Part One was intended to caution you. In other words, don’t quit your day job. However, let’s say you really do have an idea that seems like a winner. If you call me or any of us at Par Aide (and I hope you do) here is how our conversation will go.
Me: So you have a new idea for golf? Why do you think it is a good idea?
You: I am not aware of anything like it in the industry. Everyone tells me it is great.
Me: Is it related to golf course maintenance or to be used on a golf course?
Me: Can you tell me about it?
You: No, not without a non-disclosure. (see Part One)
Me: Okay. Let’s dance around it a bit.
- Is it for maintenance or the golfer’s use?
- How many would a golf course purchase if it’s a good product?
- Do you have a patent pending? A prototype? Design drawings?
- Do you have an idea of what you think an end user would pay for it?
- Do you have any idea as to what it would cost to make?
- What are you looking to get out of this idea? Outright sale? Royalty? Or, some other arrangement?
At this point, I again appeal to their interest in simply trusting us not to steal their idea. Most times they do and I am proud to say that we have never and will never steal someone’s idea. In fairness, there might be someone out there who thought we did; only because we were not believed when we told them that this was an idea we had been contemplating or seen before.
So now, our inventor has decided to trust us and identifies his idea. As soon as/if it sounds familiar I will interrupt and talk about what I think it might be. If it’s not familiar and just might have some potential, the next conversation involves compensation. This goes where it goes based on objectives of inventor. (We truly wish that the inventor did have patent protection at this point because then the negotiation starts with what he/she wants.)
Rather than get into this in detail, please allow me to offer some thoughts on expectations.
We are in a small industry. With only 35,000 +/- customers in the world, you can easily predict the total potential sales if every customer bought the maximum, which of course is not going to happen. To determine what is available to you as a royalty or in projecting an outright purchase price, we need to consider likely market price (how much would a customer likely be willing to pay for this) and the cost to produce it. Remember, any royalty or amortization of a purchase is considered a cost. Do the numbers work? Can Par Aide achieve a reasonable margin? Is the product so good that we can live with less?
Finally, it all boils down to trust. Whether it is us or some other person/company, you have to trust them.