The Idea Guide: How to Turn Inventions Into Profits

Trying to come up with an invention can feel like trying to buy a gift for your mother—what can you give to someone who already has everything? Another coupon for a foot massage?

Your mother, and the world, deserve more.

While it may seem like every great invention has already been created, that’s because it’s hard to want something that doesn’t exist yet. That’s why inventors are so important; they see the value in potential. Luckily, this is a skill that can be learned.

When brainstorming, here are some things to keep in mind:

  • Invention and innovation are two rooms in the same house. You don’t have to make something that is completely new; your invention can enhance something that already exists or make a daily task easier.
  • Empathy increases value. Deeply understanding the desires and needs of other people will help you to create something profitable—they will be your market. Being in touch with your own human emotions is the first step in identifying something that’s missing. What do you wish you had when you encounter a problem? What would make your life easier? What would save you time?
  • Good ideas take time! National Geographic explains how despite the glamorization of a “Eureka moment,” our most famous inventors took forever to make the products that landed them in history books.

How to Get Paid for Your Idea

Now that you’ve come up with your world-altering invention, we need to talk about profits. There are two main options for revenue:

1. Sell The Product Outright

Inventors and entrepreneurs have a lot in common but specialize in different sectors. Instead of coming up with an amazing product and maintaining a business, you can sell your product to a company that is already established.

Now, this doesn’t mean you get out of making a pitch deck or prototype of your invention, but it does mean that after you create something you’ve proven is profitable, the bulk of your work is done. Whichever company buys your invention is responsible for sustaining revenue. The key to selling your product outright is being able to prove to large companies that your invention will add value to their service. Kevin Mako’s article in Forbes stresses that an invention must go to the market and already have customers before a buy-out happens. You’ll need to create designs and prototypes, get investors, and prove that your invention is successful before the big payday. Buy-outs happen when an idea has physically manifested.

2. Enter A Licensing Agreement

Licensing is when you give another company legal permission to use your product or idea, but it still belongs to you. For example, when a song by Adele plays at the end of a movie, she’s getting paid to let them use her music. This compensation is referred to as royalties. A licensing agreement is similar to a sell-out (you still have to create your idea) but usually requires less marketing effort. Royalties are commonly multiple-time payments, which can turn your invention into a source of passive income.

Protecting Your Invention

A patent is essentially property rights for the inventor. It ensures that no one is able to make, use, or sell your product without consent. To sell your idea, you have to own it first. In the U.S, whoever patents an idea first gains the rights to that product—even if someone else previously invented it.

This crucial step is a big decision; patenting your invention will potentially cost thousands of dollars after the application, search, and examination fees. A temporary way around this is to file a provisional patent. Stephen Key, a business author, writes that PPAs are a cost-effective way to gain similar protection to patents. While the PPA application is being reviewed, it will have a status of “patent pending,” which is the same status as if you had actually had filed an application. Read more about PPAs and see if this is a good option for you here.

How to Patent Your Idea

In the United States, obtaining a patent happens through The United States Patent and Trademark Office. This website has tons of answers to the specific questions you may have, but once you know a patent is your next goal, this is a general outline of how the process will go:

1. Determine which type of patent your product needs.The options are utility, design, and plant. If your product is eligible for a patent, it will fall in one of these three categories.

2. Prepare to apply.Most people seek legal counsel at this point in the process because patent law is required. Although you technically can file on your own, there are plenty of people who do this for a living. You can find an agent or attorney to help you here.

3. Submit your application. This is exactly what information you’ll need to give when filing a new application. Once it’s completed, you’ll submit the documents online and pay your required fees.

After your application has been filed, you can check on its status by the serial number. Although this process will take a while to complete, once the application is approved, you’ll own the rights to your new idea. Now that you’re officially an inventor, you can sell that idea and get back to the drawing board.

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