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Why business licensing is important and how to license your business

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Making the most of your brand

Disclaimer: This content should not be construed as legal advice. Always consult an attorney regarding your specific legal situation.

For small business owners, determining how to license a brand might seem like a foreign realm. How do you know who to work with and when it’s the right time? And most importantly, how do you navigate the business licensing process so you scale your business while still protecting all that you’ve built? Your brand is your baby. You’ve spent years of your life and a significant investment developing it. Once you reach success, it might be hard to give the reins over to another organization that you know nothing about.

All of these questions and feelings are completely natural and understandable. But business licensing can be a strategic step in growing your brand to new heights without putting the operational load on yourself. Read on to understand the foundation of business licensing, the benefits you can expect, and the steps to do it right.

What is a brand license?

According to the experts at UpCounsel, “This type of license usually allows a licensee to use a product, line, or certain business item. Licensing simply means the leasing or renting of an intangible asset.”

For example, as a business owner, you have a unique idea, service or product that’s specific to your brand. If you want to expand your business by creating more goods under your brand name or increasing the availability of your products through another distributor, you could license your brand.

First, you’d trademark the product, idea or item (protecting it so no other entity can illegally use or copy it or misrepresent your business). Then, you’d work with a partner organization that would create, distribute, market or sell items under your brand name.

The tricky part is that a brand license can protect trademarked tangible and intangible assets, such as a brand name (for instance, “Nike”), as well as product lines or specific business items.

Using our Nike analogy (check out their long list of trademarks here), here are commonly trademarked items:

  • Logo: the swoosh
  • Tagline:Just do it
  • Brand name(s): Nike Air, Nike Town, NikeFactoryStore
  • Brand signature: Air Force 1, Air Jordan, Flyknit, Dri-Fit

Related: Trademark vs. copyright: Which one does your business need?

Know the business licensing lingo

person signing a contract

As you embark upon this undertaking, it’s essential to understand the terminology and key definitions involved with the process. (Especially when you’re in the research phase trying to unravel the ins and outs of the process). Use this cheat sheet:

  • Licensor: You, the business and brand owner who wants to rent/lease your brand name, logo, tagline or a form of your brand signature to another business.
  • Licensee: Your future partner, the business or organization that rents/leases the rights to your brand.
  • Contractual Agreement: Formal, official document that outlines the relationship between licensor and licensee, including payment terms.
  • Royalty: Licensor’s (your) payment, often representing a percentage of all sales past a certain minimum.
  • Trademark: Legal protection for your brand to prevent others from using it. This can cover a “phrase, symbol, design, or a combination of these things that identifies your goods or services. It’s how customers recognize you in the marketplace and distinguish you from your competitors.”
  • Intellectual Property: Intangible items created by your brand that you need to legally protect. This refers to “creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images used in commerce.”

Understand the possibilities of business licensing

With business licensing, you can increase your brand’s reach without worrying about the manufacturing, production, and often even marketing (depending on the agreement). It’s the equivalent of outsourcing business growth, where the licensee takes on the operational duties.

The best part is that you’re not just growing your bottom line via royalties but also growing brand awareness.

In a perfect world, both parties benefit. You, the licensor, get to expand your brand to new markets, increasing reach and finding new audiences. The licensee creates and distributes a product with existing recognition and reputation. In other words, they can skip the brand development and R&D stage and forgo that initial investment. Your licensed products can also bring new business to the licensee’s organization if you already have brand loyalty with your existing audience. When sales grow, you both see a profit. It’s a symbiotic relationship.

Hire a legal expert

gavel and balance scales

gavel and balance scales

No one knows how to license a business or brand better than a licensing, trademark or intellectual property lawyer. Read articles to acquaint yourself with the process, do your initial research, talk to those in your community with experience. But, when it’s time to start the process, you need to engage a professional.

