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    8 Replies Latest reply on Jan 15, 2008 7:49 PM by Lighthouse24

    which comes first; the chicken or the egg?

    buckwheat Newbie
      I am an inventor and have a decent idea for an non mechanical environmentally agreeable niche market product that can be finished and packaged in small quantities in my garage but any available funds that I have will be committed to the development of the product and start up costs i.e. manufacturing molds and two relatively simple but dedicated treadle type punch and die stamping machines.

      Essentially, if I spend the money getting the business licenses first I won't have the funds to develop the product.

      It isn't a universal widget that everyone in the world must have or will even want (an analogy would be finger cots) but if it takes off (and, with some judicious TLC, I see no reason why it shouldn't) and for this niche product I eventually end up having to involve off site manufacturing and warehousing/distribution facilities can I get the business licenses I need retroactively or are there punitive fines and fees for doing this?

      For instance; let's say that I start off with nothing in February of this year and at the end of the year December 2008 the business makes a six figure income will the Fed or State IRS allow me to 'backdate' the paperwork?

      What is the deal with liability? Nothing can be made foolproof and its use and application will be obvious and simple but is putting the simple 'DO NOTS' and USE AT YOU OWN RISK in very large red letters on the packaging enough to forestall spurious claims?

      None of the materials are flammable at room temp. or the processes heat intensive so I don't really have concerns about burning the house down but what about my homeownwers insurance? How will that be affected?,


        • Re: which comes first; the chicken or the egg?
          LUCKIEST Guide
          Buckwheat. Thanks for sharing. So what next?? What do you do when NOT inventing??
          Do you have a Business and Marketing Plan?? I know Accountants cost money. Do you have one?/
          Getting the business licenses in NOT expense. Going into business is MORE.
          Don't worry about 'backdate' the paperwork. Make the sales and profits.
            • Re: which comes first; the chicken or the egg?
              buckwheat Newbie
              Thank you.

              I had a detailed answer typed up but lost it somehow.

              The problem as I see it is that once the device exists in three dimensions (bringing it into being is where my time and effort and treasure comes in) it will be insanely easy to copy and I expect both the domestic and foreign 'knock off' markets to swing into high gear.

              I have been the route of utility patenting (many, many moons ago) and do not wish to spare the time or expense because all I can see is expensive cease and desist litigation from the get go and a design patent, although cheap and eminently feasible, could be superseded by the simplest of modifications which then would not allow me to make the same simple modification without coming to some arrangement via an attorney.

              My business plan would therefore be name brand recognition via distributors and a constant refinement of the product. As the device is intended to be sold cheaply in bubble packs of 5 or 10 and be disposable (that is where the environmentally friendly aspect comes in) better designs and modifications could occur on the fly and the business plan would be to constantly come up with refinement to and uses for the original design to foil the rip off artists but if they produce a novel use for it then more power to them

              (In typing the previous message up I came up with another application but, as I say it is a niche market and in such application the original design would assume another function.)

              But, between the advice to go for it and the very valuable idea of treating it as a hobby perhaps between them my idea will take shape and see the light of day and perhaps a cash register or two.

              Again, thank you.

              I gave up trying for the brass ring a long time ago but if it happens, as I hit snags, as I am sure I will, I will be back and perhaps the scroll and memory functions of this webpage will be in better shape by then but thank you for your encouragement and offers of help..





                • Re: which comes first; the chicken or the egg?
                  Lighthouse24 Ranger
                  Buckwheat, this is a general observation (not directed at you personally). The mistake a lot of aspiring "inventors" make is thinking in terms of one big score -- one idea that goes from their head to the marketplace -- as a life goal. Lennon and McCartney didn't write "Love Me Do" and quit. Steven Spielberg didn't produce Sugarland Express and call it a career. The ability to conceive something new and then to turn it into a marketable product takes a rare combination of skills. Very few people can do it, but almost everyone who can do it once can do it again . . . and again . . . and again. In most cases, the best and most successful ideas come later, anyway.

