How to Turn an Idea into Money

With a little bit of direction, many good ideas can be turned into a moneymaker---only in America could products like the Pocket Fisherman enter the public consciousness. But a good idea is not enough. To have any hope of getting your product on the shelf, you must combine several roles---fundraiser, marketer and promoter---while preventing others from encroaching on your idea. How well you juggle those tasks and their overlapping demands will go a long way toward determining if you will succeed in the marketplace.

Size up the Competition

Do your homework. All successful products promise to solve problems or resolve an unspoken need---such as the idea of cooking perfect hard-boiled eggs. If multiple versions of your dream exist, you must work harder to stand out from the pack or rethink the premise.

Make sure that your idea truly has mass potential. As 1970s and 1980s late-night guru Ron Popeil notes, to have any real chance, new product ideas must appeal to plenty of people. Otherwise, the upfront investment will be difficult or impossible to recoup.

Do a trademark search to determine whether similar products have been patented and what they are called to avoid duplicating a successful item that already exists. This can be done checking the searchable database in the U.S. Patent and Trademark Office's website (see Resources).

Run for the Money

Determine how you will fund your idea. Ideally, you will draw a schematic and build a prototype yourself. Otherwise, you will need to hire people to handle those tasks. You also need to budget the cost of meeting investors or manufacturers who may be scattered across the country, but will likely expect you to meet them personally.

Secure a conventional bank loan or line of credit. If this is not feasible, consider a U.S. Small Business Administration loan, tapping credit cards and savings or turning to family and friends. No matter what route you take, your basic task---convincing someone that you actually have a potential moneymaking idea---does not change.

Research how consumers will react. To prove yourself, you will need hard data to back up your gut instincts. This will require absorbing yet another cost---hiring a market research firm, whose teams can provide a more professional approach and help sharpen your pitch.

Devise a marketing plan for your product's distribution, advertising, sales and promotion. This should coincide with the writing of your business plan, too, as it is the key outline of how you expect your idea to turn a profit---and how your company will grow.

Prepare for the Pitch
Develop a pitch that supports your vision for the product. Keep the hard facts upfront---manufacturers are in business to make money and want to know how your idea will accomplish that goal. Your success or failure depends on how well you answer the unspoken question, "What's in it for me?"

Get plenty of rest before the big day---and time to rehearse your pitch before giving it. If you work with a partner, determine who will cover specific areas and answer certain questions. To avoid last-minute embarrassments, always double-check key facts and figures.

Outline a plan for the most logical media outlets to advertise and publicize your product, particularly trade publications, conferences and seminars. Although it may seem daunting to be promoting a product that is not available, this step is vital in showing your commitment in getting it on the shelves. Potential investors will also expect you to answer these questions, too.

Tips & Warnings

Create a blog and website---once you have determined your plan of attack---to capitalize on any initial buzz that your idea creates. Word of mouth from future buyers is the best way to market or fine-tune new ideas. Simplicity is the best policy. Many products failed because they required too much effort from the consumer, such as the Prescolator---which merged a coffee pot and a steam iron.

Carefully consider the total percentage of your business that you will give away. Half of something is better than all of nothing, but do not grab a deal that seems below what you will accept. Never sign a document without proper legal advice.