And when it comes to determining how to license a business and how to do it properly, you can’t simply consult a lawyer. Instead, you need to consistently work with one to ensure you’re taking the proper steps in brand expansion. For example, each new company you work with could likely have a different licensing contract with new terms.

To ensure you’re appropriately protecting your business interests, you should retain a lawyer you trust to review any new contract or agreement and discuss any related matters.

Do the proper research

Even with a lawyer in your corner, you still need to do your due diligence before licensing your brand. The order of research vs. hiring a lawyer can be a little bit of a “chicken or egg” scenario. Some lawyers may ask if you’ve done proper research before considering licensing opportunities. Others may be able to help with the process. Regardless, you want to do your own analysis to ensure this is a sound business decision for your specific brand, product and market. Your lawyer can then help with the nuts and bolts and guide you to make sound decisions.

Assess the landscape

When deciding if it’s time to license your brand, you need to first assess the overall market, aka your industry or niche, as well as your current business status. Do you have enough brand recognition that a third-party business would want to produce and distribute products under your name? Does your brand clearly resonate with your target demographic?

You may need to expand your initial business plan.

When approaching potential business partners for licensing opportunities, they need to understand your unique selling points. What makes your brand different from the rest? Is there enough demand within your target demographic as well as growth potential? Organizations may approach you, or vice versa, but either way, you need to position yourself as an established business to ensure the best brand licensing opportunities. Part of that is pitching your business as a good partner for them.

Moreover, you need to evaluate the competitive landscape. Is your niche already saturated with other large, well-received brands, or is there room for your brand to succeed, grow and disrupt? No matter what, you’re going to compete for shelf space (or digital space in ecommerce) and consumer attention, but competitive research will ensure your brand can stand on its own.

Develop a brand license strategy

As we’ve mentioned, your brand is your baby. You want to be protective of it and not only make sure you’re working with the right people but also using the right tactics to reach intentional outcomes. That’s why developing a strategy can help you outline your goals and make sure you stay true to your brand narrative and story.

For example, say part of your brand story includes individually made products by female creators. A reason your customers love your organization is that you focus on sustainable practices and working with these individual creatives. If that’s a hallmark of your narrative, you likely don’t want to license your brand to a big box store that will mass-produce products under your name. You’ll lose brand loyalty by not staying true to your organization’s principles and values.

Developing a foundation that outlines your short- and long-term goals will ensure that as you expand, you’re doing so on your terms, and you’re not getting sidetracked with irrelevant opportunities.

Find the right business partner

two people shaking hands at desk

two people shaking hands at desk

Another arm of being protective of your business, brand and interests is finding the right licensee. Going into business with someone is a serious decision, and you want to make sure it’s a fit for both sides.

For your purposes, you want to find a partner with experience in your market, appropriate resources and distribution channels, and financial stability. If applicable, test their merchandise and confirm its suitable quality. In addition, seek out an entity that will share and perpetuate your brand values and vision.

There’s nothing like testimonials from their other current licensors. Ask for references or to speak to their current partners to get a sense of their process. Seek the counsel of your attorney as well to vet potential partners.

There’s always risk involved in entering a new business partnership, so above all, make sure you’re comfortable with any organization and its representatives before you enter into a contract.

Take advantage of brand licensing opportunities

While we’ve already established the foundational reasons why brand licensing is beneficial, there are other more specific advantages for small business owners. Once you settle on a business licensing agreement, you can expect the following perks:

  • Test new markets: By licensing your brand to a third-party organization, you can test the success of new locations and markets without too much upfront cost.
  • Control your brand story: With a trademark and a licensing agreement in place, you retain control of your intellectual property and creations, plus how your brand is perceived to your expanded audience.
  • Outpace the competition: Once you understand the competitive landscape and secure a business licensing agreement, it’s easier to gain an advantage against your smaller competitors via expanding product availability and presence.
  • Gain new business partners and knowledge: When working with a licensee, you develop a business relationship with a well-established and successful organization. As such, you have a front-row seat to how they market and distribute your branded products, gaining invaluable new insights and expertise.

