An invention business plan is similar to planning a trip. It details where you want to go, why you want to go there, and how you are going to get there. It contains all the details of your trip as well as contingency plans in the event you have to make detours.
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.