SBIR Business Plan (Writing a Winning Proposal)

The SBIR Business Plan (also known as the SBIR Commercialization Plan) plays a significant role in your SBIR applications. During a Phase I application, your business plan plays a smaller (yet still very important) role and is interwoven within your research strategy. However, for the Phase II, your SBIR Commercialization Plan is a distinct document equal in size to your research strategy.

I've personally won several SBIR awards from both the NSF and the NIH, and in this post, I'd like to share my thoughts on how to prepare and win SBIR awards with a well-crafted Commercialization Plan.

The Value of Writing your Commercialization Plan

At a small, early-stage business, you are constantly juggling what feels like a million operational tasks. You are busy building your product. You are busy talking to potential customers. You are building and writing marketing content. You are looking for new hires and managing your team.

And while you are actively doing all of these things, you also need to be thinking about the near, mid, and long-term. Strategizing.

The constant back-and-forth between "where should we be in two years" and "what needs to get done by the end of the day" can take some getting used to. Most entrepreneurs will be more accustomed to the "what needs to get done today" side of the sine wave. Why? Because you are the one moving the business forward! If you don't do it, nothing happens!

But the act of writing a business plan can be a very useful exercise. And among your many operational tasks, a big one is usually finding money! I continue to recommend SBIR funding for early-stage technical startups, and therefore the process of finding money forces you to spend a large amount of time thinking about how you will form, grow, and execute on your business goals.

Many early-stage startups will seek institutional investment from high-net-worth individuals, angel groups, or venture capital firms. Although you'll be talking with them a lot about your business, which will necessarily require you to have thought about, and formalized your business plan, you'll also often create a pitch deck that walks through most of your key business development processes - i.e. a business plan!

The SBIR Commercialization Plan is more formal, like the business plans of yore. You will create a distinct document as part of your application. But again, this process requires you to think long and hard about all aspects of your business. And while it will almost assuredly change to some degree as your business progresses, it helps you to formally consider all areas of your business. This is what I consider that to be the most important part of writing a business plan like the SBIR Commercialization Plan.

How to Write an SBIR Business Plan

Start with an outline of sections. You'll then dive deeper into each. Keep in mind, these are not rigid, required sections. However, these have won a few million dollars in SBIR awards so it can help get your started if nothing else.

  • Market Problem

  • Company Solution

  • SBIR Phase I Results

  • SBIR Phase II Objectives and Deliverables

  • Industry Overview

  • Market Size

  • Commercialization Strategy

  • Regulatory Strategy (If Applicable)

  • Broader Impact of a Successful Project

  • Company History

  • Company Mission and Vision

  • Company Core Competencies

  • Company Financial Structure

  • Company Management Team and Advisors

  • Product and Technology Overview

  • Pricing and Cost Analysis

  • Competition and Competitive Advantage

  • IP Landscape and Analysis

  • Financial Planning and Milestones

  • Revenue Model

  • Evidence of Support

  • 5-Year Pro Forma Financial Model

Covering these sections in 15 pages for the NSF or 12 pages for NIH can be daunting. But you should allot plenty of time to refine this document. As Mark Twain once said, "I didn't have time to write you a short letter, so I wrote you a long one." It is difficult to distill a lot of information into a shorter document. One useful strategy is to use charts and figures, because they can convey a lot of information and often draw attention from reviewers.

Be specific.

If you provide a market size figure, explain how it was derived. If you provide the price at which you expect to sell your product, explain why you believe that customers will pay that price. Are competing products purchased at similar prices? Have customers already agreed to buy at that price? What are your funding needs? How will that money be spent? On which key hires and do what key tasks? The more specific, the better.

Lower risk.

Think of each aspect of your business as risky in the eyes of the reviewer. Why? Because it is! Your job as grant writer (and business owner) is to lower each risk category as much as you can.

  1. Risk that the problem is worth solving. Is this really a problem? How do you know? This is one of the biggest risks, because it is tied to the risk of whether customers will actually spend money to solve this issue. Demonstrate you know the problem space better than anyone and tie it to a real need that customers will open their wallets to solve. Will customers, at the end of the day, buy this product? This is the key question to your business' success, and risk in the reviewers' eyes that you should work to lower.

  2. Risk that your solution will solve that problem. Okay, your reviewers are now convinced the problem is real. Why is your solution the solution? Lower the risk that you've demonstrated your solution can solve the problem in a way that customers like and agree with. Your technical research plan gets into the nitty gritty of how you will develop the solution, so this is not where you need to reiterate the details of your solution. Simply, you must articulate that your solution solves the customer's problem.

  3. Risk that your team can solve the problem and bring the solution to market. It's one thing to identify a problem and conceive an elegant, market-worthy solution. It's quite another to actually make it happen. This is where the team comes in. Demonstrate that your team has the talent and interest to execute on your plan. Use past history of the team members and the company. Have you commercialized new technology before? Have you commercialized grant-funded research before? Include as much as you can to demonstrate this risk is lower than the average team.

  4. Risk that your solution is not defensible. Will you be outcompeted? What other solutions exist? It's great your solution solves the problem, but how do other solutions solve the problem? Maybe they're still better than your solution. Or perhaps there is IP risk. Maybe your solution is actually better, but as soon as you bring it to market somebody copies it and already has a brand name that can sell more than you can. Demonstrate that you can build a moat of some size that your business can realistically defend for some period of time.

Working through your SBIR Business Plan

This post is the high-level thoughts on structuring your SBIR Commercialization Plan. My next posts will dive into each section and to provide templates and example documents.

10 views0 comments

Recent Posts

See All