Five Tips to Turn Your Light Bulb Moment into a Successful Business

The inventors of blue and white light-emitting diodes (LED) recently received the 2014 Nobel Prize in Physics. The groundbreaking blue LED not only made the screens on our smartphones and televisions possible, but more importantly resulted in the creation of a light bulb that can last 25 times longer than traditional incandescent bulbs.

One of the recipients, Shuji Nakamura, a researcher at UC Santa Barbara’s Solid State Lighting and Energy Electronics Center, was able to turn the invention into a successful business. His company, Soraa, sells white LED lamps and light fixtures, which were made possible by his invention.

While not every entrepreneur can come up with an invention that will revolutionize the world, it is possible to turn a good idea into a successful business. Below are a few tips for turning your light bulb moment into a tangible business venture:

Assemble an experienced team: Entrepreneurs can’t do it all. When choosing a business partner, focus on finding someone who complements rather than replicates your skills. If you are a “big picture” person, it may be helpful to have someone on board who revels in the details. It is also advisable to start cultivating relationships with experienced advisers, such as accountants, attorneys, and technology professionals, early in the process.

Evaluate your finances: Every business needs funding. Whether you plan to invest your own funds or solicit investments from others, you need a budget and a plan. Key questions to consider include how much money you will need to get off the ground, where and when you plan to get it (bank loans, “friend and family” round, venture capital funds, angel investing, crowdfunding, etc.), and your timelines for revenues and profitability.

Create a business plan: It can be challenging to turn your idea into a solid business plan. When courting investors, it is important that your business plan provide them with the information necessary to determine whether your business would be a worthy investment. Additional key questions to address include: what will your product or service accomplish; how is it different from what is already on the market; how will you market/sell it; and, who are your competitors. The plan should also include information about your proposed organizational and management structure as well as your financial projections.

Assess your legal obligations: Every business has compliance requirements. Depending on the industry in which your business operates, you may need to obtain permits and licenses. The legal structure you select (i.e. corporation, partnership, limited liability corporation, etc.) will also determine what other legal requirements you need to satisfy. Of course, once you start hiring staff members, you will also need to comply with a host of state and federal employment regulations.

Protect your intellectual property: When it comes to protecting your business idea, it pays to be proactive. Even at its earliest stages, nearly every business has valuable intangible assets, such as inventions, logos, and a marketing plan. If you fail to secure the proper protections, you may have no legal recourse should a competitor try to use assets you developed first.

If you have questions about this post or would like to discuss how to foster the success of your start-up venture, please contact me or the Corporate Transactions & Business attorney with whom you work.