General description

An effective Invention Business Plan is an inventor’s best tool for efficiently navigating through the invention process. As a seasoned inventor, I’ve learned that an idea isn’t perceived as a viable business opportunity until it can be effectively communicated on paper (or any other readable format). No matter how great your idea is, most people expect you to get it in writing. When I was new to inventing, I had no idea what that meant. I searched but couldn’t find any universal format to document my ideas.

When I submitted my concepts to invention hunters, licensing agents, manufacturers, retailers, engineers, and the patent office, they asked many different types of questions. The questions ranged from “What problem does it solve?” to questions that required extensive research like “Who is your target market?”

Fortunately, with my business background and experience writing business proposals, I was very familiar with the answer to such questions. Therefore, to save time, I decided to consolidate all these questions into a universal format that could be used and/or adapted for any audience within the invention process.

In this article, I discuss how to develop a versatile yet engaging business plan for inventors and their inventions. I explain its importance, main elements, how and where to find content, and its multiple uses. I also provide actual examples adapted for three common purposes: to file a provisional patent, to start an invention search, and to send to other key users. Other key users may include retailers, manufacturers, industrial engineers, investors, and licensing agents. By sharing my ideas and examples, I hope to help inventors like you to develop their own material to effectively communicate and present their invention to the different users within the invention process.

Importance

An invention business plan is an effective communication tool for providing a clear and tangible description of your invention while conveying its feasibility and value. Tell a detailed story about your invention, including what it is, how it works, and why your invention is a credible business opportunity. In general, it can be described as an organized, all-in-one repository of everything you know or have learned about your invention. It includes all angles of your invention to be used as a reference point for developing and/or submitting audience-specific requests. Having a wide audience reach allows it to be used as a collection of information that can then be modified or adjusted according to the audience it serves.

Invention Business Plan Example: The Main Elements

Many different readers and audiences need to see your idea in writing. You will be surprised at the number of different questions that will be asked about your invention. To efficiently answer such questions, the document should be designed in such a way that it serves as a detailed yet practical guide and resource for use by a wide audience. Therefore, the elements and content of your plan must be comprehensive (meaning they can answer most questions about your invention) and adaptable (meaning they can be easily modified) for a specific use or audience. The recommended elements for a comprehensive and adaptable report are the following:

• Shorts Description: A brief summary (1-3 sentences) of what your invention (name) is, what it does, and how it is useful.
• Abstract: An overview of your invention, its market, and its benefits. Include the target market, how your invention solves a problem, or how it is useful to your market.
• To fit in: How does your invention fit into an existing retailer or manufacturer’s product mix? How is it innovative compared to your products? What is the best aisle to place your product? If possible, include a photo of the hallway and the exact location on a shelf. List the main selling and consumer benefits in a bulleted format. For example, key selling advantages may include sales potential, an attention grabber on the shelf, innovative disruptive qualities, and/or fills an underserved market niche. Benefits to the consumer may include simplicity, convenience of use, automation of a manual task, saving time and steps, and/or addressing an existing unmet need.
• Detailed description: This is where you describe the main parts or components that make up your invention, how it works or what it does, its main features, and the method or intended use. An example of main parts might include a container with a lid, a motor to rotate, etc.). Examples of core features may include dishwashers, automated functionality, ease of use, etc. And, the usage method examples could be: step 1, press the red button to turn on, or pull the white knob to make it move.
• Suggested Retail Price: Base the suggested retail price on comparable market prices and other relative assumptions and factors. For example, if the invention combines the task of two or more existing products on the market, provide the cost of using those products separately, and then demonstrate how your invention is priced in a way that saves the consumer time and money. A good example is a food processor. I would provide the cost of the knives, cutting boards, and the time it takes to cut everything. While his invention, the food processor, is priced less than all of those things combined, it also has the added value of convenience and time savings.
• Estimated manufacturing cost: The ideal situation is to contact the manufacturers to get a quote on how much it would cost to build your invention. But this can be difficult if you don’t have exact specifications. The other suggested rule of thumb is to divide your suggested retail price by a factor of 4. For example, if your suggested retail price is $80, then your estimated manufacturing cost is $20.
• Problem/challenge it solves: Discuss details about the problem or challenge your invention solves. Include market trends and actual facts from reliable sources. Describe how your invention is better than existing products. What are the flaws or downfalls of existing products and how does your invention solve those problems? Using the invention of the food processor as an example, I would say that it now takes 20 minutes to chop vegetables for dinner using traditional methods (knives and cutting board). The food processor would reduce that time to 2 minutes.
• What makes it innovative: How does your invention stand out or how is it better than existing products or traditional methods? For example, the food processor saves users time, money, steps, and kitchen mess in the food preparation process. Since there’s no need to use multiple knives and cutting boards to cut vegetables for dinner, you save cleanup time and counter space. Instead, consumers get a compact, easy-to-use device with an automated motor to cut vegetables to the desired size.
• Competence: List existing comparable products or alternative methods currently sold or used on the market. Explain how your invention has a competitive advantage over these existing alternatives.
• Market position or target market: Who are the target users and/or target buyers? Who are the target retailers or manufacturers? What are the main distribution channels (online, physical stores, both)? List of examples.
• Packing suggestion: How do you want to package your product in a way that captures the attention of the target user/buyer? Will your product be included as part of a kit of other products or will it be a standalone product? Will it be packaged in a box, a bag, with or without a label? What is your suggested package design and message? For inspiration, study the package designs of other retailers or manufacturers.
• Product Extensions, Variations and Plugin Suggestions: What other colors, designs or styles can your invention have? Can there be multiple versions of your invention, such as low-end and high-end versions? Can you add something to your invention to make it even more useful? Do you want to provide a guarantee for your invention?
• Intellectual property: Provide a patent number or a provisional patent number if you have one. Write the date and how you came up with the invention. Use the United States Patent Office website to search for other related prior art. List and describe those related to the state of the art. List the history of the invention, if any. You can find story descriptions in any of the prior art examples. List your major components, provisional claims, and provide drawings or schematics of your design. Use prior art examples as a guide. You may decide to hire an industrial engineer, in which case, include those designs here.

How and where to find content

While most of the content should be in your own words, the top five suggested content resources for inspiration and ideas related to the items above include:

• A related retailer or manufacturer 10-Q (quarterly statement) or 10-K (annual statement)– for market research, problem/challenge resolution, competition and target users. Forms 10-Q and 10-K can be found on the websites of most public companies, or search for companies on the Securities and Exchange Commission (SEC.gov) website.
• Related Patents from the United States Patent and Trademark Office (USPTO.gov) – for Abstract, Detailed Description, Components, Characteristics, Methods, Intellectual Property Investigation, Patent Results, and Drawings and Design.
• Trade association websites, magazines and other trade materials – for market research, competition and target users. For example, a well-known trade association is the International Housewares Association (IHA).
• Retailer or manufacturer websites. – for packaging suggestions, product variations, key selling benefits, key consumer benefits, suggested retail price, cost of manufacture (rule of thumb: divide retail price by 4).

Utility and Audience

The invention process involves disclosing your invention to a wide variety of readers. As mentioned, such a document is a starting point or template for providing future material regarding the many different readers and audiences to whom you will need to communicate your invention.

For example, invention hunters, industrial designers or engineers, retailers, manufacturers, licensing agents, lawyers, marketing agencies, and the United States Patent Office.

With a well-documented plan, you can conveniently adapt or modify it based on your primary use or audience, saving you time and steps. However, as a general rule, be conservative about what you disclose. Only provide the information that is requested or required. I also suggest including a non-disclosure agreement (even if filing a provisional patent).

Conclution

In summary, an Invention Business Plan is used for many reasons. It is an essential part of the invention process. Help inventors turn an idea into a tangible, understandable, and justifiable business opportunity. I wish you much success with your invention efforts.