                  So I think it's a mistake for amateur inventors (or anyone in a creative occupation) to get overly wrapped up in protecting their legal rights or worrying about rip offs and knock-offs early on, before they actually even done anything. As with film makers, the first invention may not be a "hit" -- but you'll learn from it. Once you've been through the process a couple fo times and demonstrated that you can get an idea and turn it into something that sells, people at large firms with lots of money will trip all over themselves to be sure they get whatever you dream up next (and that you get the compensation and freedom to keep creating). Best wishes.
                    • Re: which comes first; the chicken or the egg?
                      buckwheat Newbie
                      Lighthouse 24, that is good advice.

                      I had mentioned this idea to a friend and the first words from his mouth was 'Liability. California is famous for litigation'. Expect to be sued.

                      I told him that if it really were that bad then nothing would exist that was for sale in California but the opposite is true. There are all kinds of of stores selling all kinds of stuff.

                      Because it does have application to living beings (animals) would putting in clearly visible BIG red type 'Use at your own risk' avoid litigation?
                      It is so simple that I could even come up with a two glyph straightforward universal signage portraying 'OK' and 'NOT OK' and post such signage, along with text, prominently on the packaging but would that be enough?

                      As I mentioned, it truly is a niche market but fortunately anyone who would buy the product would do so with cause or concern for their animal's welfare and the product would be good and fill a need but, like everything else has it limitations and misapplications.
                        • Re: which comes first; the chicken or the egg?
                          Lighthouse24 Ranger

                          Your friend is correct that lawsuits are rampant these days, and given California law and "culture," your state probably has more than its share. As a consultant, however, I hardly ever see an honest, reputable small businesses being sued. There's a business law firm next door to me, and I'd say in about eighty percent of their cases, the business owner or manager did something really bone-headed and deserved to be sued. About 19 percent of the time, the customer was the bone-head, and the huge majority of those never make the courtroom. The other one-percent are cases where nobody is really right or wrong, and these are generally resolved through simple communication or arbitration.

                          One of the best ways to be "judgment proof" is to be broke (something that most home workshop inventors have no trouble with - LOL). No one sues you until you have money, and once you know you'll have money coming in from your new invention, you can afford to hire an attorney to put all the "CYA language" you need on it. An attorney can also help you set your business enterprise so the entities with money have no product liability, and the entities with liability are still "broke" and/or have adequate insurance protection to weather any legal issues.
                  • Re: which comes first; the chicken or the egg?
                    Lighthouse24 Ranger

                    The short answer is that it sounds like you have what the IRS would consider a "hobby" right now, not a business, so you don't need to worry about most of this yet.

                    The process for transferring personal assets to a business start-up (and tending to details like an insurance rider to cover a home-based business) is something literally millions of people have gone through. When you are ready to form your new company and launch the product, you (and a qualified advisor like a business consultant, attorney, or accountant if you desire) can quickly examine the costs you've incurred, the revenue you anticipate, liability issues, etc. and determine the most advantageous start-up structure and strategy. Just keep a record of your expenditures so you know how to value your assets when the time comes -- but don't worry about locking yourself in or out of any options at this point.

                    You asked what comes first, the chicken or egg. Actually it is neither -- it's hot wings and omelettes. In other words, to get to the point where you'll have a product to launch, you have to begin wuth the end result and work backward.

                    Let's start with you making a six-figure deposit in eleven months. Where will the money come from (i.e., who will buy the product, in what quantities, and for how much)? Where/how will they buy it (retail stores, wholesale merchandisers, on-line)? How will they know it's for sale in the first place (media advertising, trade announcements, word-of-mouth)? Having a crystal clear answer to those questions is part of how you attract investors or partners -- which is where you will get the money to market your invention.

                    So spend your time and money now making a good back-to-front plan, and on developing the product. If you have a good plan, plus a product that is truly viable, you'll find the money to launch.

                    Hope this helps. Best wishes.
                    • Re: which comes first; the chicken or the egg?
                      CEO Space Scout
                      We deal with this in our network more often than not. We find that most people do the right things in the wrong order, so it is wise of you to ask about sequence.

                      One of the many consultants in our network, Maria Simone, is particularly helpful with inventors.

                      You might contact her at Let her know that Kathy Hadley sent you to her as she may not be taking on new clients at present. I don't know.

                      But she will give you some of her time, if not, get back with me.
                      • Re: which comes first; the chicken or the egg?
                        buckwheat Newbie
                        I find this marking system confusing. I thought I was referring to everyone who had contributed.