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It is a highly effective planning tool because it often reveals unknown information to you. It helps to identify strategic flaws in why you think your invention will be successful.
As an example, I prepared a business plan for one of my inventions. I estimated sales based upon my market research and methods of distribution.
My estimates were conservative and growth was related to the expansion of distribution. I projected my sales over a three year period and then calculated the manufacturing costs and expenses over that time.
When I projected these costs and expenses, it indicated that I was going to have a problem with the manufacturing capacity in the third year.
Since my invention required a certain amount of assembled labor, it meant that I would need a manufacturing facility for thousands of assemblers.
This was going to be a problem since a facility capable of organizing thousands of assemblers is not only expensive, and difficult to find, but it would also substantially reduce my profits.
This meant that I had to rethink how to maintain profitability by dealing with this manufacturing dilemma.
I could have outsourced manufacturing overseas but that would mean everything would start elsewhere. I would need a high volume of sales in order to secure desirable pricing, delivery and shipping, which I didn't have since I was a new start-up.
It also meant that I would need to send someone overseas to supervise the making of my invention. So I needed to find a way to have my invention assembled locally without increasing assembly costs.
Why An Invention Plan Is Useful
After working on this for a while, I eventually organized a simple way of having local assemblers put my product together from working part time in their homes.This avoided the facility expansion problems in the third year. It also saved a lot of expenses and greatly added to the profits and maintained the integrity of existing manufacturing without having to move it overseas.
In fact, the strategy was less expensive and more productive than outsourcing abroad.
This outsourcing strategy was one of the key reasons I received investment funding for this invention and is an example of the importance of preparing an invention business plan.
It can reveal potential flaws in profitability. It also shows that you are thinking, which creates confidence with anyone who has to deal with you.
Just as we familiarize ourselves with the area of our inventions, it is equally important to be familiar with how competing inventions are financed, manufactured and marketed for a profit.
Just as we use an inventor's log for getting our invention ideas down on paper, an invention business plan helps us to get our "how are people going to buy or invest in my invention" ideas in writing.
There is real value in the process of writing an invention business plan just like there is real value in sketches, drawings and experiments for inventing.
Invention Business Plan Software
There are business planning software programs that you can use that will greatly assist you in preparing a well-developed, professional invention business plan. Some are free with upgrades or come with free trials that you can download.
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