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How Do I Find Licencees For My Product Or Service?

 

Did you know that you can grow and scale your business without having to hire employees?

Here’s what is covered:

Why introducing licencees could be better than hiring a sales team

Time savings associated with licencees

How to make people feel as if they are a part of something bigger

The control you have with licencees

How to maximise potential when working with licencees

About this video

Businesses live and die by cash, this video looks at one way of scaling and growing your business without the need for investment up front.

Business Growth Bureau discusses how you can maintain control of the business but also allow it to scale and grow. An important topic in today’s dynamic workings environment. Rupert and Alex will be talking about the pros and cons associated when you introduce licencees to your company.

Transcript:

 

ALEX:                    

Hello everyone! I’m Alex Smith and this is Rupert Honywood from Business Growth Bureau. Thank you so much for joining us again. We’re actually gonna be looking at right now is if you’re looking for a different level of growth through your business -say you haven’t got the resources to actually plug the BDM’s in or support stuff around you. There is actually options on how to grow and expand your product and service by doing something called licensing. So, Rupert essentially in a nutshell what is licensing for a business? (0:28)

 

 RUPERT:

Yeah! Licensing is a way that you can potentially scale or grow your business but still have an element of control over the intellectual property or product service that you’ve actually created. (0:38)

 

ALEX:                    

What does it actually look like? What does it mean to actually license out my business? (0:42)

 

RUPERT:

What it enables you to do is to actually find people around you that can really help you to scale and grow your business but making sure they comply with the framework that you put in place and adopt the best practices which you’ve made lay down. (0:57)

 

ALEX:                    

So essentially they provide my products and services but I set all the guidelines for them to be followed. (1:02)

 

RUPERT:

Exactly (1:03)

 

ALEX:                    

And in terms of the money arrangement because obviously everybody cares about the money and how they’re gonna get paid for certain things but like how does that look? Do I pay them a revenue share? Do I just put them on salary? What do I do with them? (1:12)

 

RUPERT:

Right! Almost certainly, wouldn’t be a salary because it was a salary wouldn’t normally fall under a license arrangement but typically what would happen is the licensee would may pay a sum of money, it could be a large amount, could be a small amount or it could be nothing in theory. Then what would tend to happen is was it may be that a percentage is retained by the person who owns a license and then the licensee also retains percentage themselves and depending on the business what those numbers look like it’s going to be completely different. (1:45)

 

ALEX:                    

Yeah! In terms of having a licensee for your product. What the massive pros to that obviously, we’ve talked about one of them to scale and reach but what are other pros to that? (1:56)

 

RUPERT:

There’s pros for a licensee and a licensor. For example, for the licensor or the person issuing the license it does give that control which is great also it saves you as a licensor having to expand at the same rate so it means, let’s say your business has massive growth potential, if you have to start employing loads of people before the revenue starts to come in your business will typically need to borrow a lot of cash to give you that growth first before you start to see the return on investment.

Lots of small businesses can’t sustain that equally they may have developed a lot of really good IPs as we’re protecting it. Equally a lot of licensees want to feel they’re part of something, they want to become part of a training program, they almost want a little bit of a business in a box. So it’s much less onerous and potentially a franchise arrange would tend  to be much easier to buy into.

So, if you’re in the coaching, mentoring, training space for example,  let’s take there’s a case in point. You may have developed a whole program which you want to unused licensees to go out and push out based on your model so you then train those coaches, trainers, mentors up to offer what you’ve created and then the coach, mentor trainer then actually retains as a percentage of the revenue for themselves and obviously as a licensor you receive something on the back of them but what does enables you to is potentially to scale much more quickly without necessary taking on the financial risk. (3:27)

 

ALEX:                    

Now, Obviously it’s nice to know that. In terms of the flip side of that what’s the cons of it? (3:33)

 

RUPERT:

Well the cons are you just had to be a little bit careful because it depends what you want at the back end. So, in some cases you may find this particular approach helps to increase the value of your business but it’s just a case whether increases it by as much as if you actually retained everything yourself and employed people.

It tends to be by definition, much lower cost a much lower risk for all parties concerned to look at a licensing type of arrangement rather than employing hold armies or teams of people but it can be the downside of it I suppose as well is it can sometimes be a bit like herding cats so you may be very reliant on how active those licensees want to be and there can be a hidden cost with that so by recruiting the right licensees can actually be really important for you and your business. (4:25)

 

ALEX:                    

Is there a good place to find these licensees? (4:26)

 

RUPERT:

Well, yeah! Depends again on your market but actually you couldn’t find it because a lot of this when someone’s coming in licenses it’s about building relationships of trust and building a team of people around you that are going to be supporting organizations the other way around. And so some networking referrals can work very well for that but equally also if you plug in some form of service where you can maybe through LinkedIn and use other social media where you get people warmed up to the point where they’re actually asking to have those type of conversations and expressing interest in working with you.

Then basically some very good methodologies that we can recommend for that and ideally that’s covered by some of the other videos that we have to offer. Now that would enable you to scale things out much more quickly and that obviously is something worth considering as well. (5:16)

 

ALEX:                                    

Cool! Is there anything else you feel kind of needs to cover on there? (5:18)

 

RUPERT:

Yeah! So I think broadly speaking that’s covered most of it. What I would say is just look at our website, look at our YouTube channel, there’s lots of good stuff on there and we may well be covering the whole aspect of franchising in another video but certainly for smaller businesses and potentially large ones license registers can work very well. (5: 40)

 

ALEX:                    

Perfect! Okay, thank you very much for taking the time to watch. As you know I’m Alex Smith and this is Rupert Honywood from Business Growth Bureau. Thank you very much, I hope you enjoyed it. Thank you! (5:47)

 

RUPERT:

Thank you! (5:48)