Commercialization Plans

The SBA defines “commercialization” as the process of developing, producing and delivering products, processes, technologies or services for sale or use by the federal government or commercial markets.

Phase I

While a commercialization plan is not a requirement for Phase I applications, we advise that you begin to consider how you will develop your commercialization strategy for Phase II.

While Phase I is about testing a hypothesis or objective, your application will be strengthened by demonstrating how you are planning for the commercialization of your proposed innovation.

For your project narrative, consider the following questions:

• How has the market opportunity been validated? Describe your customers and your basic go-to-market strategy to achieve the market opportunity.
• Describe the competition. How do you expect the competitive landscape may change by the time your product/service enters the market? What are the key risks in bringing your innovation to market?
• Describe your commercialization approach. Discuss the potential economic benefits associated with your innovation, and provide estimates of the revenue potential, detailing your underlying assumptions. Describe the resources you expect will be needed to implement your commercialization approach.

Phase II

Commercialization plans in Phase II applications should cover the following areas:

Project Introduction and Expected Outcomes

In plain language, describe the proposed project and its key technology objectives. Clarify the need addressed, specifying weaknesses in the current approaches to meet this need. Describe the commercial applications of the research and the innovation inherent in the application.

Company Information

Briefly describe your company. Include:

• corporate objectives
• core competencies
• size (annual sales level and number and types of employees for the last 5 years, if company has existed for more than 5 years)*
• any current products/services that have significant sales

Indicate your vision for the future and how you will grow/maintain a sustainable business entity. Include a short description of the origins of the company.

*For grantees existing for less than five years, provide this information for the years you have been operational.

The Market, Customer and Competition

Describe the market and/or market segments (for the product, technology or service) you are targeting and provide information on the size of the market and a brief profile of the potential customer. Also:

• Tell what significant advantages your innovation will bring to the market (e.g., better performance, lower cost, faster, more efficient or effective, new capability).
• Explain the hurdles you will need to overcome in order to gain market/customer acceptance of your innovation.
• Briefly explain the plans you have for approaching your potential customers (i.e., your marketing and sales strategy).
• Describe the current competition and any potential competitors over the next several years.
• Include a schedule showing the projected needs (e.g., amount of additional investment, timeframe, etc.) from the end of Phase II until commercialization. You should also indicate any other potential commercial factors.

Intellectual Property

Describe how you will protect the intellectual property that results from your innovation. Note any actions you may consider to attain at least a temporary competitive advantage. Also consider your company’s prior record in this area. Comment on your company’s strategy to build a sustainable business through protection of intellectual property.

Revenue Stream

Describe your plans for generating a revenue stream and include the assumptions that form the basis for revenue projections. Will the revenue stream as described be profitable to the company or at least sustain the product through its life cycle?

Financing

How will you raise the necessary financing for Phase III commercialization? Show you have a plan for this funding in one or more of the following ways:

• A letter of commitment for follow-on funding
• A letter of intent or evidence of negotiations to provide funding, should the Phase II project be successful and the market need still exists
• A letter of support for the project and/or some in-kind commitment
• A specific plan to secure Phase III funding (progress of this plan must be commented on in the Phase II progress report)