Turning your IP into money-making products and services is the goal of licensing. It’s a money-making process, not a legal process (although protecting your IP is a legal process). But it requires learning what the right steps are and when to take them. And most important, it requires understanding what you must do to make your IP irresistible to a potential licensing partner.
Remember, the number one issue for a potential licensing partner is how they make money with your IP. If it doesn’t work, it’s not going to make them money. You’ve got to show licensees that it does make money. One of the best ways is to test it out with customers. The more money it makes, the more irresistible it will be to a potential licensing partner.
You must show how much it costs to deliver your IP to the marketplace, how many potential customers there are, and how much profit will be generated by your IP.
If you know how much money it will take to deliver your IP to the marketplace, how many customers are expected to buy the item over time, and how much money it will cost to produce the product, then you know how much money you have to sell to the licensee (ie. how much money they will make if they manufacture and sell the IP).
For example, if you show the licensee that your IP will generate $20 million in sales over the next 5 years, and at a 15% profit, you are offering the licensee $3,000,000 in profit. You now have the makings for a big licensing deal.
Often a little creative exploration can discover new uses and applications for your IP beyond its current product or technology form. By figuring out new ways of using your IP, you can find a treasure trove of money-making opportunities. Sometimes it’s not your patent or brand that’s most valuable, it’s what you know or how you do something.
Licensing can be challenging, especially if you don’t know what to do or how to do it. But if you’re prepared and equipped with the right tools for the challenge, you have a shot at landing the licensing deal. You’ll collect royalties while the licensee does all the work and takes all the risk.
Unfortunately there is not a lot of information on the money-making side. Most information on licensing focuses on the legal side. That’s an important part, but the core of licensing is a process of doing certain tasks to find a licensing partner to license your IP and pay you royalties.
That’s why I’m offering a never released audio training course, The Money vs. Legal Side of Licensing at a special deal to my newsletter subscribers. Not only does this training open your eyes to the important difference, it also teaches you the specific steps to the money-making side. You can learn more about this training at the link.
Here’s a quick preview of what’s inside “The Money vs. Legal Side of Licensing”: