What Are the Advantages and Disadvantages of Licensing?
Quick Answer
Licensing establishes businesses and individuals as reliable and trustworthy but leaves them subject to regulations and with little control over markets and even personal conduct. Licenses afford businesses and individuals some degree of legal protection by ensuring that their ideas and products are not reproduced by others or taken without credit.
Continue ReadingFull Answer
With a license, companies can enjoy relatively continuous streams of royalty and revenue. Additionally, having a license makes them more attractive to investors and consumers. However, licensing has its share of downsides too: licensing may leave companies with little say over where their products are sold and who may purchase them. The costs associated with getting and retaining licenses may be quite high, which presents a problem primarily for small companies struggling to get started. According to the Entrepreneur Network, licenses can give companies more visibility and access to a consumer base. However, they can also restrict product sales outside certain markets and regions. This can pose significant problems for companies trying to expand operations, particularly to markets overseas. The cost of relicensing can also be expensive, as can the process of applying for different licenses. Finally, companies take a risk during the licensing process: if sales are not high enough, their royalty earnings might not cover legal expenses and other services.
Learn more about Managing a BusinessRelated Questions
-
Q:
How Do I Get a Pub Licence?
A: Getting a pub license begins with understanding the regulations governing the sale of liquor and licensing of pubs in your state. Relevant information is a... Full Answer >Filed Under: -
Q:
What Are the Advantages and Disadvantages of Information Technology?
A: Information technology, or IT for short, may help businesses grow and attract new clients and expose individuals to key networks, but when used improperly,... Full Answer >Filed Under: -
Q:
What Are the Rules for Counting Employees?
A: When counting employees, businesses with at least 50 full-time workers are applicable large employers, and are subject to the ALE rules and regulations, ac... Full Answer >Filed Under: -
Q:
How Do You Know Whether You Have to Fill in a UCC Form?
A: Generally, individuals and businesses complete and file Uniform Commercial Code forms when they are parties to a commercial transaction between a secured p... Full Answer >Filed Under:
You May Also Like
-
Q:
What Are the Advantages of Panasonic's Link2Cell Technology?
-
Q:
What Are Some Advantages of Portable Hunting Blinds?
-
Q:
What Are Some Ways to Assess Performance?
-
Q:
What Are the Advantages of Heavy Duty Beach Umbrellas?
-
Q:
What Is the Concept of a Born Leader?
-
Q:
What Are the Advantages and Disadvantages of Market Segmentation?