How to license your business the right way 

When licensing your brand, your business’s reputation is at stake, and there’s a lot to consider. Use this guide to perform the right research and lay the foundation of business licensing.

Remember, expansion for expansion’s sake won’t yield results.

First, you need to build your brand and create a loyal community of supporters. Then you need to dive into a fair amount of research to ensure you’re in a good position to grow your brand via licensing. Finally, before you partner with another organization, have the correct legal protections in place, a retained lawyer to help you through the journey and a clearly outlined plan for your business goals and objectives.



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Business Ideas for The Post-Covid World

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Are you looking to get out of the daily 9-5 grind that you’re stuck in? Maybe you’re not but better ideas have crossed your mind? Or the idea of being your own boss is simply too tempting to pass up?

Luckily, in a world where tech is at the forefront of a lot of industries, it’s easier than ever to go your own way. You don’t need a premises to open a shop, just the products and a website. You don’t need an office space to be a secretary, just a reliable Wi-Fi connection. You don’t need to move to LA to make music friends, just your home set up.

As the saying goes, restrictions breed creativity, which was proven in the lockdowns. A lot of good ideas came about, and the best stuck. We’re running down a few ideas that could prompt you to get out there on your own and make something of yourself. Read on for all the details of the best industry ideas that came out of lockdown.

Influencer

Don’t scoff. Depending on how you do it, there is a lot of skill and a lot of money in influencing. It’s likely that you are only seeing one side of things, which is usually a well-lit photo of a coffee cup taken in the golden hour. But what if I told you that a lot of skills – creative and business – went into taking that shot. It might feature a product placement for a coffee company, it might be used as a networking opportunity to catch the eye of a brand or generate buzz. It might simply be used to market their own business.

And then there is the content itself, which encompasses everything from capture to edit. Filming, photography, editing, music, graphic design, and presentational skills are all part of making quality content. There are a lot of transferable skills in both.

You can use influencing to market your own business, or even start your own affiliate blog, which serves as a site where you can showcase your favourite items for commission. A couple of hours’ worth of work a week can gain you a full-time employment salary.

Either way, getting the basics of the role of an influencer down will ensure that you can market just about anything else on your agenda, such as…

Food delivery
photo credit: Mart Production / Pexels

Hospitality

The hospitality industry had to go through a lot of changes through lockdown. Closing entirely soon gave way to take-out services, which eventually gave way to social distanced dining, but in that time, a lot of new ideas hit the table on how the food service industry could shake things up.

The most common idea was food through a window. A collection/delivery service where restaurants and cafes couldn’t serve food inside their premises so instead handed them over through a window. When things opened up again, the idea stuck. The roads are full of delivery drivers and cyclists for everything from the mom-and-pop café to the nearest fast-food supplier. It means less of premises and therefore less rent, or you can even do it directly from your home kitchen, making the gap between beginner and business a lot closer.

And then there is the idea of food trucks. You’d be surprised how much a food truck is making during the lunch hour alone. There was a class bias there once, where a food truck meant low quality, “junk” food, but street food is on the rise. It’s usually very high quality, tastes like nothing you’ve tried before since they don’t have to convince investors the masses will eat it, and they go wherever is most popular in the moment. You’ll see food trucks at the park, at festivals, outside clubs, etc. It’s also appealing to the customer because it’s usually more affordable. If you’re worried about menu pricing, take a look at this guide.

Freelancer working on a project
photo credit: Artem Podrez / Pexels

Freelancer

When the doors to offices started opening up again, the response was a resounding, “Do we have to?” Middle managers were surprised to find that employees all around the world where in fact enjoying working from home. There was more freedom, whether to work around external obligations like childcare or an exercise regime, or to simply stop for five minutes for a breather without worrying that your boss thinks your slacking off. And we’d be remised to mention that workers were reporting getting more work done at their own pace, because we know managers love productivity.

