The one thing that all innovative products and services have in common is a positive impact on society. Your business plan should demonstrate this positive effect from the start. If you are not likely to have a positive impact on a specific group of people, to give them something meaningful that they did not have before or save them time or money, then why will they buy your product or service?
Ideally you need some kind of evidence from those whom you claim will benefit from your proposition. And don’t forget to take into consideration the environmental impact of your innovation either – both when it is in use and obsolete.
Market attractiveness
What is the size and dynamic of your potential market? Are you targeting a segment of the market that will be receptive to the innovative product/service that you are offering? If the approach in your business plan is to take a small percentage of a big market but you don’t have much of a track record, you will have limited credibility. Your idea may be different, but customers will not switch from the current providers.
In contrast, a creative idea in a small but growing market is much more likely to succeed. In a growing market there is more space for new entrants and innovative ideas. Additionally, if the market is growing and changing, current service providers are less likely to be able to satisfy market and client requirements. In other words, it will be easier to grab market share if you go from the bottom up rather than the other way around.
How does the idea in your business plan or your product compare with the competition? For example, what is different – even subtly different – about your offering? In order to be competitive, you should offer something dramatically different to what is currently available or at least enable customers to do something that they cannot currently do.
Barriers to Acceptance
Barriers to acceptance are often neglected in business plans. People always try to be positive in business plans, sometimes overly so. If you are trying to do something radically different it is almost inevitable that there will be significant barriers to overcome. However strong the proposition, issues such as lack of credibility or lack of marketing spend will count against you. You need to include compelling evidence that you can get there with the resources available and/or put forward a solution to get over potential obstacles.
Feasibility of concept
When including innovative and creative ideas in your business plan, there are some key issues to consider. If you are developing a product, have you gone through the lifecycle of the development to ensure that it can actually be produced? Have you identified and ironed any potential technical barriers? Is demand for the product such that these barriers can be overcome? Can you make the product at a cost that will be profitable?
If possible include prototypes of the innovation with detailed costs – including those for scale-up. If you are unable to do this, find out whether other people have done something comparable and refer to them as examples.
Experience and strategy
Creativity and innovation within a business will also be driven by the talent of the individuals involved. There are a number of factors that come into play here. For example, a VC backer will ask whether an individual member of the team has done something like this before. If the idea is new and exciting, is the team experienced in launching something novel and are they experienced in how to communicate a novel proposition to the marketplace? If it is not possible to put a team that has experience of driving innovation, it’s worth considering partnering with someone credible in that space.
Next, ask yourself whether your product idea or service requires the creation of a new venture in order to get to market. Sometimes it can be more appropriate to come up with a partner strategy or to look for outside help where there are skills gaps. It is crucial that any potential limitations of the team to deliver are highlighted in the business plan.
Finally, if you are launching a radical or disruptive venture or product within the framework of a current company, be prepared. Because significant disruption will first be required within your own business before you can deliver the innovation you promised to the market.
