The Business Plan

The first few months in the life of a project are crucial in turning an idea into a prototype, as that’s when an inventor will be raising financial support for his or her invention. The first step in securing funds is developing a business plan for a project. This not only tell investors what they will get out of the deal, but it also lets them know that the inventor is serious about moving his or her project forward. The more detail is put into a business plan, the more results it will yield.

Investors will likely be people who are not well-known to the inventor, so some back-story on the invention and the plan to build and market it are crucial. Here is a general outline for an invention business plan:

  1. Cover Page
  2. Table of Contents
  3. Executive Summary
  4. Financing Proposal
    1. What funds do are currently held?
    2. How much additional funding is needed?
  5. Company Description
    1. For an existing company, explain your history and any current/pending patents you have
  6. Industry Analysis
    1. What is the size of the target market and how is it changing?
  7. Market Analysis
    1. Product
      1. What will consumers like/dislike about the product?
      2. Does anything come with the product?
      3. Are there ideas for the future?
    2. Customers
      1. Describe the target customers using demographics
    3. Competition
      1. Who will be the primary competitors?
      2. What will the proposed product do better/worse than they do?
    4. Marketing Strategy
      1. How will the product be promoted and distributed?
  8. Management & Organization
    1. Briefly describe the management structure if one exists
  9. Operational Plan
  10. Financial Plan
    1. Utilizing the information included in the Business Plan, what are the projected figures for the next 12 months and extended future?
  11. Supporting Documents

Some of this information may be unknown, but it is important to include as much information as is reasonably possible to put the investors at ease about investing in the proposed product. The most important information to include is the potential return for the investor and when it can be expected!