Managing Innovation, 6th Edition

CHAPTER 9 Making the Innovation Case

The usual motive for developing a formal business plan is to secure support or funding for a project or venture. However, in practice, business planning serves a much more important function and can help to translate abstract or ambiguous goals into more explicit operational needs and support subsequent decision-making and identify trade-offs. A business plan can help to make the risks and opportunities more explicit, expose any unfounded optimism and self-delusion, and avoid subsequent arguments concerning responsibilities and rewards.

9.1 Developing the Business Plan

No standard business plan exists, but in many cases, venture capitalists will provide a pro forma for their business plan. Typically, a business plan should be relatively concise, say no more than 10–20 pages, begin with an executive summary, and include sections on the product, markets, technology, development, production, marketing, human resources, financial estimates with contingency plans, and the timetable and funding requirements. A typical formal business plan will include the following sections [1]:

1. Details of the product or service
2. Assessment of the market opportunity
3. Identification of target customers
4. Barriers to entry and competitor analysis
5. Experience, expertise, and commitment of the management team
6. Strategy for pricing, distribution, and sales
7. Identification ...