So, it only makes sense that, while working from home, some employees started wondering why they needed the middleman at all, and suddenly freelance became a viable option again. You can work at your own pace, avoiding all the money spending and polluting that comes with commuting, and be your own boss on top of that.

And it’s easy to apply a freelancing role to almost any skillset. To start, take a look at the role you’re in at the moment. If you can do it from a computer, is there anything stopping you doing it for yourself rather than a company? Think about applying a freelance position to the role you have for an easy transition.

However, if you’re trying to get out of the job, you’re in, there are a lot of options there too. It’s all about matching your skillset to the right freelance job. If you have skills in numbers, you can look into accounting. If you’re handy, you can get a van and get into trades like plumbing, carpentry, DIY, etc. If you have organizational skills, you can look into being a personal assistant to various clients. If you have writing skills you can look into ghost writing, copywriting, journalism, etc.

Learning online

Teacher

And there is another option if you have all these skills that you can use: teaching. Teaching comes in many capacities. The traditional means of teaching in a school takes a lot of education and internships before you are there in the room, but lockdown has unveiled a lot of ways it can be easier.

If that doesn’t appeal to you, you can use the best lesson of business life in lockdown: use video calls. Sure, traditional teachers and lecturers had to adapt to Zoom, and some didn’t do well there, but you’ve been using Zoom for at least a couple of years now, and you can use it to teach all around the world. Get hired as a personal tutor or put university study groups together to give more personal tutoring to those who are willing to pay for a helping hand.

And, going back to the influencer’s …influence, a lot of online courses are popping up on big social media accounts. You can record a curriculum of your chosen topic and sell access to it for anyone who is interested.

The best part about this is that you can sell courses on just about anything, be it fitness regimes, makeup tutorials, cooking, DIY, or university subjects like social sciences and literature analysis.

If you can market yourself as a reliable source in your field of study, you can record everything you know in some simple, easy to digest content, and put it behind a paywall like Patreon.

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5 financial tips for millennial business owners

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Money matters

This content should not be construed as financial advice. Always consult a financial professional regarding your specific financial situation.

In 2017, I wrote an article about financial tips for millennial business owners. Five years later and two years into the ongoing COVID-19 pandemic, I was surprised to find that most of the original advice still holds true today. However, some changes are worth noting that will better empower millennials to succeed personally and professionally with their finances.

Five financial tips for millennial business owners

Here are five things today’s millennial business owners should consider. We will look at each tip in more detail.

  1. Pay down and pay off outstanding debt.
  2. Work alongside a financial adviser.
  3. Observe the money moves of Gen Z.
  4. Build an emergency fund.
  5. Establish Plan B.

1. Pay down and pay off outstanding debt

My original article emphasized the importance of getting out of student loan debt. I mentioned suggestions for managing that debt, like lowering student loan bills through better repayment or refinancing plans and making loan payments on time. Hopefully, doing these things would make it easier for millennial business owners to financially plan to start a business.

However, according to Bank of America’s Better Money Habits Millennial Report, student loans now only account for 25% of millennials’ debt. The Winter 2020 report examines the precarious balancing act that millennials have with outstanding debt. And this debt is no longer limited to student loans.

The reason? Millennials are no longer twentysomethings. Millennials began turning 40 in 2021. The report shares the various types of debt that millennials carry in middle age, including auto loans (40%), credit card debt (37%) and mortgages (36%). Each makes up a higher percentage of debt than student loans.

Further, the report addresses the worries that millennials have surrounding their debt. Those surveyed say that having debt keeps them from reaching professional and personal milestones. Millennials today feel like they can’t or can’t yet fulfill the following goals:

  • Buy a first or nicer home (42%).
  • Save for the future (40%).
  • Welcome children or grow their family (21%).
  • Get married (21%).
  • Start their own business (19%).

Despite these grim percentages, millennials are not giving up.

