One of the challenges of running a self-funded business is there is never enough money to invest in developing amazing products. You may have the skills and ideas, but financing the development of your invention can be a challenge.
This leads a lot of business owners to develop custom products for each of their clients, which leaves you running on the hamster wheel of chasing the next project and never really building a company of much value.
My day job is running The Value Builder System™, where we help owners build more valuable companies, and one of the eight factors we evaluate when we start working with a new business is how differentiated your product or service is. The most valuable companies have a unique product that they own, and the least valuable companies are developing customized solutions for each of their clients.
Acquirers buy what they can’t build and a company that develops customized solutions for each client is pretty easy to knock off by hiring a few smart people from the industry. Whereas, if you own a unique product with a barrier to entry, an acquirer will reason it’s cheaper to buy your company than spend years trying to compete with what you’ve created.
So, what do you do if you want to build a product you own on a limited budget?
Waving Customization Fees In Return For Ownership
One approach is to offer to develop a custom solution for a specific client and not charge customization fees in return for retention of the underlying intellectual property (IP)
Brian Ferrilla started Resort Advantage in 2006 to help casinos adhere to new anti-money laundering laws. Criminals were laundering money through casinos and Ferrilla’s software helped casinos spot the bad guys.
