Turning an Invention Idea into Money

Lesson Ten: How Do I Make a Business Plan?

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Introduction - About These Lessons

Why Have One?

If you have decided to manufacture and sell your invention yourself, or are setting up a business in connection with your inventing. You will need to create a business plan, which will be essential when you try to raise capital.

What Exactly Is It?

The business plan is a written document that clearly defines the goals of a business and outlines the methods for achieving them.
It serves as a business roadmap that:
  • Acts as the management and financial blueprint for a business start-up and profitable operation of a business venture.
  • Explains specifically how a business will function and details how a business will be capitalized, managed, and marketed.
The business plan should include an executive summary, supporting documents, and financial projections. Many experts would suggest that you get started on your business as soon as you have filed for your patent. In the process of preparing a business plan, you will gain a greater understanding of your invention's standing in the marketplace and how it compares to the competition.

What Do I Write?

The body of the plan can be divided into four distinct sections:Be prepared to put the time necessary into the research needed to write your business plan.
You will be covering a long list of details including: your inventions's description and function, costs and profits, and how you/or someone else will manufacture it, potential size and description of markets, competition comparisons, distribution, patent status, timelines of developments, staffing, how much money you will need and more.

What If I Don't Want To Start a Business?

Where money is scarce as it is often the case with independent inventors - knowledge is power.
Even if you are not planning on marketing your invention yourself - having a marketing and business plan will help you to better sell your invention to interested parties. You will know what to say if someone asks, "Is there a market for your invention?" If you do start business in connection with your intellectual property a business plan precisely defines your business, identifies your goals and serves as your firm's resume. It will help you allocate resources properly, handle unforeseen complications, and make the right decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan package. Additionally, where applicable a business plan tells your sales personnel, suppliers and others about your operations and goals.

Okay, How Exactly Do I Write One?

To help you write your plan we have the following online tutorials with templates. Marketing plans are often included with business plans.

One Last Thing

As you venture out into the marketplace will be asked if you have a business plan. Do consider your plan a professional document and be prepared to be both concise and detailed. This document should boost investor trust in you and help you in any sales pitches you may have to present. You will need your business plan for raising money.

Continue > Lesson 11: Raising Cash

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Your Citation
Bellis, Mary. "Turning an Invention Idea into Money." ThoughtCo, Feb. 16, 2015, thoughtco.com/turning-invention-idea-into-money-1991390. Bellis, Mary. (2015, February 16). Turning an Invention Idea into Money. Retrieved from https://www.thoughtco.com/turning-invention-idea-into-money-1991390 Bellis, Mary. "Turning an Invention Idea into Money." ThoughtCo. https://www.thoughtco.com/turning-invention-idea-into-money-1991390 (accessed October 24, 2017).