete contract, especially if your idea isn’t patentable.

5. Get 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 also may help when it’s time to find investors.

As you near the end of the beta testing phase, try selling prototypes as well to better gauge customer demand.

6. Find investors

By now, you should have a polished prototype and hopefully some early sales to bolster the case that your idea is profitable.

The next step is to find some deep pockets willing to pay for large-scale manufacturing or deployment of your plans.

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 websites like Crowdfunder and Fundable. You can also visit the Angel Capital Association’s website 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.

7. Make millions — hopefully

Ah, time to enjoy the fruits of your labor. 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? The odds of anyone becoming rich from an idea are minuscule. Still, some people make it big, so why not you?

Do you have experience trying to get a big idea off the ground? Share with us in comments below or on our Facebook page.

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