How to Protect Your Valuable Business Ideas

From Power of Business (powerofbusiness.net), an Extension initiative, and our eXtension community, Entrepreneurs and Their Communities, welcome to Small Business Week+. Extension supports small businesses and their development as a part of our land grant mission. For the next few days, we are highlighting small businesses and the ways we partner and support this important economic sector.

Guest Blogger: Richard Proffer, Business Development Specialist, University of Missouri Extension

Intellectual property sign

Intellectual Property (CC) Traci Lawson, on Flickr

Every business has ideas it has developed to do things more efficiently. Or the business owner has come up with a way to produce his product in a manner his competitors cannot copy. Better yet, the owner has devised a variation on an existing product that makes it more durable in the marketplace. A business customer list is also an example. These ideas or innovations are important to a business’s success and allows them to gain competitive advantage over their competitors.

But how can an idea be protected? They first must be tangible and able to be seen, read, touched or in some other physical form. If a business owner has no way to protect these new ideas then the chances are they will never see the light of day. The rest of society will not benefit from these new opportunities. There are four legal ways to protect your idea: patent, copy right, trade secret and trademark.

The first one – patent – is the most common way. Here the inventor files a disclosure on the invention with the U.S. Patent & Trademark Office (http://www.uspto.gov/) to review. This office is responsible for making sure the idea is able to patented. There are three types of patents: utility, design and plant.

With a utility patent, you obtain protection on how a product is used and works.

The design patent then only pertains to the way the product looks.

Finally the plant patent is aimed to protect new species of plants that are bred. There are some types of plant creation that is not covered so make sure you check into the possibility if you invent some new types of plants.

The second type of protection is a copyright. These protection devices are also managed by the Federal Government at the Library of Congress (http://www.copyright.gov/). This method protects an author’s rights to original creative works. An interesting website on copyright is www.templetons.com where they have an article on the top ten myths of the topic.

Next, we have trade secrets which are handled entirely differently. They are not protected through Federal registration but through the legal system on all levels – federal, state and local laws. Some factors that determine if your idea is really a trade secret is:

1) How many people know it outside the business (hopefully none is the answer)
2) How many people, within the business, know the secret (hopefully few)
3) How is it be safeguarded
4) How important would it be to competitors
5) How much did it cost to create this idea

If a business wants to protect information, it should keep in mind the above five questions as those efforts will help a court realize you are serious about this idea. As you can see from the questions above, a trade secret deals with the operations of the business and not information dealing with payroll for example .

The final way to protect your idea is through a trademark. These protection techniques are registered at the state level (usually at your secretary of state office of the U.S. Patent & Trademark Office (http://www.uspto.gov/). Here you are dealing with a recognizable sign, design, or expression that clearly identifies the product or service of a particular company. An easy example is the Coca-Cola trademark for Coke. Trademarks have their roots as far back as the Roman Empire where blacksmiths would mark their swords.

So even if you are a small business but have creative ideas, you can gain protection for your ideas.

Agritourism: People Will Come

I am a farm boy. Grew up on a what today would be a small farm. My summers and after-school hours were spent working on the farm. Days were long and there was always something to do. Putting up hay always happened around July 4th.

For most of my farming friends, this was a way of life yet few people ever came by to see what we were doing, well maybe the relatives. There was no reason as many had grown up farming or were closely connected with the people who worked the land such as a relative or family friend.

Making hay

Making Hay (CC) by Stephen, on Flickr

In my world, I couldn’t imagine getting people to come and pay money to load hay, shovel grain, feed cows, or just wander the farm.

Today, this has all changed. People are now looking for an experience, and agritourism experiences are capturing interest. For those of us old enough, we may remember the movie “City Slickers.” . Today, some of us want to relive those days or may be a desire to learn more about where our food comes from or to experience something our ancestors once did. For a third group, it is making connections with our history.

Visiting an agritourism operation

An agritourism experience (CC) Jessica Reeder, on Flickr

Agritourism can be a business opportunity. From pick-your-own to pumpkin patches and corn mazes to dude ranches to birding and wildlife to a bed and breakfast, all of these can be developed into a profitability venture. They can be near, or even in, the city but can also be well away from the beaten path.

Not only can such businesses be economic engines for the business owner but communities can also build around those efforts. Visitors will want to see other local sites, they are interested in local history and they want to spend money, for food, beverages, gas, souvenirs, etc. The community needs to be able and willing to offer those items as well as to help link agritourism and other business owners together as collaborators.

Now may be a great time for developing agritourism on your farm/ranch and in your community. They can be good business opportunities? It may not be right for everyone (do you want people on your farm or ranch?). It may be something to consider though if you are looking for new ways to use assets you already have.

You can get more help from your local Extension office. In terms of marketing, online marketing is so important today so check out: Marketing Agritourism Online

Learning From Other Business Owners

There are two important ways we learn.

The first is the formal process of learning. This includes formal education but also the workshops, reading, and the self-improvement courses we take and do.

The second means is the informal process and it is key in our lifelong learning. Let me give you an example.

