Saturday, 6 December 2008

You have a million dollar idea but how to avoid an invention company scam?

Ok, you have your million dollar idea and you want to avoid an invention company scam. Look at the following tips how to do it.

1. Ask for their success rate: Ask for in writing the number of ideas they have represented and how many inventors made more money than they invested.
2. Ask for references: Ask for the names of three satisfied customers that you can talk to.
3. Avoid too much pressure: Are their sales people calling you often? Are you hearing, "Let's do it now/asap."
4. Are they sending you pre-signed confidentiality agreements in their "free kits": No, you sign agreements after you decide you want to use them or anyone else (but before discussion of any ideas).
5. Have they asked you to write your ideas down and mail them to yourself? That is not protection.
6. Early in your discussions, ask what the total cost of services will be. Any hesitation to answer is a bad sign.
7. Market evaluations provide an objective evaluation of the merit, technical feasibility, and commercial viability of your invention. Ask for their criteria, system of review, and the qualifications of company evaluators.
8. Do they check on pre-existing patents for your same idea. Bad companies will promote almost any idea, without knowing if there is patent infringement involved.
9. Do their "patent searches" come without a written opinion of patentability? Do they refuse to provide in writing the number of favorable patent searches vs unfavorable searches. You will want both.
10. Do they recommend that a design patent be applied for? Only a minority of inventions should fall in this category. Also watch out if they offer a "money back guarantee" if the patent does not issue.
11. If they claim to have a special relationship with a manufacturer, ask for proof. Watch out, if they ask you to submit your idea to a manufacturer before you have a patent.
12. Avoid a jack-of-all-trades. They send a "free kit" or in reality more advertising, then sell you a market evaluation package, and later a patent, marketing and licensing package. No one is an expert in all those fields.
13. Watch out for addresses that don't match, they claim to be in one state but the mailing address is different. Ditto for no direct phone contact, are you always reaching their voicemail?
14. Ask all the above questions and be on triple alert if your are responding to a slick TV, radio and magazine ad. Yes, the real guys have to advertise too, so know what to look out for.
15. Investigate the good guys too. Even if none of the above apply, call your local Better Business Bureau, check with the FTC and the bad guys listings under "Invention Company Scams".

How to You Make Money With Your Million Dollar Idea

So, you've had an idea for an invention or an innovative way of doing something that will boost productivity, put more people to work, and make lots of money for you and anyone who backs you? As you've probably heard, you're the kind of person your country needs to compete in world markets and maintain its standard of living. You're the cutting edge of the future.

You are another of those individuals on whom progress has always depended. We all know that it hasn't been huge corporations that have come up with the inventions that have revolutionized life. As the discoverer of penicillin, Sir Alexander Flemming, said, "It is the lone worker who makes the first advance in a subject: The details may be worked out by a team, but the prime idea is due to the enterprise, thought and perception of an individual." Innovators like you are business' lifeblood.

Owner-managers who have started companies on new ideas know first hand about the innovation process. They also know that you can expect to hear.

In the first place, the chances that you are the first to come up with a particular innovation are somewhere between slim and none. Secondly, even if you have come up with the better mousetrap, nobody — but nobody — is going to beat a path to your door. In fact, in the course of trying to peddle your better mousetrap, you'll beat up plenty of shoe leather wearing paths to other people's doors. You'll stand a good chance of wearing out your patience and several dozen crying towels as well.

Why is it so hard to find backers for your brain children? One consultant put it: "Nobody wants unproven ideas. Nobody wants to be first. Everybody wants to be second." Why this fear of the new?

Well, new product failure rates are estimated conservatively to be between 50% and 80%. One survey of major companies with millions of dollars to spend on R&D, market research, and product advertising, and with well-established distribution systems found that of 58 internal proposals only 12 made it past initial screening. From these 12 only one successful new product emerged.

Another group set up to help innovators has found that of every 100 ideas submitted 85 have too many faults to bother with. They can be eliminated immediately. Of the remaining 15, maybe five will ever be produced. One of those might — only might — make money.

With odds like 99 to 1 against an idea being a monetary success, is it any surprise that your idea is greeted with a chorus of yawns? People — companies, investors, what have you — are basically conservative with their money. Ideas are risky.

Does that mean you should forget about your idea? Of course not. It merely means that now you're beginning to see what Edison meant, when he said, "Genius is one percent inspiration and ninety-nine percent perspiration."

Again, those of you who own small firms started on innovations are well aware of the truth of Edison's words. You've been through the hard work.

In the first place, the chances that you are the first to come up with a particular innovation are somewhere between slim and none. Secondly, even if you have come up with the better mousetrap, nobody — but nobody — is going to beat a path to your door. In fact, in the course of trying to peddle your better mousetrap, you'll beat up plenty of shoe leather wearing paths to other people's doors. You'll stand a good chance of wearing out your patience and several dozen crying towels as well.

Why is it so hard to find backers for your brain children? One consultant put it: "Nobody wants unproven ideas. Nobody wants to be first. Everybody wants to be second." Why this fear of the new?

Well, new product failure rates are estimated conservatively to be between 50% and 80%. One survey of major companies with millions of dollars to spend on R&D, market research, and product advertising, and with well-established distribution systems found that of 58 internal proposals only 12 made it past initial screening. From these 12 only one successful new product emerged.

Another group set up to help innovators has found that of every 100 ideas submitted 85 have too many faults to bother with. They can be eliminated immediately. Of the remaining 15, maybe five will ever be produced. One of those might — only might — make money.

With odds like 99 to 1 against an idea being a monetary success, is it any surprise that your idea is greeted with a chorus of yawns? People — companies, investors, what have you — are basically conservative with their money. Ideas are risky.

Does that mean you should forget about your idea? Of course not. It merely means that now you're beginning to see what Edison meant, when he said, "Genius is one percent inspiration and ninety-nine percent perspiration."

Again, those of you who own small firms started on innovations are well aware of the truth of Edison's words. You've been through the hard work.

Will Your Million Dollar Idea Make Money? Here is where the risk arises that makes it so difficult to interest people in backing your idea.

It's a question that's really impossible to answer with any assurance. After all, major corporations even with massive market studies hit clinkers all the time. Remember the Edsel? On the other hand, an idea so seemingly stupid that you'd think it was somebody's idea of a silly joke might make millions. Don't you wish you'd thought of the pet rock?

So many factors need to be considered to answer this question. Is there a market? Where is it? Is it concentrated or dispersed? Could the size of the market change suddenly? Will competition drive you out? These questions are by no means the bottom of the iceberg. Yet, answering the money question to the satisfaction of potential backers is the key to the other questions.

Accoring to CanadaBusiness

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