Profit Estimation

Estimate Your Profits:

What Percent Of The World’s 6 Billion Population

Can Benefit From The Invention?

To start, try guessing your costs. Then add 50%.

How high might the market pay, if you have exclusive rights?

The wholesale price, minus all your costs, equals profit per product sold. Multiply the profit from each invention by the number of sales each year.

Scenario #1:

0.0001 Billion units are sold at $40 profit each. This brings profits of four million per year. The four hundred million is the total profit if one out of 6,000 people in the world bought the product each year. Over ten years the total royalty would be forty million dollars.

Scenario #2:

0.1 Billion units are sold, with each earning $4 profit. This brings royalties of four hundred million per year. The four hundred million is the total royalty if one out of 60 people in the world bought the product each year. Over the first ten years, total profits can be four billion dollars.

Consider:

	Calculate additional revenues, because new technology often needs to be updated or replaced.
	Does your license cover future versions of the invention? Improvements to manufacturing costs, generic software operating systems, and more, are making it cheaper and easier to produce inventions which rely on existing technology.
	Patents can be valid for approximately 18-20 years.
	Consider the demand, and how many units may be sold to a portion of the world population which reached 6 billion in 1999. It’s expected to be 7 billion in 2013. Lesser developed countries are getting richer.
	Consider other aspects. Then improve your estimate.

Come up with a draft plan for management and or investors.

Profit estimate wholesale pricing. Creativity business philosophy trust ethics nurtured, risk taker, passion.