You may think that because you’re an individual and not a business that practicing poor business decisions isn’t that detrimental. You would be wrong. I’ve worked with many inventors over the years and I can promise you, the ones who back out of contracts and treat people poorly rarely get very far. Here are a few business tips for the inventor.
Business Tip for the Inventor 1: Backing out of Contracts Is a Bad Idea
I recently had to deal with a client who wanted to re-negotiate my licensing agreement just before we signed the agreement with a licensing company. Not a good thing to have happen at the eleventh hour of negotiations.
Here are a couple of things to keep in mind if you are considering using a licensing agent.
You want someone who is touch and on your side! But you can expect someone who is tough in negotiations FOR you to also be tough in negotiations WITH you. A shark is a shark.
Cheating your agent at the last minute sends a pretty clear message to the new company that is considering licensing your product. And it’s not a complimentary one.
A good agent isn’t going to tell the licensee what you have done, but trust me, he/she doesn’t need to say a thing.
Licensing agents and licensees frequently have ongoing working relationships, so when the agent is suddenly gone from the picture, the licensee connects the dots. Your impulse to stiff your licensing agent to save a couple of bucks is just bad business. It will certainly lead to fall-out with your agent and, quite possibly, tank the deal and your reputation. Those are hard to come back from.
Business Tips for Inventors 2: Treat the People Working For You With Respect
That sounds like a forgone conclusion, right? But it always surprises me the number of people who think screwing over the people helping them is a good idea.
I work hard for my clients and I don’t get paid until they get paid. It isn’t unusual to spend two or more years getting a deal done. When you have a contract with a licensing agent, waiting for him/her to do the heavy lifting, then trying to re-negotiate is a bad idea.
Licensing agents can assist with introductions to the right licensee. They also help finalizing the definitive licensing agreement to your advantage. And work to get you in touch with engineers and attorneys. These items are crucial to success. Their experience is invaluable if you are unfamiliar with the invention world. That experience deserves consideration and respect.
For more information on taking an idea to market, check out the Inventor’s Galaxy Guide.
And if you have an idea that you are ready to move on but need funding options, check out Archimedes’ Offspring.