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NIH SBIR Grant Application Tips: The Commercialization Plan

A commercialization plan is an essential component of an SBIR application because it outlines your go-to-market strategy and demonstrates the commercial success of your proposed innovation. However, a common problem I see all the time is that no one knows how to write a good commercialization plan! And, this is true for academic researchers and MBAs alike!


So below, I’m going to break down how you should approach your 12-page commercialization plan if you are applying for a Phase II, Direct to Phase II, or a FastTrack SBIR application to the National Institute of Health, or NIH. I’m going to tell you all of the key components required in a Commercialization Plan and the content needed in each section so that you can prepare a very strong draft with your first attempt!


Hey guys and welcome back to the blog! I’m Stacy Chin from KeepYourEquity.co where we help start-ups like yours secure non-dilutive federal grants to bring innovative ideas to the commercial market. We specialize in helping science and tech start-ups secure non-dilutive grant funding from federal programs called SBIR and STTR. If you are interested in learning more about SBIR funding as a whole, I have a video that will give you a good overview.

NIH SBIR Application Commercialization Plan Overview


If you have seen any of the videos on the KeepYourEquity.co Youtube channel, you will know that the main purpose of the SBIR program is to fund research and development projects for start-ups so that they have the potential to create innovative, commercially viable products or services that will benefit the public and stimulate economic growth. Therefore, it is so important to have a strong commercialization plan because it shows the R&D efforts outlined in your Research Strategy have real merit to be successful in the commercial market.


The commercialization plan should offer a clear and concise description of your proposed work's market potential and the planned go-to-market strategy your startup will use to generate revenue and take advantage of business opportunities. It should also highlight the anticipated competitive landscape and outline the resources you’ll need to implement your plans.


By having a well-developed commercialization plan in place, you can demonstrate to NIH reviewers that you have a sound business strategy to bring your innovation to market. This can increase your chances of securing funding and attract the resources necessary to take your start-up to the next level. If you are preparing a Phase II, Direct to Phase II, or a Fast Track SBIR application to the NIH, you are required to prepare and submit a 12-page commercialization plan.


I have linked the NIH’s guide on how to prepare a Commercialization Plan here, but let’s break down what it says…


The 7 Sections of an NIH Commercialization Plan


There are 7 main sections that you should include in your NIH Commercialization Plan. They are:

  • Value of the SBIR/STTR Project, Expected Outcomes, and Impact

  • Company

  • Market, Customer, and Competition

  • Intellectual Property Protection

  • Finance Plan

  • Production and Marketing Plan

  • Revenue Stream

These 7 sections are your main headings which you can break down into more detail with subheadings. I strongly recommend subheadings as it helps to organize your draft and organization is much appreciated by the SBIR reviewers reading your application.


So, let’s talk about how you should go about each of these sections and what content you should include in order to prepare a strong commercialization plan.


Value of the SBIR/STTR Project, Expected Outcomes, and Impact


The first section is the Value of the SBIR/STTR Project, Expected Outcomes, and Impact. In this section, you will want to outline the significance of the problem you are going to solve, summarize what you plan to do in your Phase II SBIR efforts, and explain how these efforts relate to your go-to-market goals while addressing the problem you are trying to solve.


Now I know that is a mouthful, so think of it this way– This section is essentially this is the background of your SBIR application to justify why you deserve SBIR funding for your innovation.


Your Research Strategy should have a more in-depth and detailed explanation of these components, so it is vital that the commercialization plan complements the further detail you will provide, but is more concise. You’ll want to give an overview of the details to come while primarily emphasizing the go-to-market efforts that you plan to pursue.


Company


The next section is the Company, which I like to divide into 3 subsections: Company Overview, Team Details, and Completed Milestones.


Company Overview


The first thing you want to do is to introduce your company. You should answer questions like:

  • What is your mission?

  • When was it founded?

  • What problem is your start-up trying to solve and why?

Here you can also include your corporate objectives, core competencies, present size (which you will include your annual sales level and the number and types of employees), and a short description of the origins of the company.


Team Details


Next, give an overview of the core competencies of your team. In this section, emphasize why you have the best team to go about your proposed efforts and bring your innovation to the market.


Then, you want to mention who are all of the key members of your team that will help out in these Phase II efforts and beyond. And this should be a mixture of expertise that include technical, clinical, business strategy, regulatory, finance, and legal.


For each member, mention their name, role in the company, a paragraph of their past experience, and a sentence summarizing their role in the proposed efforts. You can also mention board members, strategic advisors, or consultants. Here is a great resource on how to structure your team for Phase I vs. Phase II SBIR grant applications.


Completed Milestones


And finally, you can wrap up the Company section by describing what key technical milestones your start-up has completed to date, as well as the anticipated milestones you will need to hit to successfully bring your innovation to market.


Be sure to mention any history of previous federal and non-federal funding you’ve already secured, any Intellectual Property (IP) you have filed, or if you are selling any current products/services that have significant sales. These three things will help you identify the future milestones to give reviewers an idea of how you plan to grow a sustainable business and secure the appropriate expertise and resources to transform your technology R&D business into a successful commercial entity.


