Business & Investing
Sponsored by

Licensing to a competitor

1,426 Views | 3 Replies | Last: 4 yr ago by one MEEN Ag
ReloadAg
How long do you want to ignore this user?
AG
My wife has a small corporate communication and speech training business and has developed her own training method that she has available for sale on her website for other trainers to license and use. It's a relatively new addition to her physical and long-standing business and so far has one trainer licensed in another city.

Today she was approached by one of only a couple of her chief competitors in our city about wanting to license and use the program as well. She's having some difficulty saying yes though and understandably so.

If she says yes she'd get more revenue from the use of her program but one of her competitors would have her system and could sell he services at a reduced rate.

I'd love to hear some of yall's wisdom and ideas on the pros and cons of this. Thanks.
chris1515
How long do you want to ignore this user?
AG
Institute a required minimum pricing.

Or license it to where she gets a fixed amount for each individual that is presented the material...and then if the competitor wants to charge less, that's his issue.
FarmerJohn
How long do you want to ignore this user?
AG
Could you institute territories and only license to one company in a geographic region? Of course she would be that one in this region. Therefore no direct competition. But sometimes you have to cannibalize some of your sales to introduce a new product. You just don't want to do it for all your sales. So either limit sales in a region or make selling this program your business.
FourAggies
How long do you want to ignore this user?
AG
She should make sure that they don't take credit for her work and morph it into their product. Is her material copyrighted? I'd recommend that the licensing agreement require them give her credit for the material, such as her name or logo on each page. Also they should recognize that she owns the IP, content, and any improvements or additions that they would make to her approach or material.

Revenue wise she should be revenue neutral or make more for the licensor to sell . If she's a sole proprietor, then the licensor can probably outsell or present to more clients than she can.
one MEEN Ag
How long do you want to ignore this user?
AG
ReloadAg said:

My wife has a small corporate communication and speech training business and has developed her own training method that she has available for sale on her website for other trainers to license and use. It's a relatively new addition to her physical and long-standing business and so far has one trainer licensed in another city.

Today she was approached by one of only a couple of her chief competitors in our city about wanting to license and use the program as well. She's having some difficulty saying yes though and understandably so.

If she says yes she'd get more revenue from the use of her program but one of her competitors would have her system and could sell he services at a reduced rate.

I'd love to hear some of yall's wisdom and ideas on the pros and cons of this. Thanks.
Another way to look at this is, what is stopping the competitor from doing this on their own? The future probably holds one of three options. They license your training system, they go develop their own, or they partner with someone else.

Does this competitor have a larger reach? Different audiences? If they develop their own, would the products be about equal in quality? Is what separates your from the competition something that needs to be secretive and kept from the competition?

What is your business's growth model?

Can you tier your training where the base level is licensed out, but the really good stuff/personal time with you answering questions, etc held back to a second tier?




Refresh
Page 1 of 1
 
×
subscribe Verify your student status
See Subscription Benefits
Trial only available to users who have never subscribed or participated in a previous trial.