How do I produce a prototype while protecting my ideas?
If you’ve invented a new product, you should protect your design with a patent. This will register the idea as yours, and enable you to take legal action against anyone else who uses it.
It won’t normally be necessary to produce a prototype prior to obtaining a patent, but if you need to provide your designs to a manufacturer before your patent has been granted, it’s a good idea to make them sign a non-disclosure agreement. This is basically a promise that they will keep your design a secret, and only use it for the designated purpose of producing your prototype.
Prior to ordering a prototype it’s best to seek legal advice from an intellectual property specialist.
Any tips for advertising on a budget?
First, make the most of free or inexpensive advertising opportunities. You can often list your company in local or online business directories for free, and this can boost your search engine traffic. Regional newspapers also provide a cheap way to target local customers, and adverts on public transport can be less expensive that you might imagine.
Getting leaflets and flyers produced is an inexpensive way of making your advertising budget go further. You can distribute them at events, put them on community noticeboards, stack them in pubs and shops, hand them out in the street or put them through letterboxes. Also consider merchandising and branding your business vehicles for maximum visual impact.
How will unemployment rates affect the growth of my business?
Unemployment rates can affect your business growth prospects both positively and negatively.
Higher unemployment means there is a higher demand for jobs. So if you need to employ new staff you’re likely to have a larger number of candidates to choose from and you will have a stronger position in salary negotiations. You’re also likely to retain staff for longer, as they’ll find it harder to move to another job.
Alternatively, if your customer base is affected by unemployment, this will reduce their income and therefore reduce your sales, preventing growth. Customers may also be tempted to shift down to lower cost, lower quality products. However, high-end luxury goods won’t necessarily suffer, as the top end of the market is less likely to be affected by unemployment.
Should I pursue a government contract?
Bidding for government contracts can be a good business strategy, as these come with the promise of a reliable client and can offer some large scale and lucrative opportunities. However, there are many different types of government contract and they should be approached with as much caution and diligence as any other opportunity.
Before spending too much time and effort pursuing government contracts, consider whether you’re up against more experienced competition, whether you’ll be required to have a track record of similar projects, and any other prerequisites of bidding. Assess whether you’ll be able to fulfil the contract, and whether you have the resources to sustain your business until the payment date, which could be some time in the future.
Should I license my product?
Licensing a product can be the quickest, easiest way of getting your great new idea into production and into stores. The main advantages are being able to utilise another business’s manufacturing facilities and established status as a supplier. So if these are things that your own business lacks – or if you haven’t even started your business yet – then licensing is probably the best option for you.
Make sure you protect your idea with a patent and that you get the licensee to agree to firm limits on how they can use your designs. You should also negotiate terms that allow both you and the manufacturer to make reasonable profits if your product is a success.
Can participating in trade shows grow my business?
Yes, if you choose the right events and make the most of the opportunity.
One of the main reasons for participating in a trade show is the footfall. You will get a steady stream of potential customers who are much more likely to be interested in your product than an average high street shopper. Therefore, choosing the trade show that’s most relevant to your business is important. You should also invest in an eye-catching stand that reflects your brand.
Trade shows can also offer an opportunity to learn from your competitors, share new ideas or even enter into a mutually beneficial partnership to develop new products and services.
Should I ask customers for reviews?
Asking for reviews is generally a good idea, as they build customer confidence in your products and services, drive sales, decrease returns, build trust and loyalty in your brand, and give you a great source of customer quotes for marketing.
Robert Cialdini’s principle of “social proof” describes how this decision-making behaviour works: if everybody else is doing it then it must be OK. Reviews help to drive sales since customers that read positive reviews are likely to follow suit, because it seems like a safe course of action and it’s easier than doing a lot of research for themselves.
There is a degree of risk involved, of course. There will always be instances where customers are displeased with your service or product – no matter how good it may be. How you respond to unhappy customers is absolutely crucial.
What are the pitfalls of expanding a business too quickly?
The two major potential pitfalls of rapid expansion are taking on board work that you can’t fulfill due to a lack of skilled staff or resources, and using up all your investment capital without generating returns. Either one of these has the potential to destroy your business, either financially or by reputation.
To avoid these pitfalls, the first step is to develop your business plan based on sound market research. If you’re expanding into new products or a new location, check that the market you’re targeting is sufficient to provide a return on your investment. Anticipate difficulties, plan and budget carefully, and consider whether internal growth or a merger would be more likely to achieve your business aims. Last but not least, don’t neglect your core business.
How do I donate business sales to charity?
You’re free to donate any amount of your business sales to charity in whatever way you like. This could be a one-off, seasonal or monthly donation, or could be a fixed sum per sale.
However, if you intend to claim tax relief on your charitable donations, they must not be paid in the form of dividends (a share of your profits). You also can’t place any conditions on the charity, and you should take care if you or a connected person is involved in the charity or could benefit from your donation.
If you want to use your donation as a marketing tool, ensure you’re honest about how much and how often you make charitable donations, and specify which charities you support.