Market, Customer, & Competition


The third section of the commercialization plan is the Market, Customer, and Competition. And this is another section that you can break down into subsections by using the following subtitles: Market, Customer, Competition, Competitive Advantage, and Go-To-Market Risks.


Market


First, define your targeted market. In other words, who will benefit from your proposed innovation? This helps you to start framing what are the key pain points in this market and set the narrative of how your innovation will solve a problem.


So when identifying a market, it is important to be specific. Once you identify the market, mention how large the market is. In other words, how many people are impacted by this problem? Here it is important to use quantitative metrics and statistics to describe your market and emphasize how many people are impacted by this problem.


Finally, you will want to describe how much money is in this market. In other words, what are the total available market (TAM), the served available market (SAM), and the serviceable obtainable market (SOM)? Describing the TAM, SAM, and SOM are excellent ways to represent metrics that define the customer and revenue opportunities within a particular market.


Customer


Now when describing the customer, ultimately your goal is to provide a compelling case for why the proposed innovation is needed and how it will benefit the target customer. Here it's important to provide a concise description of the target customer for the proposed innovation. What is the pain point you are trying to solve for them and how would your innovation help your customer out?


Competition & Competitive Advantage


Next up is describing the competition and your competitive advantage. First, explain the competitive landscape by identifying the top 3-5 competitors. Ensure you touch on how they solve the problem, mention their downfalls, and then emphasize how your innovation is an improvement.


When describing your competitive advantage, state the unique value and list the features that make your innovation innovative. In my SBIR proposals, I like to dedicate a full hearty paragraph that explains why the technology is innovative. In fact, the first sentence starts off with, “This technology is innovative because (fill in the blank).” You can also state, “There is no one in the market that is solving this problem by doing A, B, C.” Afterward, mention the technology’s innovative features in a bullet point list.


Go-To-Market Risks


To wrap up this section, mention 3-5 potential go-to-market risks and your plan to mitigate them. Typical risks are usually IP risks or competitive products entering the market, customer adoption risks, and costs.


Intellectual Property Protection


The next section is Intellectual Property Protection. Here, you want to describe how you plan to protect the IP that results from your innovation. Ensure you mention whether you have filed patents or plan to file IP. You also want to mention the status of those patents, whether they are provisional, granted, or a patent cooperation treaty, which is abbreviated as PCT.


You can even take it one step further and discuss how you plan to expand your IP portfolio by filing additional patent applications and whether you plan to conduct a freedom of analysis to verify their innovation can be sold without infringing another party’s IP rights. You can also elaborate on other actions you plan to take to implement a barrier against others aiming to provide a solution similar to yours.



Finance Plan


Once you have finished explaining your IP protection, it is time to move on to the finance plan! In the start-up world, you will always likely need more money than the allocated SBIR budget limits allow to bring your innovation to the market. So in this section, you want to describe the necessary financing you will require to commercialize your innovation. To do so, you will want to describe your plans to raise the requisite financing to launch your innovation and begin generating revenue.


For example, you can mention whether you have started talking to angel investors, venture capitalists, or industry partnerships that are interested in investing in your start-up upon completion of your Phase II efforts. Here, I encourage start-ups to prepare a Gannt chart of their short-and long-term fundraising goals in relation to their SBIR efforts.


Production and Marketing Plan


The 6th section is your Production and Marketing Plan. In this section of your commercialization plan, you will be discussing how you plan to position your innovation so that you are ready to go to market.


For example, if you have a physical product, discuss how you plan to manufacture and scale-up production. Would you consider in-house manufacturing or do you need to seek a contract manufacturing partner? If you are developing a product that needs regulatory clearance, what are the necessary steps required to get that approval?


Finally, for the marketing plan, you want to describe the steps you will take to market your innovation. For instance, will you use social media, partnerships with key opinion leaders, or attend conferences to showcase your innovation to customers?


This is also a good section to explain how you plan to sell your innovation with some examples being licensing, a software as a service abbreviated to be called a SaaS model, direct sales, or business to business (B2B). And at the end of this section, I like to mention an exit strategy if you plan to get acquired by a larger player.


Revenue Stream


The 7th and final section is all about revenue. In the Revenue Stream section, you will want to hash out a plan for how you will generate revenue for your start-up. I like to break this into 2 or 3 subsections: a strategy overview section, an associated cost section, and a 3-5 year financial projection.


Revenue Generation Strategy & Associated Cost


First, you will want to give a brief overview of your revenue-generating strategy. Keep this concise, but specific. Once you do so, the next subsection is to highlight the costs associated with how you plan to sell your product.


Financial Projections


And finally, though not required, I like to include a 3-5 year financial projection as to how much revenue you anticipate generating after completing your Phase II efforts and are ready to launch. It is nice to include a table and to walk the reviewers through your assumptions in your financial model.



Commercialization Plan: NIH SBIR Application Tips Key Takeaways


The commercialization plan is an element of the NIH SBIR grant application that MBAs and academics alike struggle with. Though the NIH gives an overview of what sections to include in the commercialization plan, ensuring that you include the content we have gone over here in each section is the key to success.


Use our Youtube video or this article as a guide as you write your NIH SBIR application commercialization plan! And, don’t forget to check out our website, KeepYourEquity.co, for more tips, resources, and guidance!

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