The COVID-19 pandemic has impacted the American workforce with the Great Resignation. Millions of workers are quitting their jobs, with a January 2022 study from Cengage Group citing 38 million workers who resigned in 2021.

Quitting does not mean millennials do not plan to work again. Instead, they are taking back their power. Ninety-one percent quit their jobs to make more money, 82% are reconsidering priorities amid the pandemic and 81% wish to pursue another passion or career path and are reskilling appropriately.

For many millennial business owners, relying on traditional financial tips like refinancing, budgeting, and making on-time payments isn’t enough to get entirely out of debt. Resigning from a job where you feel stagnant, or experience stagnating wages is a critically important next step for paying off debt and revitalizing your career trajectory.

2. Work alongside a financial adviser

Couple holding hands with a contract and pen on table in front of them

No matter your stage in running a business, every small business benefits from working with a reliable financial adviser.

What can a financial adviser do for you? These advisers assist millennial business owners in making sound financial decisions. An adviser is well-versed in financial literacy and understands planning in certain and uncertain times of economic stability. Many also work with niche-based entrepreneurs, like those within the FIRE (financial independence, retire early) and HENRY (high earner, not rich yet) communities.

Best of all, millennials can even work alongside a millennial financial adviser if they choose.

If you’re currently on the hunt for one, check out this roundup on Business Insider of the 23 most influential financial advisers for millennials.

3. Observe the money moves of Gen Z

Millennials and Gen Z “allegedly” don’t like one another very much. Something about a TikTok dance? I digress. Millennials can learn from individuals at all stages of entrepreneurship, including the class of creators that makes up Gen Z.

How exactly does watching the entrepreneurial moves of Gen Z translate to financial advice?

Gen Z came up in a world where many cheaper tools are at their disposal. They are natural social natives that utilize digital platforms to build their brand.

Watch which tools they use to build their business and how they save money through using them. A good example is observing the platforms they use, like Square to accept payments and Etsy for creating an ecommerce presence. These tools are cost-effective and allow Gen Z to focus on their business. Take a few notes if you haven’t started already, millennials.

4. Build an emergency fund

If business owners have learned anything from the COVID-19 pandemic, it is the importance of having and maintaining an emergency fund.

Emergency funds are exactly what they sound like: three to six months’ worth of expenses set aside to be used in the event of an emergency. This emergency can be anything from a pandemic to a natural disaster. Having an emergency fund means having the ability to cover an unexpected expense without taking out a loan or using a credit card with a high-interest rate.

Three additional pro tips I have for building an emergency fund are below:

  1. If you withdraw a certain amount from your emergency fund, remember to pay it back. Ideally, do this as quickly as possible.
  2. Use this fund only in the event of an actual emergency.
  3. Add to an emergency fund regularly. Treat it as you might a retirement fund. Strategize with the help of a financial adviser as to what this fund’s maximum contributions might look like every year. Then, add to the fund accordingly. Too often, emergency funds are viewed through a one-time lens. Business owners should set up the fund in a safe space like a high-yield savings account and keep contributing funds to it over time.

5. Establish Plan B

Plan B was in the original version of this article, and I’m using it to conclude this updated list of financial tips for millennial business owners.

Having a Plan B is essentially creating a backup plan for your life. The phrase is often used negatively as if to say that because a particular business venture didn’t work out, you can’t be an entrepreneur again. That’s not true. Having a Plan B means having a safety net for every good and bad “what if?” scenario.

If something doesn’t work out now, you have options, and Plan B will help you find and pursue them.

This content should not be construed as financial advice. Always consult a financial professional regarding your specific financial situation.



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How to Kick-Start Your Online Clothing Resale Gig

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With the recent rise of resale apps like Depop and Poshmark, the idea of selling old clothes online is becoming more fashionable. Many people have turned clothing resale into a lucrative side gig or even a full-time job, gaining thousands of followers and making dozens of sales per week.

