Generating and Protecting the Business Idea

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  • Generating and Protecting the Business Idea
    • Sources Of Business Ideas
      • Personal Experience
      • Invention - Formulation of new ideas for products or processes.
      • Ideas from abroad
      • Innovation- Practical application of a product onto a new idea.
        • Problems of innovation : Patents, Copyright, Trademarks, expensive, long term profit, opportunity cost, time.
        • Why innovate? 1)To make something better with your own idea. 2)To solve an underlying issue 3)To make more profit from the product than the original does. 4)Brand loyalty - guaranteed profit.
      • Spot a gap in the market.
      • Spotting a trend.
    • Franchise(s) - Franchising basically means using another companies' business idea and product in exchange for a fee (royalty).
      • Franchisor > Franchisee (The franchisor sells the franchisee the rights to the business).
      • Disadvantages of franchising? Initial fee to be paid, royalty fee, run business according to franchisor's rules, difficult to sell franchise, bad reputation from other franchises of the same brand.
      • Why buy a franchise?      Money, image, reputation, less risk, support and decision making, marketing etc.
    • Copyright- The legal protection against copying from authors, artists and composers.
      • Issued as soon as work is created.
      • Protection lasts for up to 70 years after the author's death.
      • Owner can control how the work is exploited.
      • Author can licence for a royalty fee.
    • Trademark-  Protected signs, logos, symbols or words displayed on a companies products  /advertising (including sounds or smells) which distinguish them from the competition.
      • Prevents others from using a confusingly similar sign/ design to their own companies.
      • Once granted, protection lasts for 10 years.
    • Patent - An official document granting the holder the rights to be the only user or producerof a newly invented product or process for a specified period of time (usually 20 years).
      • Patent gives owner the right to take legal action against those who try to copy/ steal their original design and use it it for profit.
      • Lasts for 20 years once granted.
      • Owner can licence the design/ invention for a royalty fee.
    • Niche Market- A smaller part of a larger market in which customers have more specific needs and wants.
  • Franchisor > Franchisee (The franchisor sells the franchisee the rights to the business).


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