How to Write a Business Plan for a Government Grant

When the government awards a grant to a company, it is with the expectation that the result of the organization's work on the grant will be a product that is useful and one that others will pay to have. You convince the government that this is a valid expectation in the business plan---also called a commercialization plan---that accompanies your government grant application. An effective business plan is essential in securing government grants and can sometimes count for more than technical merit in ranking proposals according to Dr. Adrian Denvir.

Things You'll Need

• RFP or Grant application instructions
• Marketplace information
• Customer characteristics
• Letters of support
• Pricing strategy
• Resumes of key contributors
• Five-year budget

Instructions

1. Read the grant instructions carefully. The requirements for writing your business plan or commercialization plan will describe the required length and expected topics covered by the plan. For example, the National Science Foundation requires no more than 15 pages in your business plan.

2. Describe the size of the potential market for your product and your pricing strategy. Describe how your organization proposes to make money from the product or process that results from your grant. Be specific. Show that you understand the marketplace.

3. Prepare a detailed description of your target customer and how your organization will make them aware of your product. Letters of support from other businesses or government organizations for your potential product are powerful indicators to the reviewers that you are thinking about the future marketing of your product.

4. Delineate sources of additional funding if your product requires further effort to be commercially viable.

5. Provide background information on the key contributors to the success of your development under the government grant and future commercialization. Include a brief description of academic achievements and professional experience. Be sure to feature any experience taking a product to market successfully.

6. Describe your product in terms of needs it solves, competition and cost to produce. Identify any existing intellectual property vested in this product and the steps you are taking to protect your company's intellectual rights.

7. Prepare a budget out at least five years showing your investment, funding sources and anticipated revenues.

Tips & Warnings

• Allow plenty of time to prepare your business plan. Even if the grant section is short, the amount of data required to have a credible plan will require research.

References

• The Institute for Innovation & Entrepreneurship at UTD: SBIR/STTR R&D Funding for Startups; Adrian Denvir
• National Science Foundation: B. Commercialization Plan
• Office of the Under Secretary of Defense for Acquisition, Technology and Logistics: The Department of Defense Small Business Innovation Research Program