If you’ve developed a new product idea, but don’t have the resources or funds to develop or manufacture the final product, you may look for a partner or investor to take the product forward. In some cases, you may seek a licensing agreement giving a company the right to manufacture and market your product. Alternatively, you may approach investors to provide funds that enable you to produce the product yourself.
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- Moderately Challenging
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Plan your presentation carefully so that you understand the requirements of the company you are approaching. Prepare to answer questions on all aspects of your product and its market opportunities. The television programme “Dragons’ Den” reveals the type of questions potential investors ask entrepreneurs. Visit the company’s website to build a picture of their existing products and markets, and to identify gaps that your new product idea will fill. Put together an outline business and marketing plan with comprehensive costings so that you are ready to deal with questions.
Prepare the presentation format. Put together design sketches, models or prototypes, depending on which stage of product development you have reached. Produce PowerPoint slides or flipcharts to present statistics and detail about the product and the market. Write and rehearse your presentation and put together a list of likely questions that you might face. Contact the company to arrange a time to present your ideas. Explain how you will present your ideas so that the meeting takes place in a venue with suitable presentation facilities.
Introduce your product. Describe its main features and explain how potential customers will use it. Show how your proposal is relevant to the company’s existing product line and demonstrate why it will fill gaps in the range or provide new opportunities for the company. Set out the market potential for the product, estimating sales volume and market share in the short and longer term. Explain why the new product will out-perform competitive products and indicate whether it will take share from existing buyers or create a new market sector.
Outline the estimated development and production costs to create initial supplies. Indicate any necessary investment in special manufacturing or quality control processes. Compare the target selling price with production and marketing costs for different sales volumes to indicate profit potential.
Take legal advice before negotiating terms with a prospective business partner. Ensure that you protect your rights in the product by asking the company to sign an agreement that prevents them copying your idea. Discuss the terms of a licensing agreement that will provide you with a royalty on sales from the company.
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