Most service-based businesses (consultants, speakers, accountants, lawyers, etc.) who have been in business awhile have found themselves in a bind that sounds great to everyone else: you have so much business that you cannot handle it all yourself.
While seemingly better than struggling to get clients, it is still stressful, and if you are not careful, will lead to overwhelm, lower quality work and eventually burnout.
Underneath this busyness though is a hidden gem: you may have an approach, model, program or practice that is really working and could be a candidate for a licensing or certification model.
What is licensing?
According to the official definition on Investopedia, “Licensing is a written agreement entered into by the contractual owner of a property or activity giving permission to another to use that property or engage in an activity in relation to that property. The property involved in a licensing agreement can be real, personal or intellectual.”
For most service businesses, this means licensing a specific program or approach for use by other independent service providers, or for trained staff inside a company. It often includes a train the trainer or certification process to ensure the licensed material is being delivered with accuracy and integrity.
My friend Michael Bungay Stanier has used a train the trainer model with some of his corporate coaching programs at Box of Crayons.
There are lot of specific coach training certifications, like the Mayo Clinic Wellness Coach Training Program.
Licensing can apply to a brand name (Entrepreneur shares that 90% of Calvin Klein’s $16 Million dollar revenue comes from licensing their name to underwear, perfume and jean manufacturers).
Name and product licensing require a large, well-respected brand and audience.
For most service businesses, the thing being licensed is a specific program, method or approach that has been successfully used over time to great results with a large number of clients.
What is certification?
Certification is a specific training process that the licensor uses to ensure that the licensee is delivering the materials with accuracy and integrity.
The certification process can include:
- The licensee completing the program as a participant
- A “train the trainer” process to teach them how to deliver the materials
- Proof of competence through interviews, or submitting audio or video of them delivering the material to an audience
- Ongoing communication with the licensor that includes best practice tips, marketing advice where applicable and updates to materials.
What are the building blocks for licensing and certification programs?
If you are interested in exploring licensing, this is what you have to look forward to:
- Codify your programs, processes and methods
Get your methods out of your head and down on paper. Document the specific methods, tools and processes that you use to get results with clients. A good way to do this is to talk through your process with a colleague who can document steps on a flip chart or whiteboard. Then flesh out these steps with details about what happens at each step.
If you are planning to license a program, ensure that the program materials are well-defined, error-free and robust.
- Define your audience(s)
Depending on what you want to license, it is important to define your specific audiences. Certifying independent coaches or consultants is very different than certifying trainers inside a large corporation.
- Test the waters
When your programs, processes and methods are well-documented, test them out by teaching them to a sample audience. This does not have to be a group that will eventually license the materials, but it can be.This step is important to ensure that your ideas and methods are clear, error-free, and that all necessary information is out of your head and documented in the process. It is normal as the subject matter expert to assume that everyone has your training and experience, but this is NOT the case. Document everything.
- Create instructional materials (including and up to a train-the-trainer program)
A train the trainer model has concrete assets like program and instructor guides, learning aids, video modules for the licensed instructors, and resource guides.In programs designed for the B2C (business to consumer) market, many programs also include marketing materials and support to help licensees sell the programs.
- Decide on pricing
Pricing in licensing agreements is based on a variety of factors:
- The value of the program in the eyes of the licensee: how will this enable them to reach their business goals, make or save them money?
- The volume of the licenses for a given client
- Industry norms – you can choose where your program falls in terms of low-end, mid-range or high-end
- What is included in the licensing and certification process – in-person training, coaching, follow up or concrete materials like workbooks can drive up the price of the certification process
- Define certification process
Design your certification process based on your assessment of what is required for licensees to use the materials effectively.Many certifications include:
- Application criteria for ideal clients, including prerequisite training and education
- Train the trainer program
- Observation and testingSome licensing certification programs are designed with annual renewal, that include licensing fees, proof of continuing education or coaching hours. This is intended to ensure that the licensee continues to maintain the highest level of competency and ethics when delivering your materials. Often the benefits of re-certification for licensees includes updated materials, new trainings and promotion on the licensor’s website as a certified provider.
- Create licensing agreement
The final and very critical step to licensing is to create a legal agreement that specifies exactly what is covered in the licensing deal. Please do not use a boilerplate agreement you find on the Internet with this step – hire a competent IP lawyer to complete this for you.Here are some examples of what goes in a licensing agreement.
Update bonus tips from IP attorney Ruth Carter:
- Identify the specific things you are licensing in the agreement.
- Register your copyrights and trademarks before licensing them. The filing fees are not cost prohibitive in the U.S.:
- Copyright: $55/work
- Trademark: $225/class of goods or services
- Protect your IP!
Just because you have a license agreement in place does not mean that people will not violate it. I have seen open, egregious examples of large corporations using materials without licensing or written permission.Do searches on your content, and if you find someone in violation, have your attorney send them a letter to ask them to cease using them.
Even if you never choose to license your materials, if you build your service business with an eye toward systemization, you will have a much more powerful and scalable business.
Your tools have the ability to impact far more people than you could possibly serve on a one to one basis.
Licensing requires work, but can be a game-changer for the successful service business.