Are you a creative? A thinker? Do you have ideas which you know could make you money but not necessarily the skills or resources to take them to market? Well, there is a way to make money from your ideas and let other people take the strain in production and delivery. Sound too good to be true? It’s not, it’s called licensing.
In this guest blog, Nick Farnsworth, founder of Little Sport Star, makers of awesome developmental sports toys for babies, from rattles to play gyms, joins us to explain all.
Photo credit: Little Sport Star
What is licensing?
Licensing sounds incredibly complicated but it really isn’t. In its simplest form, licensing is an agreement to let someone else use your ideas or creations. In the right circumstances, companies will pay you to use your ideas.
You don’t need to be a lawyer to work it out although ultimately, you may need some help to sort out a legal agreement. The bottom line is that your ideas are your Intellectual Property and you can protect your ideas through the registration of your patents, trademarks and copyrights at the Intellectual Property Office.
In my case, I had an idea for a range of sport themed toys. My brand is called Little Sport Star and my first toy was a baby tennis racket. I couldn’t register the general concept of sports-themed toys, but there are aspects of my business are unique and therefore protectable. First, I have registered the trademark Little Sport Star with the Intellectual Property Office and the tennis racket is unique, so I registered the design also.
Since I have protected them, if someone wants the right to use my designs, then they need my permission and that’s where licensing comes in.
Why is it a good fit for parents?
When you start a business, you have lots of challenges but two of the biggest are cash flow and time. You need the cash to grow the business and you need time to run the business.
When you become a parent, you will be spending a fortune on nappies and baby accessories. Plus, there is a high likelihood that both parents will be working. You won’t have a lot of spare. Spare time disappears.
The thought of setting up a business at this juncture of your life probably seems like an impossibility so if you can get someone else to develop your business idea for you, that’s where licensing might be a solution for you.
You’ve had huge success with exporting – can you talk us through your journey?
Our brand story started when my daughter was born. I started designing toys for her. I could not find a style of sports-themed toys that I wanted for my children and so I started to make them myself.
I had a very clear vision for a range of sports-themed toys which included tennis rackets, footballs, golf clubs for babies etc. My most challenging concept was a baby activity gym, that I wanted to turn into a football stadium.
We made a good start selling online in the UK but even greater success in the USA. When my daughter was in nursery, I travelled to ABC in the USA to find a partner who could help me break into the US market. I showed my designs to several companies, and fortunately, the first company that I met, Kids Preferred, liked what I was doing. They also happen to be one of the market leaders in baby toys in the USA. They are a great bunch of people and they have a great distribution network. They work with other big British brands such as Peter Rabbit, so I felt I was in safe hands.
My designs are now available in several major retailers in the USA, Babies R Us, Toys R Us, Walmart, Barnes and Noble, Kohls, JC Penny.
You’ve been doing really well in the US – do you have any tips for other UK businesses trying to break America? The dos and don’ts of dealing with US buyers.
Don’t be afraid of the US, but it is a tough nut to crack. The US is massive! Few people will conquer the US alone – you have to get whatever you make past their border control and then you need warehousing, the country is so big that logistics in the US is complicated, and you also need to meet the right buyers. Ask yourself why they would trust you? I quickly decided to find a US business partner.
You need a bit of arrogance to start a business, and so my mantra for the US is that “if One Direction can crack America, so can you”. One Direction would never have cracked America without the right contacts over there. Simon Cowell had business partners there already and so it was all set up for them. They just needed to sing and look cool.
The tricky part is finding the right partner!
Success in business is often determined by your business model and how you can refine it to make the most problems. How have you changed your model since you started?
I have a really simple business plan. I adapted the format for my business plan from my years working in international project management, from something called a “log frame”. Basically, a log frame starts with an overall objective, and then you work out all the steps that it will take to achieve that objective, complete with all the risks and assumptions. It fits onto an A4 – anything more is likely to be unworkable.
My overall objective is still to become a global toy brand, so I still have a long way to go.
How do you cope with knockbacks? What keeps you driven to achieve more success?
Knockbacks are just part of learning. I have made mistakes which should ordinarily have destroyed my business. In my early days when money was really tight, I received a full container of toys from China and all the toys were substandard. It was so devastating that I could have cried. I had spent my savings on that container, my future growth was built on selling the stock.
If you want to know more about knockbacks, I can recommend a great book: “Grit” by Angela Duckworth.
As a solo entrepreneur, how do you manage the areas of the business that you wouldn’t normally do? Do you outsource? What platforms do you use?
Great question. This is the time to take advantage of the gig economy so I outsource lots. Manufacturing, designing, distribution, even sales… these are important details of a toy business, and I outsource most of it.
The challenge of outsourcing successfully is to make sure your incentives are aligned. Where I have experienced trouble in the past, it has been because we have not been aligned.
I may work alone, but I still regard my business as a team effort. I compare my role in the business to some of my favourite tennis players, such as Andy Murray or Serena Williams. You may only see one person on court in a match, but both have a huge team them supporting them.
Several great brains have supported me along the way. How can I thank the father at my daughter’s tennis lessons, who did all my legal work for free? Or the mother at nursery who helped with some marketing! Becoming a Dad has opened so many doors. Don’t underestimate your friends and family as they will often want to help for free.
If you can’t find someone or you don’t want to ask, try looking on websites such as PeoplePerHour.com, where you can meet people with all sorts of skills – SEO and website builders, copywriters, virtual assistants or even professional toy designers.