Q: I have a business concept that has been very well-received. However, to take the idea public would require substantially more resources than I have currently allocated for this project. Should I leverage the business concept to sell it outright or package it in hopes that an investor will take us under his or her proverbial wing? Do you have any information on how often venture capitalists buy business concepts, vs. funding a project that will develop a concept for them?
--J.B., Renton, Wash.

A: Business concepts are very rarely bought outright, especially without having test-market studies and prototypes to prove that the idea is likely to be profitable. A huge amount of hard work, time, and money typically exists between an idea that sounds good on paper and a viable product, service, or business that will make an investor a good return on his or her money.

"There are loads of good ideas out there. And often the people who have a good idea first are not the ones who wind up making money on it," says Peter Cowen, an entrepreneurial consultant and investment banker in Westwood, Calif. "There have been a couple of rare exceptions where really hot business concepts were sold outright. But probably 99% of the time, a concept that's dreamed up by someone who is not already a major player in that particular industry isn't worth anything on its own."

If you want to turn this concept into a business, here's what you should do: First, you must own the proprietary rights to your idea by documenting how you came up with it -- whether it's a new technology, a unique product, or even a recipe. You can buy an "inventor's journal" at an engineering supply store or a legal stationery store to help you record your idea and how it was created.

Then, you'll want to protect your intellectual property -- be it copyright, trademark or service mark, or patent protection. Unless you own the rights to this idea, most large companies and investor groups won't even talk to you. Why? If they later produce something similar, they fear you will sue them for ripping off your idea, since you introduced them to the concept first.

A large local library should have the resources to search and determine whether someone else already owns the rights to this idea. If no one does, then you'll want to file your idea for legal protection with the Library of Congress' Copyright Dept. or the Commerce Dept.'s Patent & Trademark Office. Getting legal protection typically involves filling out forms and paying a nominal fee. In complicated cases, you will want an attorney who specializes in intellectual property to handle this.

Once you own your idea, then put together a plan that shows would-be investors your target market, your profit potential, and your marketing ideas. If you need to demo your concept, construct a three-dimensional prototype. And if you can attract key players in your industry to partner with you when you take this concept to investors, it'll boost your credibility.

One final protection: Before you share your idea with partners and would-be investors, ask them to sign a confidentiality agreement. They may or may not honor it, but it's one more safeguard to ensure that your hard work doesn't go unrewarded.

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