I have a 9-month old grandson. He learns every day but not through the formal methods. He learns by observation, watching and listening to the world around him. He knows that eating must involve a spoon so, when eating, he wants a spoon in his hand even though he doesn’t use it. Also what he eats is depend on what he sees others eating.

Much of our learning comes from listening, sharing and observing others. We often refer to this as “real-world” experience.

The examples of my grandson is learning through real-world experience. And that learning happens when we connect with our peers and reference groups.

But does informal learning work? Can it be trusted?

According to research, yes it can. Effectiveness depends on two factors among several others. First, finding a person you follow over time who is often typically correct. The second way, one we more commonly employ, is to listen to lots of people on a single issue. If we then average the answers, the result is often quite accurate. This latter method, when tested in the intelligence community has been found to be better than the expert opinion more than 30% of the time.

So why bring this up?

Friday starts a new opportunity for learning. The Power of Business Friday 15, a 15 minute conversation, helps you network with other business owners on a variety of questions.

Chats will be held the first Friday of every month at 12:15 ET, 11:15 CT, 10:15 MT, and 9:15 PT. THE COST IS FREE!!!

To register, go to: http://go.unl.edu/Friday15registration. You will receive an email acknowledgement with information on how to get to the session and about existing and future Power of Business opportunities.

Take 15 minutes to improve your business. Join us online at Friday 15!

Power of Business - First Friday Live Chat

First Friday – Live Chat

Small Business Trade Secrets

Guest Blogger – Richard Proffer, University of Missouri Cape Girardadeau County Extension Office SBTDC

Secret

Photo (CC) by laverrue, on Flickr

Every business, whether large or small, has a secret considered vital to success. It could be a family recipe for a meat dish that has a special spice or a new way to create a rubber product cheaper but yet it lasts just as long. Whatever it is, it is of value to the business and is often considered to be one of the most important assets when the business is up for sale.

Unfortunately, trade secrets cannot be easily and universally defined. The real definition comes from the fact the following three tests on the idea: is kept secret, is considered important and necessary for the business’s success and has a value to it. Those three tests must be met for a court to protect the trade secret in a legal issue.

A trade secret can be almost anything used in the business or created by the business as long as it is not generally known in the industry. For example, if a business owner creates a new recipe using pinto beans for a homemade chili, it will not probably be considered a trade secret because 1) chili is common, 2) pinto beans are common, and 3) most importantly, it is common knowledge you can use pinto beans in chili. What a trade secret does is provide the business owner with a competitive advantage and allows it operate a higher profit margin usually.

Trade secrets are treated differently than copyright or patents. As long as they are kept secret they remain valuable to the business. But that value can diminish when a competitor has figured out how to duplicate the process. Once discovered independently, the once trade secret can be used without any legal action being able to be taken unlike the copyright or patent. If obtained illegally, then the owner has the right to take legal action and claim damages.

How can a business protect its secrets? The first step is to determine what in your processes create a trade secret. Unfortunately, the information gathered in creating a product cannot be labeled as one as it usually represents skill or industry practices. Courts also protect an employee’s rights to carry with him his experience from one employer to another or her own business.

The second step is to write them down in a log and indicate who knows the secret. The business owner needs to make sure all the people on the log understand the importance of the secret to the business and they are not to disclose the information.

While no protection plan is entirely safe, the starting of one should indicate to the staff the owners are serious about protecting the secret and its importance to the business.

The Right Time

Right time

Right Time – Photo (CC) by thornier, on Flickr

When is it the “right time” to open a business? When is it the “right time” to add a new product line or expand? When is it the “right time” to hire your first employee or your next 25 employees? When is it the “right time” to sell the business or close the doors?

The “right time” question is a common one. Business owners want to maximize their chances of success or growth and minimize their potential downside.

The answer to the question though is always the same, there is no right time. You might have a better time to make a move based on your motivation, resource base, or economic conditions just as there are times where things will just be somewhat more difficult.

Typically when a business owner asks me if it is the right time, we dig a little deeper. Often the digging leads to their wanting to find the perfect time.

The reality is there is no perfect time. Often someone waiting for the perfect time just isn’t ready to take the step. They have planned and planned but simply cannot move forward. It is the fear of the unknown. Admittedly, you can’t, or shouldn’t, make your move without looking ahead and planning, but there comes a time when additional planning provides little in terms of increasing the chances of success.

The other common time owners ask about the right time is when they think having the right time will allow them to avoid planning. The rationale is that if outside factors are positive a shortened planning process, or even no planning, is needed. Here again the reality is that thorough planning is necessary even in the best of times.

So if you are waiting for the “right time” to make your decision, quite often the real reason behind your question leads back to your planning. Either you want to skip it or are so enmeshed you can’t move forward.

The bottom line is there is no right time, just better or worse times. In either case, good planning is the best thing you can do to maximize your chances for success.

I’ve Got Lots of Time

clock face

Time (CC) I_Believe_, Flickr

So here it is Wednesday, the day our team, Entrepreneurs and Their Communities, posts its regular blog. I have known it was coming. And I have told myself to get started or at least to think about a topic.

