Tutorial: Creating Business Plans for Independent Inventors

Introduction: What Goes Into A Business Plan

Four employees working together on business plan
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If you have decided to establish a business to manufacture or sell your own invention, you will need a business plan to raise money and help your new business flourish.

 

What Is Included In A Business Plan

New and potential new business owners need to know what should be included. There are four main parts to a business plan: the description of the business, the marketing plan, the financial management plan, and the management plan.
You should also create a executive summary, and include supporting documents and financial projections.

Below is an outline of what goes into a business plan, followed by pages of detailed descriptions. This is only intended as a guide when developing your business plan, every situation is unique - make your business plan unique as well.

 

Elements of a Business Plan

  • Cover sheet
  • Statement of purpose
  • Table of contents
  • Descriptions of your business
  • Marketing plans
  • Describe the competition
  • Operating procedures
  • Personnel
  • Business insurance
  • Financial data
Your financial data should include:
  • Loan applications
  • Capital equipment and supply list
  • Balance sheet
  • Break even analysis
  • Income projections (profit & loss statements) that could include a three-year summary, details by month and first year, details by quarters, second and third years, and the assumptions upon which your projections were based.
  • Current cash flow that could include details similar to your income projections.
    You should include supporting documents for example:
    • Tax returns of all principals (you and your partners) for last three years.
    • Personal financial statement (all banks have these forms)
    • Copy of proposed lease or purchase agreement for building space
    • Copy of licenses, patents, and other legal documents
    • Copy of the resumes of all principals
    • Copies of letters of intent from suppliers, etc.
    We have provided worksheets that will help you with write certain elements of your business plan and examples of finished plans.

    Next: How to Describe Your Business