Business Planning

Posted on March 13 2013 | Author: Tom Dowler

Business planning…this can be an all-consuming undertaking for any company. It can take up significant time and resources, both of which are scarce commodities for small companies. Your company already expends maximum effort to managing critical functions for its business activities, such as sales & marketing, manufacturing, and business development.

However, a functioning business plan is critical for charting the direction of a company, activities the aforementioned “scarce commodities” will be directed towards and of course, raising money from public and private sources.

Here are some tips and guides to getting started.

• Determine who the business plan will be written for. Is the intended use for internal strategic direction or will it explain to potential investors or funders the direction of the company and why it is worthy of investment?
• Understand how each section will be approached. There are plenty of templates out there, the general sections included in each focusing on (i) how your business came to be and the commercial purpose it will serve, (ii) the products or services you will be selling, as well as further development required to bring product to market, (iii) the technology platform that makes your company unique (iv) the state and trends of the markets your product may be directed towards, (v) the model by which you will moving your product to customers, and of course, (vi) corporate and financial sections. A strong knowledge of each of these focuses helps shape and articulate your value proposition, important in moving your business in the right direction and finding that “low-hanging fruit” you keep hearing about.
• Supplement your knowledge in sections of weakness. When contemplating your approach, it will be apparent which sections are areas of strength and which are areas of weakness for your company. Areas of weakness should be more difficult to frame, so determine how your knowledge may be supplemented through research, advice from partners or other sources of assistance you identify.
• Dig in and get writing! There will likely be numerous drafts and iterations over the course of business plan development but getting started is often the toughest part.

Be aware that writing a business plan requires a great deal of time but will uncover new opportunities and strategies not yet considered and in the long-term, will be one of the more valuable activities you undertake as a business.

Tom Dowler
Senior Business Analyst

Image credit: David Castillo Dominici / FreeDigitalPhotos.net

Share this: Tweet

Filed under: Entrepreneur

Biomimicry, an interesting tool to add to the innovation tool kit!

Posted on May 09 2012 | Author: Tom Dowler

Given the dearth of bio-based companies we work with, and the goal of many to utilize more sustainable feedstocks, create more efficient methods for farming, processing, and manufacturing, and develop products often from organic sources, it brings up the question, what about biomimicry?

Biomimicry is defined as emulating nature to solve human problems sustainably.

After all, encountering 3.8 billion years of “product development” (life) and countless improvements to the compositions and processes within each “product”, Mother Nature may have figured out a few answers that even our best and brightest cannot efficiently determine without a guide.

How do we reduce our energy consumption? How do we reduce our material usage?...in short, can emulating nature help to reduce costs and make products and processes more efficient?

Some great examples of Biomimicry in use are:

• Toronto-based WhalePower, who has developed their Tubercle Technology utilizing the fluid dynamic and biomechanic design of a humpback whales flipper to produce a quieter and more efficient wind turbine.
• Columbia Forest Products, who has taken into account the natural adhesive abilities of the blue mussel to create a soy-based formaldehyde free technology used for construction of hardwood plywood products.

For more information on Biomimicry, there is a growing list of expertise in this area including:

• The Biomimicry Guild and Biomimicry Institute
• The Biomimicry Collaboration, led by Jamie Miller at the University of Guelph

Biomimicry, an interesting tool to add to the innovation tool kit!

Tom Dowler
Senior Business Analyst

Share this: Tweet

Filed under: Innovation

Crossing the Death Valley

Posted on April 25 2012 | Author: Tom Dowler

R&D...&C

A previous blog by John Pickard gave a great summary of options, or lack thereof at times, for public funding into the Commercialization phase of development. That is the phase at the end of R&D, “Phase C”, which is traditionally known as the death valley many companies must cross prior to bringing their products to market.

At this time it may not be easy to find public funding programs to share some cost with you and your partners in the de-risking of your business. However, there are some steps during R&D before Commercialization (“C”) that are absolutely critical to give your company a good shot at achieving funding for pilot, demonstration, or market test phases. These are generally the phases which prove to investors, funders or customers that your product does in fact work in a commercial setting, and that it can generate revenues. The steps that you can take now should be directed towards being able to demonstrate the following:

1. Is the product unique or does it work equal to, or better than, current competitive products?

This seems like an obvious question but it is one that often is not contemplated soon enough. What targets in terms of efficacy, properties, or specifications are paramount in the industry you are entering with your product? These targets need to be achieved for the product to succeed. There are times when it is easy to get caught up in the excitement of a new technology and lose sight of the specifications that are essential to entering the market.