The secondhand-clothing market is projected to more than triple by 2030, according to a 2021 study by reselling platform Mercari and research firm GlobalData, as more fashion enthusiasts clean out their closets and search thrift stores to find valuable pieces to resell.

But whether you have a collection of band T-shirts or office attire, finding success on these platforms takes time and effort. Before diving into your closet, there are a few things to know.

You set your prices

Unlike consignment and resale shops, you can price items yourself on an online platform. Before listing a piece of clothing, look it up on multiple platforms to find out what it’s currently selling for. Depending on age, condition and brand, prices can vary widely.

You can also take advantage of direct messaging to negotiate with buyers and use features on apps like Depop and Poshmark that let you accept offers and create multi-item discounts.

“Sales can be sporadic,” says Andres Castillo of Los Angeles, who sells rare designer pieces through Depop, eBay and Instagram under the name Debonair Vintage. With rare or high-value items, it may take a while to find the right buyer, especially if you’re looking to break even or make a profit.

There’s a big time commitment

“I treat [reselling clothes] like my job,” says Eve Perez, a full-time student in Lebanon, Pennsylvania, who sells under the name Fitsfinesse and was featured in Teen Vogue in 2021 for her Depop success. She responds to messages daily, on top of taking product photos, sewing custom pieces, and packaging and shipping orders.

Communicating clearly with first-time buyers is essential: “If you don’t build that relationship, then you won’t get sales and returning customers,” she adds.

Although you have control over the prices, reselling online takes much more time and energy than selling to consignment stores. According to Depop, sellers who list consistently — around 15 items per week — sell more over time.

“It takes a lot of time and dedication,” says Castillo. Top-notch sellers have to learn to take eye-catching photos, understand shipping rates, negotiate over text, and research brands and trends to make the most of their inventory.

Overhead costs add up

Yes, you can set your prices — but there are a few overhead costs to factor in. Online resale platforms charge commission fees, plus additional fees for shipping through the platform or accepting payments through a processor like PayPal. Depop takes 10% of every sale and eBay takes 15%; Poshmark takes $2.95 for items under $15 and 20% for items over $15. PayPal, which integrates with Depop, Poshmark and eBay, charges another 3.49% plus 49 cents per transaction for payment processing.

On top of that, you’ll need to pay for packaging, label printing and possibly storing inventory including bins, hangers and shelves. Top sellers also recommend adding a personal touch in shipments, like free stickers, small accessories or a thank-you note. When all those costs add up, you may find that only higher-value items are worth listing.

You can cut costs by reusing shipping mailers and boxes, and printing labels at your local FedEx or UPS store instead of purchasing a label printer. Or, reduce shipping costs for buyers by bundling several items into a single shipment, which can motivate buyers to purchase more from your shop.

The social aspect is a priority

The most successful online resellers have one thing in common: a strong personal brand. Finding your niche and building a loyal following is essential to long-term success on a resale platform.

“It’s like Instagram, but for selling,” says Perez, who focuses on curating a consistent aesthetic and marketing her shop on social media platforms like TikTok.

Castillo grew his business by catering to a very specific market: vintage designer collectors, specifically for Moschino and Chanel. He sells across several platforms, using his Instagram to rent pieces out to stylists for photo shoots and red-carpet events. Though he targets a fairly small community, his narrow focus helps him reach his ideal buyers.

Other top sellers on resale platforms can be seen taking a similar approach, with shop themes ranging from band T-shirts to vintage gowns. “Lean into your personal taste,” says Castillo. Even if you don’t have a curated collection to sell, personalized packaging or a unique photo background can help your items stand out.

Both Perez and Castillo emphasize the importance of cross-linking social media platforms to reach as many potential customers as possible. Creating a dedicated Instagram Business account and following other online sellers and designers can help drive buyers to your shop. Check popular pages for trendy hashtags and add those to your posts. Making the time to promote on social media can help transform your closet into some serious income.

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