Prep Work May Not be Exciting, but it Guarantees a Better Result
Steve Pearson, founder of the Pearson Strategy Group, has one word for business due diligence: “Boring!”
Yes, boring! But as crucial to your business success as prep work is to house painting, he quickly added during a recent online discussion with Jan Triplett, Ph.D. and CEO of Business Success Center in Austin, Texas.
The discussion about avoiding costly mistakes was May’s installment of the Business Ownership Success Series presented by the center. Business intelligence due diligence is vital if you’re trying to patent or trademark something and for understanding your competition.
“I work with a lot of inventors and business people who would rather think of more interesting things, like getting patents and making money, but due diligence makes a huge difference,” Pearson told listeners.
For example, Triplett once worked with a company that was ready to print advertising materials using a fresh name that they thought they had researched sufficiently. A more thorough search during the advertising campaign found the name already in use in California and saved the client expensive printing costs and possible legal problems.
Pearson agreed that simple and cheap market research or business intelligence research can be the first step to help minimize risks and maximize opportunities. Research may also be an early tip-off to unknown competitors or competitors who may be approached as possible partners or allies. But don’t rely only on your own early research.
Both Pearson and Triplett noted the business value of having an outsider test a preconceived idea about an innovation. Missing the prime target because of assumptions is a common situation he sees, Pearson explained.
While Pearson encourages early stage Google searches and other DIY research, he cautions inventors and small business owners about moving forward without professional help.
“An early client did his own legal research and found nothing of concern. When I gave him the information my research revealed, it was like a bomb had dropped,” Pearson said.
“It’s important to stay legal,” Triplett added. “Consider compliance and regulatory issues. You don’t get to ask forgiveness if you slip up and you can be squashed like a bug!”
Of course time and money are of great concern, but Pearson pointed out that due diligence research can start simply and progress in steps. One company may find that a week of research is sufficient, while a more complex endeavor might call for a month-long investigation.
“The cheapest, most powerful research in the technology field is patent research,” Pearson said. “Do you have freedom to operate? Who is in your space? Is there a competitor? A potential buyer or ally?”
Market due diligence will give you the information you need to make decisions and move forward. Even a little research can help guide the next step. Spend a little money and see if you need go further.
“Waffling and not finding a path because you haven’t done due diligence can cost you in the long run,” Pearson emphasized.
The pair also advised pre-revenue startups that “someone will ask these questions. You need to get answers.”
Risks for startups are great, with more than 90 percent failure rate, Pearson pointed out. Patent and related research can help tip the scales.
“You might make a mistake,” Triplett said. “We all do, but Steve and I would like to help you avoid stupid mistakes!”
This discussion was part of the Business Ownership Success Series of the Business Success Center’s Profit Mover™ program for increasing profits and efficiency.
For more information about the BOSS Talks series go to the Business Success Center.
Presentation recording courtesy of the Business Success Center