Do you have a brilliant idea but you lack finance to take it to the market? If YES, here is how to pitch and sell a business idea successfully to a large company.
So maybe you have a great business idea that is bound to yield loads of profit in the interim or in the long run, but you do not have what it takes to put the idea in the market, then maybe you need to go the licensing route.
Licensing in business means selling your ideas to a company that would develop it fully. But you have to note that pitching business ideas to large companies or conglomerates is very different from pitching to angel investors or medium scale companies.
From research, it has been discovered that large companies hardly license ideas because ideas are worth nothing unless they are produced and marketed. They subscribe to the saying that ideas are a dime a dozen. If you can think of an idea, so can a thousand other people too. People are generally rewarded for building things and not just describing an idea over the phone or via an email.
Because of these complexities, it is really difficult to sell an idea to a company and get them interested enough not to slam the door on you. So, if you must pitch your brilliant idea to a large company, and you want to make sure that they not only like it, but that they commit to buying it over or funding the creation, then there are certain steps you must follow.
But before you launch out for the pitch, you must ensure to do the following;
3 Preliminary Steps to Take Before Approaching a Company With Your idea
a. Dig, dig, dig
Research is the very first thing to do when daring to undertake a new venture, as such, before you make any approaches to your selected company, you need to find out all that there is to know about the company. You need to know if the company would agree to accept your kind of idea, and if the idea fits in with the company’s product or service line, if the idea solves any major problem for them that would make them want it, who the managers are and their likely temperaments etc.
b. Determine if your idea is patentable
Generally, ideas cannot be patented because ideas are nobody’s exclusive property, and there is a huge likelihood that someone else may have also had such an idea. But if you have gone a step further by putting together the product, then you can now determine if the product is patentable. You need to determine if the product can be produced and marketed without infringing on another person’s right. You can start your patent search from uspto.gov
c. Check production details: You need to learn and understand the full production details of your invention or idea. You need to know whether your idea requires special materials and how much the materials in question would cost.
3 Details to Note When Pitching an idea to Large Companies
When preparing to make a pitch to large companies, you may feel nervous, which is normal, after all, this could turn out to be the big break you have been looking for. Before you proceed, these are some of the things you should know about large companies;
i. They are extensively bureaucratic
Large companies have processes, procedures, red tapes and they set up committees for just about anything and everything. Because of all these processes, the decision making wheels of large companies turn very slowly. Learn not to put all your faith in them because they usually do not follow through, and you need to have a lot of patience when dealing with them.
ii. They are very cautious
You have to note that employees’ at large companies hate risks as nobody wants to get fired on your behalf. If the decision makers at the company perceive even the slightest risk, they would abandon your idea faster than a hot potato. In this regard, you have to make sure that your ideas have no loopholes that can present any risk to them.
iii. They want solutions and not ideas: These CEOs want nothing but turnkey solutions from your ideas. Let your ideas be dedicated to making things easy for them. This is the only guaranteed way you may get an answer from them.
How to Pitch and Sell your Business idea to a Large Company
If you have taken note of the above facts, here are ways you can pitch your business idea to a large company in order to get the desired response from them.
1. Create a Product from the idea
Large companies prefer to be sold products instead of ideas. You should remember that ideas cannot be patented; only tangible products can. These companies want to run away from the regular accusations of inventors that they were taken advantage of, and maybe avoid the lawsuits and bad press that comes with it, that is why it is better to negotiate based on tangible products.
So, if you want to quickly get the attention of a large company to purchase your idea, then you need to make the business idea into a product or a workable process. Additionally, it is advisable to put the product in the market as large companies judge the success of a product by its marketability. If your product has started carving a niche for itself in the market, no matter how small, it would make an easy sell to large companies.
2. Make the Managers Participate in the Pitch
It has been discovered that some investor are likely to respond positively to a pitch if they are made to feel like they are participating in the development of the idea. So you need to create a pitch interesting enough to want to make your audience participate, and you have to be eager to receive ideas and suggestions. By presenting yourself as an inventor who is willing to learn, and making your audience feel like creative collaborators can improve your chances of selling your ideas to the company.
