Whether your goal is to land a licensing deal with a major manufacturer, sell your product to Walmart, or find an investor with deep pockets to fund your project, you will need to create a proposal to convince someone to do something.
Your proposal must convince your target that your product will benefit them somehow. Entrepreneurs lose sight of this when trying to sell or license their products. No one wants to know how cool or great your idea is, they want to know that people will buy it.
Step 1: Research your target
You first need to determine what your target’s needs are by researching their history from beginning to end. You can generally find a summary of a company’s history at the library in the periodicals section or online. You can search Google, Yahoo, or go to Hoovers.com. You can also locate the company’s website and look up their ‘about us’ page. Look at their press releases, especially the most recent ones.
Through these sources, you can determine the direction a company is going, and whether or not your product fits their current or future product line.
Step 2: Locate the decision maker
Find out who the key decision makers are. This is usually the product manager, Vice president, President, or owner. The best way to find out who is in charge of licensing or adding new products to a company’s product line is to call and ask. Many companies have departments for this now.
Whether it is a department or individual, someone is waiting for your call. Most companies are looking for new products, and even if your target company is not actively seeking out new product ideas, No one will turn down a money maker. Good ideas never have a hard time finding a home, especially if they come professionally presented.
Step 3: How to contact your target
After you have researched some companies in your preferred market and determined which ones you want to present proposals to, begin contacting them. Phone calls are more effective and quicker than emails. Call and ask for the name of the person in charge of adding new products to the product line. Ask the name of every person you talk to, starting with the receptionist. That way, you can say, “Hello Mr. Downs, Marianne said that you are the person to talk to about adding new products to your company’s line.”
If you do this in a natural tone, it comes across as a referral from Marianne. Now, you do not want to be dishonest, but perception is quite important, and you want to appear confident and in the loop.
Step 4: Making your initial pitch
Once you reach the right person, introduce yourself, and say, ” my company has developed an item that we feel will fit your current product line. What is your protocol for reviewing potential new products?” Then just listen and write down all the key information and follow it to the letter.
To avoid feeling intimidation if you have never done this before, keep in mind that they are hoping to receive a phone call from someone who really does have a unique money maker that will increase their company’s revenue and make them look like trend spotters.
So tell them that, “I believe this product will significantly increase your company’s revenue.” Every company loves to hear that phrase, and it immediately piques their interest. Now you can tell them what product category it fits into, but you do not need to describe your invention.
Step 5: Confidentiality Agreement
Ask him/her to sign a Confidentiality Agreement, or he/she may ask you to sign theirs. Either way, enter an agreement that says that you will show them confidential information to be considered for their company’s product line.
Step 6: Send your proposal
Now you can send your proposal with the comfort of knowing that:
1) they are expecting it,
2) they want to see it, and
3) they are not going to steal your idea.
Always remember to be professional, well informed, and flexible to negotiate. Send your package with a cover letter restating what was discussed. Stamp or print ‘REQUESTED MATERIAL’ on the package, and then call to let them know that it is on the way. Contact the company about two to three weeks later, plenty of time for them to review, digest, make judgments, and arrive at conclusions.