How to Find and Assess Potential Licensees

How to Assess Potential Licensees

​There are several ways to find a licensing partner but it makes sense to approach who you know within your industry first.   If they are in a different geographic area they won't be competing with you.   Also consider others in a complementary industry who could be good potential licensees.   Here are a few simple ways to find  businesses who could be a good fit to license your product...


  • Search for similar businesses in different areas on Google
  • Check the membership of targeted trade directories
  • Talk to exhibitors at your industry trade shows
  • ​Check classifieds in the business section of newspapers
  • ​Search business social media groups and forums
  • ​Research blogs and newsletters in your business niche
  • Talk  to  others at business networking groups

​Obviously this isn't a definitive list but there are enough methods to start looking for potential businesses that might be good potential licensees.

​Don't ignore direct competitors.    If they are in a different geographic area and only serve their city or  county they could be ideal licensees.   Like you, they know the industry and could be very interested in a licensed system, training or software that has proved successful and has generated good profits for you!

Finding licensees in different areas also enables you to leverage your business in areas you couldn't cover otherwise due to restrictions of time, travel and logistics.   They buy a license for your (IP) 'ready to go' product or system but they are responsible for customer fulfillment and satisfaction.   This means less hassle for you and the potential to receive royalty cheques from the licensee over an agreed period of time as specified in the contract.

Having a great product to license is one thing but of course you need licensees who will buy a license to sell your product.   Before you look for potential licensees, make sure your product will generate enough profit to make it worth their while.   In reality, they are buying a product license to make money.   If it won't do that effectively why would they want to license it?

Assess Potential Licensees

​Assessing Your Potential Licensees

​Always do your due diligence on potential licensees first before speaking to them.   As far as possible ascertain if they are honest, ethical and have a good trading record.     Also, do they have the marketing means to capitalise on your license.   In most cases the more they sell the more you earn in royalties!

Google them and their business for any bad press reviews or  solvency issues.   Obviously most businesses get bad product reviews from time to time. ​ However if  it's disproportionate, that might be a red flag how they might deal with you as a licensee.     If possible, try to get character and trading references from their past clients.   Also check their trading record on Companies House.

Make sure your potential licensees are a good fit for your business.   Give them a questionnaire to find out what their skills and experience are.   Try to find out as much as you can about their business.   Do they have the right attitude, capabilities and marketing systems to maximise sales?   Is their business a good complementary fit to yours?   Do they have good distribution channels and management systems?

If you're concerned about disclosing confidential (IP) due to the need to explain what you're offering as a licensor, ask them to sign a NDA first.   Geographic areas (territories of operation), royalty rate, payment schedules, sales performance, renewals and product rights are all agreed during negotiations.

​​If you think they are suitable and take them on as licensees of your product, try to support  them best way you can.   Provide marketing materials and show them how you get customers.   The more sales they make, the better return for you!


​Before you start any serious  negotiations  make sure  you speak to a  qualified legal professional  who specialises in  licensing and intellectual property.   They know what's needed in the contract and how it should be constructed.   This is vital to protect you, your IP and your  financial return.

Licensee Benefits

How does your Product benefit Potential Licensees?

​Who will their end user be?   A licensee might want to license your product for marketing their own business or re-sell it to generate revenue.   Therefore, to present your licensing opportunity correctly, you need to know who the end user is.

​Does your (IP) solve a specific problem?  ​ If potential licensees  see that your product solves a specific problem in the eyes of their  client's they are much more likely to invest in a license.

Does it lower costs?  ​ Likewise, if ​​​the product developed from your (IP) saves the end user  money, it will have great appeal to potential licensees, especially if the product is in the same business niche.

Does it create a new sales opportunity?   Maybe your information product, training program, app or software creates a new sales opportunity that is a perfect fit for  potential licensees in that business.  

​Does it offer a competitive advantage?  If your product offers some sort of competitive advantage over a licensee's competition, it makes your product very attractive.

​When presenting your product for licensing, always include marketing and duplication costs with  likely profit margins and any other financial considerations.    Presenting a full financial picture will help to prove your product's financial viability and likely return on their investment.

​Consider their distribution channels

  • What geographic area  do their clients live
  • What  are their existing distribution channels
  • ​If  not digital, does your product fit with their products and  distribution channels
  • ​Is your product ready  for their distribution  channels or does it need further development
  • ​How long have their distribution channels been established
  • ​What is the size of  their customer base.   Is it large enough to support your product

​Timing is crucial.   If your product is ready for a licensees market, it can be licensed quickly.   This is a very important consideration before promoting it as  a licensing opportunity.  

If a licensee has got to hang around and wait for you to make it market ready you will probably lose them but if  your product is  ready, it can be licensed so  you and your licensees can start making money!


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    ​Make sure that your product has enough profit potential to attract licensees
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    Network and search for potential licensees on and offline
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    Do your due diligence.   Research a potential licensees suitability before speaking to them
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    Provide  support and marketing materials when you can
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    If the  product has confidential IP, ask potential licensees to sign a NDA before revealing it
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    Assess how  your product will benefit licensees and market it accordingly
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    Ensure  that your product is suitable and ready for their distribution channels


​It's important to keep in mind that you are not just licensing IP, you are really licensing a business opportunity for licensees to make money.     While the features of your product are important, you must emphasize its profit earning potential  and practical benefits it will bring to their business.

As well as the financial and practical benefits, make your licensing proposition a natural fit for their business so they see the value in your product  and how it will benefit their clients.    If they don't understand it and recognise the financial benefits quickly you will lose their interest.

All products ready for licensing can have a free listing on this website. ​ If you need any help with getting your product ready for licensing and marketing it, please don't hesitate to get in touch using our contact page.

About the Author

Stephen recognises the numerous opportunities for experts to license products developed from their intellectual property. His goal is to help them protect and earn from their IP.

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