To put it simply, licensing is renting your idea to a company. Typically, this company is already in business, meaning they are manufacturing, marketing, advertising, and distributing products. Most importantly, they have shelf space in retail stores. The beauty of this business model is that you benefit from this existing infrastructure. Most inventors want to focus on ideation, not running a business. Licensing is an attractive alternative for that reason.

After licensing about two dozen of my own ideas for products, I began sharing my 10-step strategy for licensing success with others two decades ago. Since then, my coaching company inventRight has helped people from more than 60 countries learn how to license their ideas. 

When I travel around the country to speak at inventor groups, I often meet people who have spent tens of thousands of dollars on patents, prototypes, and inventory -- but they're no closer to commercializing their invention than when they began.

Testing your idea to see if it is marketable first is a far better long-term strategy. If you want to succeed at licensing, focus on the following five things.

1. A simple idea. A simple idea is a small improvement or a modification to an existing product. There's no need to reinvent the wheel. Why focus on bettering a product that's already on the market? Because there's a proven market for it, and a good chance your concept can be manufactured using existing technologies. That's important, because investing in new manufacturing equipment is expensive, and companies are risk-averse. The more you can reduce risk, the better your chances of getting a licensing deal are.

2. A great pitch. The good news is that you don't have to be a salesperson. Your marketing materials will do the selling for you, if they're effective. It doesn't matter how much experience you have. Getting your foot in the door is all comes down to how you present your idea. I highly recommend a one-page advertisement, also known as a sell sheet. Your sell sheet should focus on the benefit of your idea; not how it functions or its features. You don't even need an actual prototype right away. You can hire a professional to create a 3-D computer generated graphics that illustrate your concept beautifully at this early stage of the game. (Later, after you receive interest, it may make sense to invest in a prototype.) 

3. Perceived ownership of said idea. Patents are not required to license simple ideas. At my company inventRight, we see a signed licensing deal weekly. In these agreements, patents aren't a factor. Nearly always, the idea has been protected with a provisional patent application only. Provisional patent applications are affordable to file, and you can teach yourself how to write your own with the right learning materials, research, time, and effort.

Reasonable companies today know that the lifespan of most consumer products is fairly short -- much shorter than the time it takes to receive an issued patent. Let's be real. It is nearly impossible to protect a product against online sellers who are keen to knock off successful products with a patent. So why waste your time, money, and energy on one? There are other more affordable tools that are being used to stop online sellers such as trademarks, copyrights, and design patents. (These take time to obtain, so plan ahead.)

I want to be very clear. Licensing a 'big' idea -- like a game-changing innovation -- requires significant time and capital. To establish your ownership, you will need to build a wall of patents and other intellectual property tools, such as trademarks, copyrights, trade secrets, non-disclosure agreements, and design patents. In other words, licensing a big idea demands a completely different strategy than what I am outlining here.

4. Inventor-friendly companies. Some companies are actively looking for new product ideas to help them stay competitive. Others aren't. Only approach companies that embrace inventors. I cannot overstate the following: Make sure to do your homework on any company you are considering contacting to examine their track record. Type in their name on Google followed by 'complaints' and 'lawsuits.' The Internet has made it difficult to hide. However, you still need to look beyond the first page. Initial appearances can be deceiving.

If the company is not active on social media, that's a huge red flag.

Before you begin approaching potential licensees, make sure your idea is a good fit. Don't just throw it out there. Study the company's product line closely and read its mission statement. If your submission is not appropriate, you're wasting the company's time and thus making it harder for the next independent inventor.

5. Persistence. Licensing is a numbers game. Don't expect to license your first idea, your fifth, or even your fifteenth. The more feedback you obtain about your ideas, the better at this you will become. You need to get a dialogue going with the companies you want to invent for. That's how I hit my stride as a product artist. Eventually, the companies I licensed my ideas to let me know explicitly what they were looking for.

So, don't wait. Don't let fear prevent you from getting in the game. Follow the steps above and focus your efforts on contacting inventor-friendly companies. Frankly, licensing is being in the business of rejection. My most profitable invention was initially rejected hundreds of times. Learn to love it, and stay in the game.

Increase your odds by expanding your list of inventor-friendly companies. You can't just reach out to one or two potential licensees and expect success. The thirtieth company on your list might bite.