Commercialise your idea
Where would Australia be without the Hills Hoist, the Black Box flight recorder and the two-stroke lawn mower? They are innovative products that literally changed the landscape of the country.
Yet they would not exist without good advice, commercial appeal, and most importantly, protection of their intellectual property.
So when your innovation or invention has commercial potential, do you also have the business skills to take the end product to market?
Before you sell your goods or services
Many great ideas fail to succeed due to a lack of funding, failure to register your unique idea or invention, or even the timing of your entry into the market. Consider these vital aspects before you find a market for your invention:
- Capital vs commercial – making a sound business plan is at the core of knowing if your innovative product or service is commercially viable. Read about how to develop your business plan. Conducting market research is also important to understand if there is a gap in the market or product demand before you commercialise your idea.
- Licensing and trade marks – you can sell or license the intellectual property of your invention for a financial return. Read about the benefits of selling and licensing your IP or registering a trade mark to have exclusive rights to your goods or services.
- Identify gaps in the market that provide you with a niche area to sell to.
- Find out the basic legal issues before starting your business.
Sell and license your IP
One of the benefits of owning intellectual property (IP) is the ability to assign (sell) or license rights. This can generate revenue during the registration period. By registering and protecting your IP in this period, you’ll be able to increase its sale value, much like traditional investments.
Assigning (selling) your IP rights to another company is relatively easy. Licensing needs agreement on the conditions of use between both parties. Licensed rights can be exclusive or non-exclusive, and gives the licensee the ability to use (but not own) the copyright, patent, trade mark, design or plant breeder’s right.
Payments for use of IP can be in the form of royalties or one-off payments, with the value of the rights placed into a commercial agreement.
You should be aware that IP is treated as an asset for tax purposes. This means that if you generate revenue from it, there may be tax implications. It’s recommended you seek professional advice from an IP solicitor, accountant or business advisor before selling or licensing your IP, to decide what is right for your business.
Testing an innovative idea
Consider these eight tests of an innovative idea before moving to the commercialisation stage:
- Valuable benefits - Does the innovation provide benefits that are clearly superior to existing alternatives? Can you articulate the 'value proposition' of what is new and innovative to your customers?
- Scale up the innovation - Can the innovation be mass produced with consistent quality to satisfy the market need?
- Marketing research and strategic market planning - Have you assessed demand and do you have a channel to the consumer? This includes design, branding, pricing, distribution, sales, and other factors. Have you updated and included your marketing plan? Read our Market Research topic to get started.
- Leadership team - Do the key people in this innovation have the knowledge, skills, experience and courage to take it through to commercialisation? Our innovation topic includes further information on commercialisation and how to get your idea to market.
- Intellectual property - Do you have control over the intellectual property for the innovation? Have you registered your IP rights or secured them through licence arrangement?
- Return on investment - Will the innovation generate enough profit to make it worthwhile? You need to consider risk and the time the innovation will take to implement.
- Corporate social responsibility - Will the innovation have financial, environmental and social benefits?
- Strategic fit - Is the innovation consistent and aligned with your business's overall business strategy?
Find out more
- Find out more about assignment and licensing of IP rights on IP Australia's website.
- Read the steps to commercialising your IP on the IP Australia website.
- Take your products, processes and services to market with expert advice and matched funding via the Accelerating Commercialisation program.