Research must follow an idea for a new product
Dear Karen: I am a student with an idea involving dentistry. How do I get this product off the ground?
Answer: Do market research to find out whether someone is already selling or developing your product. Search patents at the website of the U.S. Patent and Trademark Office, www.uspto.gov.
If your idea is unique, build a prototype for testing purposes, said John Mittelstadt, inventor of the TravelRest travel pillow. “You can’t get useful feedback if you have something made from duct tape and cardboard,” he said.
Get reactions from trusted colleagues, friends and relatives, and if they’re positive, show your prototype to dental professionals, Mittelstadt said. Make sure they sign a nondisclosure agreement first. If your product is a hit with the pros, find a manufacturer who can refine the design and produce your first order. You’ll then need to market and sell the finished product.
Expect to invest significant time and money. After Mittelstadt got the idea for TravelRest on a flight to Asia, it took him seven months and $50,000 to bring the product to market, he said.
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Make use of new tax provisions
Dear Karen: What are the pros and cons for small business when it comes to state and federal taxes in 2009?
Answer: It’s a mixed bag for small business, said Paul Heiselmann, a tax partner at BDO Seidman in San Francisco.
“This year, good things come to those who planned, ran their companies conservatively and have the cash to take advantage of some of the stimulus provisions,” he said.
California sales taxes and vehicle licensing fees are rising, while the personal income tax dependent credit is going down. On the federal side, there are incentives for companies that buy equipment and hire staff this year.
Employers with fewer than 20 employees can get a $3,000 tax credit for each full-time employee hired. Companies also can get increased business tax credits if they buy solar power or other alternative energy units, Heiselmann said.
Talk to your accountant about how you can take advantage of new tax provisions, he said.
“Some of the largest and most successful start-ups began during the significant recessions of the last few decades,” Heiselmann added.
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Build confidence in your company
Dear Karen: How can my new company gain credibility and compete for contracts?
Answer: There are several ways that small firms can give potential customers more confidence about hiring them. For starters, make sure you have adequate capital to regularly pay your bills on time.
“Aside from building goodwill with suppliers, it helps send a message of solvency” about your firm, said Neile King, vice president of sales and marketing at business software firm Smart Online in Raleigh-Durham, N.C.
Support your community by donating time or products to good causes. Volunteer on boards or committees at business networking groups. Make your website and business cards look professional and ensure that all your references are solid, King said.
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