My answer? You guessed it, I will start tomorrow! But now the time is here and I am scrambling. So let’s talk about procrastination.

Procrastination, from Wikipedia, is “practice of carrying out less urgent tasks in preference to more urgent ones, or doing more pleasurable things in place of less pleasurable ones, and thus putting off impending tasks to a later time, sometimes to the ‘last minute’ “. And that pretty much describes it. I had a great mentor and friend who, when faced with a large, major task, told me that was the only time she had a sparkling clean apartment and went routinely to exercise.

This same driving force is why we often need to remind business owners to work on their business and not in their business. Stocking shelves, unpacking boxes, and rearranging the displays are important but is it really what will move your business forward?

As humans, most of us are driven more by short term issues, tasks or pleasure. This is not to say these things are not important BUT looking ahead, planning ahead, and working ahead offers so much relief. It lowers your stress and gives you time to think about what you have done. Most importantly, business studies show that forward planning and working is linked to greater success. I suspect I may look back at this post and think about everything else I should have said at some point in time.

So how can you stop yourself from putting off the important tasks?

The first step is to recognize you are doing it. Business owners wear many hats (and the smaller your business, the more hats you wear). Every task you do is good for your business. That includes cleaning, stocking shelves, and straightening up your desk. But listen to your thoughts. You know there are things that probably are more important.

The next step is doing something to get you on track. For me, I need to keep a to-do list and regularly prioritize what is on that list. (And yes, I am old school as my list is on paper.) There are online tools that work well but find what you are most comfortable with. For me that is paper. My list is fairly comprehensive but it is the only way I keep things together. I put dates and priorities on the crucial items. It is my routine to check the list every day both adding and deleting items as well as reshuffling existing items based on changes in my life.

Realize that you need to be flexible. Priorities change. Opportunities come along.

I also have to plan when I am going to do certain things during the day. I get lots of email and social media every day. It took some time but I know it isn’t important that I read every piece that comes in. Use tools to screen and don’t be afraid to hit the delete key.

And the big one, learn two things: 1. How to say no; and 2. How to delegate (And that means delegating and giving authority and responsibility and not second-guessing all the time).

Well, there it is. My life as a procrastinator and what I have done to work around it. I and the other readers would love to hear your tips on how to handle this issue.

And as I leave, you can join me as I repeat to myself – I won’t do this next time, I won’t do this next time, I won’t do this next time.

Valentine’s Day – Thinking of . . . . Business??

Valentine heart

Photo (CC) by moonlightbulb, on Flickr

Just before Valentine’s Day for the past 10 years or so, my phone will ring a few times with a reporter on the other end wanting to discuss couples and being in business together (probably not how you expected that sentence to end).

Copreneurs, or couples in business together, seem to be a fascinating topic this time of the year. Most writers are interested in knowing if there are more or fewer couples operating a business together? Another popular question is why do they do it? And the third most common question is does it make for a stronger business?

Considering the copreneurial couple is not a new topic. Two authors, Barnett and Barnett, in 1988, coined the term copreneurs. The first chapter of their book, Working Together, sets the basic assumption for why they do it. The title of the chapter is “An End to Separate Lives and Separate Agendas.” The idea of working together is considered utopian with both spouses spending time together at work and at home.

My colleague, Dr. Margaret Fitzgerald, and I have been exploring this unique business structure for over a dozen years. In our work, copreneurs made up about 1/3 of all family businesses. That may mean 1.5 to 3 million family businesses or more are owned by such couples. Yet anytime such claims are made, you need to consider the definitions being used. One common means of defining copreneurs is by ownership. Such data is more common than what we used and is often considered an appropriate proxy. Yet ownership does not define involvement in the business which we considered important. Our definition asked if the spouse was a major decision maker. Both individuals also had to be working in the business.

But is it utopia? That question is much harder to answer. In our study, copreneurs made less income but were nearly as satisfied with the success of their business as were other family business owners. This may have come from the fact that copreners feel more strongly that the business is a way of life and not just a way to earn income. Income is less of a driving force as being able to achieve a blended relationship both at work and at home. This question really depends on how the couple choses to define success.

Being a copreneurial business has it difficulties though. Some couples express reservations about whether or not they could make this type of ownership work. Those that try it discuss issues such as role clarification and the need to capitalize on the skills of each person as being important. Most people approach me with a traditional structure in mind with the husband as the business owner and the wife working in the business. Yet we find that situation is often reversed, again based on skills and who holds the strongest passion for the business.

Is running a copreneurial business a good option? It may or it may not be. The couple, not those of us on the outside, must measure the positives and negatives in doing so. And just like not all relationships remain together, not all copreneurial couples remain in business together. The personal relationship continues but the business one does not. And the reasons why such businesses start and stop remain hazy. We know business income has some influence as does the personal relationship remaining intact. Additional understanding of such business relationships requires more evaluation.

So for you copreneurs, enjoy this Valentine’s Day as you greet the customers, tend the till and stock the shelves. To everyone else, you only have candy, flowers, dinner and cards to get you through.