Commercial Success: Everything You Need to Know
When considering commercial success as it relates to an invention, the evidence should show that the success was due to the invention itself.3 min read
2. Risk Management
When considering commercial success as it relates to an invention, the evidence should show that the success was due to the invention itself. This means it's in a market where freedom of choice is available to consumers and that the success isn't due to heavy advertising or promotion, a shift in advertising methods, or other events.
Areas to Consider for Commercial Success
The first step toward commercial success for an invention is to manage expectations. This means clients shouldn't expect free services when you expect to charge for the services. When quoting fees, be clear that the fee isn't all-inclusive. The next step is managing the client. This includes paying fees in a timely manner and accepting and working with the advice that you provide.
For a business starting out with no clients, a useful way to get the business started is to buy a block of fees. Obtaining clients can be an involved process with a list of things to consider, such as:
- What is the quality level of the clients?
- What is the client's age group?
- Is your block of fees clients nearing retirement age?
- For vendors, what's the level of fees?
Obtaining clients is beneficial, but retaining them is, too. Interacting with new clients supports client retention and maximizes the new source of income. Maintain a good working relationship with clients, address their concerns and dissatisfaction immediately, and don't neglect them in the name of expansion. Listen to your clients by providing a feedback form for information about the good and bad aspects of your business.
By providing regular newsletters, you'll be interacting with clients by keeping them apprised of information and engaged in the business. Create a well-planned and informative website that focuses on the types of things new clients will find interesting.
Client Engagement Letters
Creating an engagement letter clarifies what you will and won't do, the cost, the basis of the fees, and any other essential information.
Limitation of Liability
A firm can agree with the client to have a maximum amount set for contractual liability. If liability limitations are put in place, inform the clients immediately. You'll want to be certain that any provisions are in compliance with the Unfair Contract Terms legislation.
Client Indemnities on Fees
In some situations, a firm's directors are asked to sign an indemnity in order to pay fees if the company were to go into liquidation.
It's important that client expectations are within reason. Clients need to understand how long a job takes and how much it costs. Otherwise, there will be an expectation of a faster turn around and cheaper fees. Keep prices up-to-date by regularly reviewing the fee levels/schedules.
Since your clients should be aware of your fees, they should also understand that fees are expected to be paid on time. Manage your client relations in a friendly manner by letting them know this up front. For commercial success, clients should pay for completed work as soon as possible. If not, the company runs the risk of funding debtors.
End-of-service billing is due once the job is completed. It includes a fee, corporation tax, and personal tax. A benefit of end of service billing is that the amount payable can be broken down into smaller amounts.
While this may seem the same as end-of-service billing, it's different because all services are billed at once. Annual billing is a common practice. It has two drawbacks: It delays fees and impedes cash flow.
The main point affecting monthly billing is that the process generates many different bills. This can slow down the administrative staff.
This billing option has several advantages, including:
- There's an agreed monthly fee.
- Clients prefer it.
- It provides a positive cash flow.
- You'll have access to income before taking on the job.
The client agrees to a fixed-fee arrangement for services. These services are outlined in the engagement letter to ensure that if any additional services are rendered, they'll be billed separately. Fixed fee billing is often set up to be paid monthly.
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