Do you want to start a business researching ideas and selling them? If YES, here are 12 steps on how to make money buying and selling business ideas.
In this new age where innovation is the order of the day, new ideas are powerful tools for building careers and a substantial account balance. People are now on the lookout for ideas that can change their life story. Most people put a lot of thought to their ideas, but the fact that it is just an idea means that it is worth nothing. An idea is simply just the beginning. Many people are beginning to understand the difference between an idea and a business.
Putting together the idea is very easy but it is very hard to think about how you will price it, how you will get production going, how you will make a compelling sales pitch, how much, if any, they will be willing to buy, and, let’s not forget, how you will find the money to make this happen. All these and more are the challenges that are now pushing people to sell their ideas to companies that have the resources to actualize it.
How Profitable Is It to Buy and Sell Business ideas?
When starting this business, buying up ideas won’t be the problem but selling them. You need to know the ideas that will sell and how best to sell them. When selling an idea, it’s advisable you don’t talk about the idea itself. Although this might sound strange, but it is the primary sales rule that most people break.
No matter how much you love an idea, don’t forget that not everyone loves the same things as you. And when you’re selling your ideas to others, you can’t focus on your preferences. Instead, you have to focus on the other person. The first thing to do is to forget about yourself and how excited you are about this great new idea or concept you want the company to implement.
If you’re going to sell your idea or concept, you need to note where the other person’s personal pain is. Once you know the other person’s pain, you can position the idea or concept you want to sell as something that can solve the pain.
In other words, you have to show the CEO, CFO, board, or whomever you’re selling to that there’s a direct payoff for them if they approve your idea. Below are factors you need to consider if you want to make money buying and selling business ideas.
12 Steps on How to Make Money Buying and Selling Business ideas
- Build and sustain Credibility
One thing investors weigh when considering an idea is the person who has the idea, rather than the idea itself. If you lack a good and concrete track record, you’ll probably be seen as a bluff. This does not mean that you must have already built a company before you can ask somebody to invest in one or buy the idea.
It simply means that your idea is more likely to get the attention it deserves if you’ve been a departmental manager. Buyers tend to ask themselves: ‘Is this person competent, based upon past performance?
2. Buy ideas you can sell
The act of buying is always emotional, especially when the commodity being considered is a business idea. People get excited when an idea makes intuitive sense, when it appeals and attracts them. This is far less likely when an idea seems totally off the wall.
That is why when selling to somebody a new idea, you have to persuade them that the idea confirms their own opinions, rather than proves them wrong. Also any idea you’re buying should make people feel they’re doing something positive and powerful if they decide to invest in your idea.
- Research the industry and know the idea before buying
Have it in mind that idea’s feasibility relies upon its uniqueness, newness, and relevance. You should consider talking to industry experts you know in person or via professional networks, read professional journals, and catch up on the latest industry news. You should have answers for the following questions:
- Has anyone already implemented the idea? If they weren’t successful, is my version better?
- What is the concern of top industry competitors?
- How lucrative are the markets and opportunities in this industry?
- How fast does this industry make decisions and change?
- What other industries or products are related to this industry?
- What problem does the idea solve?
- How many people can benefit from this idea?
- What other solutions currently exist?
- Figure out what people are willing to pay
When researching the industry and probably talking to your potential customers, try and figure out what they might be willing to pay for your solution. This can be pretty tricky, because ideally everyone wants everything for free. But note that you can also employ some tricks when asking, instead of just asking outright.
You can start by looking out for competitors in the market, you can look at their pricing and then decide how you want to price or sell the idea. You can also look at the value you are providing to the buyer and create a price based on that. Also when you have a price in mind, don’t forget to ask your prospective customer if they would buy your idea for your price.
- Focus Your Story to the Listener
Decision-makers tend to see ideas from their own perspective, so your idea should be directed and modelled in terms that address the practical business concerns of the potential buyer. If you’re talking to a tech-head, talk technology. If you’re talking to an accountant, focus on ROI. Have it in mind that this is very necessary, because investment decisions usually involve a team of people, each with different expertise.
- Put together your hard boundaries
For any idea you buy and want to sell, there must be limitations that you are not willing to overstep. It may include your reservation price, which is the lowest amount of profit you are willing to make before you walk away from a deal. Hard boundaries might include
- A timeline: how much time are you willing to dedicate to this idea?
- Industries: are there any companies or industries you are not willing to work with?
- Finances: how little money will you be happy with, and how much money are you willing to take?
- Values: which of your idea and beliefs are you willing to change in order to sell? Do you care most about the impact, profit, or relevance of your idea?
- Research and know potential buyers
You can find buyers through word of mouth, online research, industry connections, and personal connections. Personal connections help a lot, including the industry experts who helped you earlier in the process. Cold calling and emailing can also be effective. Try to listen to the opinions of those who turn down your idea and see if you need to improve or target different buyers. Keep a long list of potential buyers in case you need to go back and adjust your strategy.
8. Make Buying Less Risky
You need to understand that once somebody has decided to buy, their mind automatically starts looking for reasons not to do so. This is why experts advise you don’t wait for the inevitable defenses. Instead, anticipate problems and objections in advance and be ready with a convincing response.
For instance, if the objection is “we did this before and it didn’t work,” be ready to articulate how your idea is substantially different. Note exactly which factors and circumstances make it more likely to succeed.
- Create Momentum
It’s very important that you ask for feedback frequently throughout the dialog. The best part about this is if you continue to check for agreement, the buyer will often pre-emptively close the sale by saying something like, when do we start?
But if the buyer doesn’t do this, however, you’ll have to ask for the next step. Summarize your idea and ask a few final questions to ensure that the idea-buyer agrees it’s workable. If you get agreement, you have the green light you need to move forward. So the next question is: “When can we bring this to the other partners?”
- Brand and Sell yourself
Do not forget you are the only voice for your product at the moment, which is why your attitude and personality are very crucial to selling your product. Always be professional and confident, while still showcasing your personality and passion for your idea. Always keep your pitch simple and straightforward.
Avoid overly-technical jargon, especially when your audience will not understand it. Experts suggest you tell a story by incorporating numbers. For instance, you can tell a story about a potential consumer needing a product or service in his or her everyday life, then add in statistics to show how many consumers would find that story, and your product, applicable.
- Stay within your hard boundaries and do not accept an offer immediately
If you cannot sell without crossing a hard boundary, do not be scared to say no or walk away. There are other buyers you can convince if your boundaries are reasonable. Ask for as much time as you think you need to process the offer before signing anything.
12. Make the Sale
After you must have gotten all the information and prospects list you need, how do you know you’re getting a good deal? You have to understand there are no set rules or terms when it comes to negotiating a deal. The perfect agreement is one that gives both you and the other party exactly what you want.
Therefore the terms are completely negotiable and can vary dramatically. Don’t forget to set realistic expectations. In other words, don’t expect a million-dollar deal–it’s doubtful you’ll retire after selling a few ideas.
In this sort of business that looks simple from the outside, it can be tempting to dive in at the deep end and build your complete business the way you imagine it will be. After all, you want to realize your vision that you’ve been working so hard on. You’ve been talking to potential customers and selling them on your dream, and now it’s time to make it real. But no matter how you see it, try and resist this urge.
Have it in mind that starting small and continuing to gather feedback from customers is a major component of growth in the business world. Note that with a smaller start, you will be able to alter direction faster and react to customer feedback quicker. Starting small also gets your solution out into the market quicker.