Business Plans

Stairway leading to Purdue Foundry offices.

Purdue Foundry is an entrepreneurship and commercialization hub in Discovery Park’s Burton D. Morgan Center for Entrepreneurship whose professionals assist entrepreneurs with business plans, product ideation, market analysis, funding, grant writing and legal counsel. A startup becomes a Foundry Certified Startup once it has completed an assistance program called the LaunchBox. After completing this program, an entrepreneur can begin licensing their technology through the Purdue Office of Technology Commercialization (OTC). 

Business Plan

A business plan is a written description of a business’ future, explaining what the business will do and how it will do it. Business plans are inherently strategic and should detail a business’ current resources and abilities. This is followed by a clear description of the business at a point in the future — usually three to five years out — at which time it will have different resources and abilities, greater profitability and increased assets. The plan shows how the business will get from here to there.

Purdue Research Foundation (PRF) requires all potential licensees to submit their plans for the technology when desiring to enter license negotiations. When the potential licensee is a startup, a business plan is requested, and for a previously existing company, a commercialization plan is requested. These plans are critical to the licensing process because they provide the starting points for the business and financial terms in the license agreements. 

Executive Summary

An executive summary should clearly tell the reader about the business, the problem it is solving, the magnitude of the market and how it intends to generate sales. The executive summary also clearly states what the business needs from the reader, and in general, should be short, typically around two pages.

Business Description

The business description focuses on the current and future state of the industry, especially the opportunities for the business. All addressable markets should be described.

Market Strategies

Market strategies are derived from a meticulous market analysis. A market analysis forces a business to become familiar with all aspects of the market so the target market can be defined, a clear profile of the customer is depicted and the company can be positioned to enter the industry and capture a significant share of the business in that commercial space.

Competitive Analysis

The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within a market. Strategies that provide a company with a distinct advantage, barriers that can be developed to prevent competition from entering the market and any weaknesses that can be exploited within the product development cycle should be considered during competitive analysis.

Design and Development Plan

The design and development plan provides the reader with a description of the product’s design and charts its development within the context of production, marketing and sales. All regulatory steps and strategies to achieve key milestones should be clearly defined.

Operations and Management Plan

The operations and management plan describes how the business will function on a continuing basis. The plan highlights the logistics of the organization such as the various responsibilities of the management team. Each team member’s résumé should be included in the appendix. 

Financial Plan

The financial plan is the last section of the business plan. It demonstrates projected company growth, financial management and resource allocation, which is critical to a successful plan. This section brings together the information in the prior sections to illustrate how the business will expend capital, generate revenue and realize profits over the timeframe of the business plan.

The Business Model

In recent years, many leaders in the startup community have switched their focus from a business plan to a business model. The latter de-emphasizes detailed pro forma financials and lengthy market assessments. Instead, it concentrates on the key issues of customer discovery (Who will buy?), customer validation (Is the product what they want?) and generating revenue. Either a business plan or a business model can be submitted to OTC to demonstrate the company’s resources and ability to fulfill its commitments under a proposed license agreement. 

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