When starting a new business, entrepreneurs often overlook licensing as part of their business plan. This can potentially be a fatal mistake. As an entrepreneur, you must know how to protect and monetize your intellectual property (IP) and monetize it. One of the most effective ways to do this is through licensing your IP. This blog post will discuss why licensing must be part of your startup business plan.
Licensing Can Amplify Your Revenue
Licensing allows you to leverage your intellectual property and generate revenue from it. It is a way to tap into potential streams of income that may have been overlooked otherwise. Licensing allows you to enter new markets, generate income from complementary products, and reach new audiences. You can explore revenue streams beyond your core distribution channels by licensing your intellectual property.
When I was at the studios, merchandise licensing generated millions of dollars in royalty revenues. And this revenue came from products outside the studio’s core business of movies and TV shows. It increased the total revenues generated from the entertainment property and provided additional promotional support through product exposure on retail shelves nationally.
Licensing Reduces Risk
Licensing helps you reduce the risks that come with starting a new business. Creating partnerships and collaborations with other companies reduces the risk of going it alone. For example, you may want to collaborate with another company with expertise in your industry. This collaboration could open doors to new opportunities and markets that might otherwise be unavailable.
Licensing Protects Your Intellectual Property
Licensing your IP is not just about generating revenue. It also helps to protect your intellectual property from infringement. Licensing allows you to control how your IP is used and avoid any unauthorized use of your brand, products, or services. In addition, licensing helps you to defend your IP against infringement and, with licensee support, take legal action if needed.
Licensing Opens Up New Markets
Licensing can open up entirely new markets that might be out of reach of your existing business. For example, if you have a software company, licensing your intellectual property to a hardware company could broaden your market and reach a wider audience. By licensing your intellectual property, you free up resources to focus on your core business while still generating income from complementary products and services.
Licensing Creates Brand Awareness
When you license your intellectual property to other companies, you create brand awareness and recognition for your brand. Licensing helps increase visibility and reach because your brand is seen in different markets and audiences. This increased visibility can help to build your brand and reputation, which will help your core business grow.
Summing it Up
In conclusion, your IP is the core asset of every business and startup today. Leveraging its revenue potential is an important part of your business strategy. Licensing helps you generate new revenue streams, reduce risk, protect intellectual property, open new markets, and create brand awareness. By licensing your intellectual property, you can explore opportunities that might otherwise not be available to you. Licensing is a low-risk, high-reward strategy enabling you to monetize your IP while focusing on your core business. So, if you’re considering starting a business, include licensing in your business plan.
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