3. Beware of NDA Pitfalls
When going to pitch your business idea to large companies, beware of insisting that they should sign a Non-disclosure Agreement for you first. Bringing up the signing of a Non-disclosure agreement raises a red flag that usually sends the managers scurrying back into their holes.
The company would feel that you are trying to trap them in something and as such, would never give you audience. This is the fastest way to lose a pitch even before you have started. In this regard, you are advised not to ask any company representative to sign anything for you. Besides, nobody can steal your ideas because they are just ideas.
4. Hold Back Nothing
Because a non-disclosure agreement was not signed, some inventors may be tempted to hold back on certain facts about their ideas. This is essentially wrong. You could end up hurting your pitch and getting it thrown out. When you are dealing with large companies, it is best you come clean with all the details to enable the managers make informed judgments. Believe me, the managers know when and if you are skimping on details, and it would never bode well for you.
5. Stick to the Facts
Companies most times have a lot of people presenting ideas, and so presenting a long and watered down pitch would make them lose interest quickly. Learn to stick with the facts and capture only the essentials, while also making sure to touch on every detail at the shortest possible time.
6. Show Product/Market Fit (Market Validation)
If your idea does not have good product/market fit, then forget about pitching it to a large company because nobody would listen to you. Large companies only want an idea that has potentials of carving a good market niche for itself. You need to prove that your idea would appeal to enough people and bring in money. It is all a game of numbers.
7. Prepare Yourself
During a pitch, the entrepreneurs first assess the inventor before assessing his ideas. You personality is what determines most times if your ideas would fly or not. The entrepreneur would want to see that you are fast, creative, thoughtful, efficient and can sustain a project through its conception, implementation and growth. A dynamic, intelligent, resourceful and energetic inventor is more likely to birth a successful product, so you need to look and act smart.
- Look Presentable
While it isn’t compulsory that you wear a suit, I must say that it is compulsory that you dress real good. Your appearance could even be the first criteria that’d give you a shot at pitching in the first place. “The way you dress determines how you will be addressed”.
- Up your Confidence
The very last think you want to do during an idea pitch is loose your confidence. The companies you pitch to expect to see your “A” game. The confidence you exhibit during your pitch goes a long way to shape you in their minds. First impression, as they say, lasts very long.
- Know your Numbers too
Thing is you can’t be pitching to such big companies, and fail to exhibit a mastery of your numbers. How NOT to pitch your idea is making assumptions especially when numbers are involved. How much you want the company to invest, the return on investments they will be getting and the timeframe are all the aspects you should make extremely clear during this.
- Get Innovative
Innovations are what big companies thrives on. They depend on innovations to outsmart their competitors. If you are able to showcase this quality in your idea pitch, then trust me when I say it will all end good. Thing is you can even build on their own ideas and carve it in a very creative manner. That would be a more subtle approach as the company would really show a long height of interest in your pitch. All you need over here is your brain at work.
It is already an established fact that large companies are less likely to license an idea, but you don’t have to run back into your hole when confronted with the first few negative answers or non replies. You have to be persistent and keep looking because it is often the last key in the bunch that opens the lock.
You need to challenge your already established strategies, change how you view things, especially rejection, and refuse to limit yourself. You have to ask yourself, “how badly do I want this?” It is very easy to get inspired but very difficult to stay inspired, so you have to find ways of getting yourself to keep pushing forward. If a door shuts, knock on another one till you get results.
The whole idea behind pitching your idea to a large company is for them to license your idea or product. Being that the chances of you getting the attention of big companies to the extent of them making a commitment to your idea is almost non-existent because ideas are not marketable, some experts have suggested joining ranks with the targeted company. You could get a paid or non-paid employment with them and pitch your ideas to them in-house. It has been proven that a large company is more likely to license ideas of employees than ideas from outsiders.
You could start with pitching your ideas to your boss and convince him to connect you to the right people. If your boss is not quite receptive of your ideas, you could try pitching to other managers who you think might be of help. If you do this successfully, the company may take it up. But note that the company may not give you a percentage share of the profits or any such thing, but you might get a bonus.
At best, you might be put in charge of implementing the idea, and if you do a great job, you might get a promotion or maybe a salary raise, and if the idea finally metamorphoses into a successful business, you may be put in charge of it. This may be the best route to follow when you want to pitch your idea to a large company in order to get quicker and more positive results from them.