A patented invention – although very commonly obtained by large companies – can change an individual inventor’s life when it’s first obtained. Aside from the initial excitement and feeling of accomplishment that comes from a first patent, an invention can promise a new, potentially lucrative way to make money. An inventor can end his or her relationship with the patent immediately by selling the patent to an organization who can capitalize on the idea easily. This decision can reward the inventor with a very large, immediate bottom line. However, the inventor that wishes to build a company out of his invention could watch it turn into an empire.
Before the entrepreneurial inventor can watch his or her company grow, he or she has to put its foundation together, which is anchored largely by a business plan. A business plan will define what it is one is looking to sell, how he or she is going to sell it, pricing guidelines, marketability, and definitions of how the business will be structured. If you aren’t far from getting that patent and need to know what is in a business plan, continue reading.
Part One: The Executive Summary
This is the first section of your business plan and probably the most important. In this section, you will describe the fundamentals of your invention and how you plan to build a business around it. In addition to stating the purpose of your business, this is a place of summary, where you can outline the rest of your business plan so that it makes the presentation easier on readers. It’s likely that if you have successfully patented a novel item, then you will gather the interest of venture capitalists. They’ll be most intrigued when seeing this executive summary.
Part Two: The Marketing Plan
This part requires the creativity that you tapped when you first invented your product. You’ll need to answer questions here like “who will buy this product?” and “what strategies are necessary to lure a buyer in?” In addition to this, you’ll need to realistically define what you can expect when it comes to buyer turnout. The investment of money and time put in can equal the amount of revenue taken in, and this is probably the best place to estimate this. It’s very important that when you project these things, that you don’t overestimate. If you are actively seeking investors to take an interest in your product, they will be very actively disappointed if you don’t supply the revenue that you agreed to. This is also a place to exhibit some of your first advertising ideas. Since you know your invention probably better than anyone else, the roots of your advertising campaign should lead to you. In the future, you may want to tap other creative outlets – particularly experienced marketing personnel – but if you’ve got a great idea for letting people know how good your product is, this is the place to describe it.
Part Three: Financial Projections
Although you know you have a great product ready to be shown to the world, can you identify just how much money it’s going to bring in at first? This is never an easy question to answer. If you’re new to the business world, it’s best to contact a friend or colleague who knows about making projections like this so that they can help you do proper research. It has been said here before, but it bears repeating: be realistic. Venture capitalists will form better relationships with you if you do not overestimate too much. In addition, if you plan to market this product locally, nationally or internationally, do research about the associated regions; don’t get data that may misrepresent what’s the truth.
Part Four: Hiring Strategy
When it comes to selling your invention, you’re going to have costs. These include operational costs, material costs, and labor costs. This is the section where you estimate just what personnel you’re going to need to meet your goals. Most investors start small and work their way up. With repeated successes and the spreading name of the business, the size of the company will grow. Still, in the initial business plan, you must outline the most immediate staffing needs and not those that _could_ happen.
These are all part of a quality business plan that will entice any investor.
