Hi, I’m Doug Pat and this is How to Architect Anything series, part 7, what are your goals and how do you achieve them. Unless you’re in business for purely altruistic reasons, you’re doing it to make money.
So, number 1 goal, come out of it without owing more money than you make. If you’re not wealthy, you’re going to need to borrow money because to make money, you’ve got to spend money. So, when you borrow money, start with friends and family. Although this can be pretty stressful, it’s definitely better than a bank. Now, if those 2 options don’t work, go to angel investors. And if you can't get money there, or you’re looking for some big time cash, get venture capital.
Number 2, you make and sell the product yourself to make money. In today’s day and age, this is definitely possible. And it’s what I’ve done a number of times. Websites like mfg.com or ponoko.com allow you to get bids for your product from manufacturers all over the world. But remember, manufacturing of the finished product is just one aspect of the process. You still have to consider packaging, skews, inventory, marketing, shipping, payment, and sales, just to name a few.
Your 3rd option to make money is to license your product. Now, lots of companies are always looking for good ideas. And they don’t want the responsibility maintaining or defending intellectual property. They’re simply looking to use your idea. Perhaps, they’ll make the products themselves and sell it while they provide you with the royalty.
A 4th goal might be to sell your company. Now, your company may consist of something as simple as just intellectual property. Or it could be that your company is been around the long time and it includes significant assets like offices, inventory, equipment, lists, branding, IP, etc.
Finally, a 5th goal and an unlikely scenario is simply to sell just an idea. The idea may or may not be protected by Intellectual Property. I’ve heard of people that have just sold ideas patented or not but it’s pretty rare. When I first started the product development in business, I thought that’s exactly what I was going to do, sell my ideas. But it doesn’t happen that easy. At the end of the day, what makes your product valuable if the work you put into, the testing, the prototyping, branding, packaging, intellectual property, and the debt and revenue associated with your product or company.
So, that’s a few tips about setting goals and making money. We’ll see you next time.
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