Are you ready to start a new business because you have a idea for the next iPod, or a great new product everyone will want to buy? Not sure how to get started? What about legal requirements? and business funding? Here are eight tips to help you get started in the right direction.
What do your tell a friend or family member trying to create a business start up with a new idea or product?
Perhaps the first consideration is, can you make money and turn a profit with this idea or product?
For example, if you are considering offering a potential client a new software product, you have one time development costs, the client may not want to pay, if you re then going to make this a commercially available product and sell it to other similar customers. You therefore will have some investment or “sunk costs” (Sunk costs are dollars spent in a product, that you might not recover right away). Doing it at cost or as an investment is one model that some software vendors use. You then charge each user for perhaps usage or a flat annual fee. In other words, they pay for what the software produces for them. This means, if the software does not produce business, they have no costs.
What is needed to do this? You need to estimate the time and effort to produce your product? How many people will work on this? Are they seriously committed to it?
At the same time, you need to protect your intellectual property. Intellectual property is any idea protected by a copyright, patent, or patent application. You can really only start to market you idea or product once you have obtained a copyright or patent, so do this right away. You do this online, just submit your ideas to copyright office for a patent or copyright only costs about $150 to get started. If you can market your ideas with patent pending, then you are protected. Also get everyone to sign a Non-Disclosure Agreement (NDA), so if this gets out into the public market you at least have the ability to sue someone.
Here are several things you need to do:
1. Copyright. Document the design of your product and submit to copyright office for copyright, and patent.
2. Non-disclosure agreements. Prepare an NDA and get everyone you talk to sign it.
3. Contracts. Document in a Memo of Understanding, what each party will do and how they will share in and revenues, after cost.