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.

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Small is Big in Business

Small Business WeekWe probably pass by several small businesses sometime during our day.

While we appreciate the business for the products and services it offers, I would guess that many of us do not think about what small businesses mean in economic terms. Typically, we think of the large companies as the major component of the U.S. economic engine. Or maybe you just haven’t thought about it at all.

This week, May 12-16, is Small Business Week in the U.S. It is a time to recognize these businesses and what they do for us.

Did you know that small businesses:

• Represent more than 98 percent of all business firms
• Employee about 50 percent of all U.S. workers
• Generate more than $12 trillion in receipts each year

These are powerful numbers that do not even take into account the technology they have created, along with new jobs and growth opportunities, and their status as an economic driver for a community.

Small-business owners not only provide dollars and jobs but often can be found supporting local improvement efforts, taking on a leadership role in civic and public organizations, and being available when a call for assistance comes in.

Besides being important to the larger economy, small businesses are a prime entity that supports the owner’s family and the families of his or her employees.

Finally, the small business represents an individual’s dream. Owning a business can mean using certain skills and abilities, the ability to generate income or the opportunity to take a good idea to market.

Given the importance of the small business, growing and maintaining its strength is a high priority. This means working to ensure a stream of new businesses constantly is entering the marketplace. New businesses mean more individuals are trying something they have wanted to do. It also means local revenue and more jobs.

So during Small Business Week, do two things: First, reflect on how the small business is supporting the local, state, national and international economies. Second, stop by and tell local small-business owners how much you appreciate what they are doing.

National Small Business Week – Power of Business helps celebrate!

National Small Business Week – Power of Business helps celebrate!

Get ready for Small Business Week – May 12-16

Help us celebrate National Small Business Week by joining in the conversation during this special week. Live chats everyday – Businesses sharing their successes and offering tips to be in business!

No NEED to Register! Just join in the conversation!

Click on the appropriate link at 12:15 pm ET/11:15 am CT/10:15 am MT/9:15 am PT
◾May 12 – AgVise Laboratories – Preparing for Disasters – http://go.unl.edu/pobchatmonday
◾May 13 – ProPrinting – Going into Business – http://go.unl.edu/pobchattuesday
◾May 14 – Hudson Chatham Winery – http://go.unl.edu/pobchatwednesday
◾May 15 – Fat Toad Farm – Using Social Media – http://go.unl.edu/pobchatthursday
◾May 16 – George Paul Vinegar – Asking for Advise – http://go.unl.edu/pobchatfriday

See you there.

Reblogged from Huskerpreneur

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.

Reputation and Customer Satisfaction

Reputation eats your brand

Photo (CC) by David Armano, on Flickr

Business owners know a satisfied customer is more likely to be a repeat customer. And a dissatisfied customer can only hurt your reputation.

If that was the end of it, business owners might not have to worry as much about their reputation. But it doesn’t. Research suggests that a satisfied customer will tell about five other people about their experience. Dissatisfied customers will tell approximately 20 other people.

Those numbers, especially for the unhappy customer, are why business owners are continually urged to do everything they can to maintain high standards for customer satisfaction.

Yet those numbers represent only those people who we told mostly by word of mouth.

Today the potential audience that people can tell is much larger. Why? Welcome to the impact of social media.

There are two reasons why social media is so powerful in terms of your business reputation. First, look at the size of the audiences. We have all heard about certain viral customer complaints that went viral. Certainly those can have some substantial impact but what about a single negative comment just among friends.

Let’s look at a couple of examples. I routinely use TripAdvisor to post reviews of restaurants and hotels. I recently made three posts. According to TripAdvisor, within 10 days approximately 60 people had read those reviews.

Let’s move on to social media such as Facebook. Now the potential reach gets much bigger. For example I have about 250 friends. Already the audience is four times greater. But now friends tell their friends. If only 10% pass of my friends share the post with perhaps their 250 friends, 6500 people have now read something negative about your reputation.

And if sheer numbers aren’t enough to make you cringe, consider the second issue. People believe what they read online. Although the rate varies by generation, about 50% of baby-boomers and 80% of millennials accept the reviews they find online as valid. And that rate only goes up if I know the person writing the review.

More than ever before, customer satisfaction makes a difference in terms of reputation. And the trend is going to keep on growing.

So: (1) keep your customers satisfied and (2) monitor your online reputation. The time spent doing these will be time well spent.

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.