Begin with a Business Plan
You came up with a million dollar idea. The first step to success is to
develop a business plan.
business plan is essentially a road map that will help you navigate the
difficult road that lies ahead and lead you to your ultimate destination: to
make your invention successful and profitable. A business plan should never be
cast in concrete. It is a living, changeable document that should adapt to evolving
business conditions. This changeability, however, should not be taken as an
excuse to skimp on how much effort you spend on writing the plan. It should be
as thorough as possible. The better and more detailed your plan is, the more
likely your endeavor will be successful.
plan may have to be written differently and tailored to the following audiences:
Yourself. You will find that carefully stating your goals and clearly
planning your project is invaluable. You will use your plan as a road map to
help you focus your ideas, organize yourself and plan your use of time.
investors. Your plan will help potential
investors evaluate your idea and hopefully conclude that it is a winner and
that they should invest in it.
US agencies may be soliciting
proposals regarding the problem solved by your invention. Your business plan
will become part and parcel of your proposal to these agencies.
plan should cover the following seven topics:
iMagination. The plan should include a clear description of your
invention and the problem it is intended to solve.
Manufacturing. Your idea may be enticing in principle, but when it
comes down to the nitty-gritty of fabricating it, it may cost too much. Your
plan should describe how your invention will be manufactured and how much it
will cost to make. For initial production look into manufacturers close to
home. You will be able to communicate with them more easily and ultimately you
will have better control over the final product.
Marketing. To make a profit, your product must sell. Your plan
should include the following:
an analysis of the business environment;
a description of the industry;
government regulations regarding your product;
the segment of the population who will buy your
sales methods (e.g., Web, retail…);
the product’s sale price;
liability coverage in case of problems.
Money. If you intend to pay investors with stock equity,
you should explain how, given their initial investment and your own resources, this
stock will grow in value and therefore lead to a high exit valuation. The
explanation should include competitive advantages of your invention in the
marketplace as well as upcoming growth opportunities.
Management. A capable management team can make the difference
between success and failure. Make sure to team up with people who can make your
invention a success. List your team members, with their respective positions as
well as their biographies including their accomplishments.
Milestones. Provide a time chart showing your goals and intermediate
milestones, also describing how much money, personnel (man-hours), time and
equipment are required for each one. Identify the critical paths, that is, the
steps which you think will be bottlenecks in reaching your goal.
Monopoly. When your invention becomes a success on the
marketplace your competitors will be tempted to copy it. Make sure to describe
in your plan how you intend to protect your intellectual property. A patent is
the best protection. It will give you a monopoly on your invention: the right
to exclude others from making, using, selling, offering to sell, and importing
the invention in the US. (35USC 112).
newsletters and a lot of information for the small inventor go to: www.patentsandventures.com.
If you have any question you can contact me at (858)259-2226
or email me at email@example.com.
should not be construed as legal advice. ©2014
by George Levy