2. Price/Cost - Can the product be sold at a final price point that is competitive with existing products and/or the perceived advantage generated by your product?

If you are not able to demonstrate the ability to eventually produce at a reasonable cost and earn a margin, it will be challenging to reach the end of the “death valley” stage to the point where you can attract investors. If you can’t sell the product, you can’t generate an ROI for potential investors, and we all know where that leaves you - another great idea orphaned.

Contract pilot plants across Canada with expertise working with agricultural feedstocks can help you identify production issues, scale up risks, and help predict future costs. Some of these centres include:

• Foodtech Canada (member locations across Canada including POS, FDC, BioFoodTech and GFTC)
• Composites Innovation Centre (Winnipeg)
• Agriculture and Agrifood Canada sites including Laval, Qc, and Leduc, Alberta
• Local universities and colleges

3. Will you be able to protect the market you achieve once you have commercialized?

This includes protection of intellectual property, control of an important feedstock required to produce your product, or the strength of your brand. From the idea phase, all the way through to the commercialization phase, it is important that you understand how you will protect the market advantage you have created with your product. Appropriate timing for protection is also an important concept to understand over the course of your company’s R&D&C cycle. Demonstrating the ability to maintain the market advantage you have carved out will quell the concerns of public funders, and eventually investors, who are considering backing a small entity with limited resources. Sometimes, partnering with a large industry player you may currently view as a threat, may be the best way to protect your market, brand and IP.

Ag-oriented public funding programs are becoming increasingly competitive, as the number of programs has recently been shrinking, despite the growing number of innovative new companies entering this space. It will be important that you have considered and can explain the numerous risks involved in “Phase C” to funders, and how your R&D plan has mitigated these risks from day one.

Here at Bioenterprise, we can help you with identifying and addressing many of these areas. Why not give us a call?

Tom Dowler
Senior Business Analyst

 

Share this: Tweet

Filed under: Entrepreneur

Pondering Intellectual Property

Posted on November 24 2011 | Author: Tom Dowler

Intellectual property (IP) often forms a strong foundation for technology companies. And that it should, given the millions of dollars of R&D that build the foundation behind technology and product development for bio-economy based companies. However, along with the value that patent filings and trade secrets may bring to your company, you must also be aware of the inherent risks and expenses brought about by your IP protection strategy.

Patenting is by far the strongest method of protecting your technology from being legally duplicated on the market in the countries you file. In short, a patent is an exchange between an inventor or their legal representation and the public. The owner of the patent exchanges the knowledge of the valuable intellectual property they have conceived and reduced to practice in exchange for the right to solely manufacture and sell it in that country for the term of the patent.

The competitive advantage that your patent provides may be the most valuable edge you have in the market over your competitors.  However, with this strong statutory protection for your IP comes unavoidable cost.

When asked in the past, I’ve estimated the MINIMUM cost of having a patent issued in the US alone at $20-30K. However, depending on the complexity of the technology and pre-existing knowledge in the area, you may be looking at much higher costs when all is said and done. Based on a quick scan of the opinions of others with experience in IP protection, the cost of filing to issuance of a patent could be anything from $10K-100K. That is quite the range to prepare for.

So, the take home is that patent filing may be integral to your business strategy, but it is not cheap, and these costs need to be accounted for when forecasting costs your business will face.

A patent may be a strong mechanism of protection, but a trade secret may get you to where you want to go without giving up knowledge of your intellectual property to your competitors. Foregoing the need to file a patent also allows you to direct your business dollars to other activities. However, this means your “special sauce” must be kept a secret through non-disclosure agreements and management of information, which comes at a cost as well. The question that needs to be asked when considering whether IP should be kept a trade secret is “Can my idea or product be reverse engineered?”… that is, will the competition be able to understand the intellectual property from the product you sell and use it for their commercial benefit?

When deciding on your IP protection strategy, you also need to take into account other factors such as barriers to market entry, whether the benefits to your company are worth the costs of patenting, and regions the IP may be useful for either manufacture or sale of product.

To determine the best IP strategy for your company, it is certainly worth working out the pros and cons of each with a trained professional. Having an introductory conversation with a patent agent with a strong knowledge in the technology and market your products will enter into is a very good investment.

Tom Dowler
Senior Business Analyst, Bioenterprise

Share this: Tweet

Filed under: Entrepreneur