6ET005 Engineering Innovation and Enterprise

Guidance Notes

Group Business Plan

50% of the overall assessment

The report should be presented in the form of a Business Plan for your chosen
product, setting out what is needed and what will be achieved over a 3 year time
frame.

Submit the Business Plan as a Group Report. This should be presented as a single
document, but each team member should print out a cover sheet for the assignment
at the Student Office, and attach all the cover sheets to the Business Plan.

Word count for the report (excluding appendices): approx. 10000 total.

Recommended layout and structure follows overleaf:

6ET005 Engineering Innovation & Enterprise

Business Plan submitted by enter team name here

(including Team A etc. ref. as well)

Team members and responsibility

Name 1 Marketing
Name 2 Engineering
Name 3 Intellectual Property
Name 4 Finance
(Name 5 Manufacturing)
Executive summary (1 page maximum)

This Business Plan presents a proposal for investment of .. for the development
and introduction to market of a .

Provide a brief summary of the content of each of the main sections of the report, so that
there is a coherent introduction to the business plan.

It would be a very good idea to include a picture or image that represents your product.

Contents

The main sections of the report are expected to be:

Marketing
Engineering
Intellectual Property
Finance
Manufacturing (where covered separately)

If there are any appendices, list those here

The specific format of the Business Plan, and the content of each section, is open.

You should include content that supports your particular business case, and avoid
including any content that simply describes how something is done (ie there should
not be any explanation of the process for obtaining a patent, or the principles of how
to conduct market research, or the meaning of discounted cash flow etc.). In a
Business Plan, it should be taken that the reader already understands these things,
and is more interested in your application of the techniques and your justification for
the commercial potential of your proposal.

Marketing, (this must include all the relevant aspects of marketing, the need for the product,
identifying the size of the potential market, estimating how many units that the company can
expect to sell on a weekly/monthly/yearly basis, considering the best ways to raise
awareness and knowledge of the of the product amongst customers, describing your choice
of route to market and your marketing plan). As an appendix, you might include a proposed
advert or promotional leaflet for the product, or competitor product analysis.

Consider all the aspects described in roles and responsibilities, ie

1. Why is the product needed?

2. What functional, aesthetic & environmental qualities does your product need
to have?
3. Who are your customers?
4. How large is the market?
5. What selling price do you expect the market to accept?
6. How many units do you plan to sell on a weekly/monthly/yearly basis
estimate sales volumes for each phase of business development.
7. How is the market going to be made aware of the product?
8. What distribution channels will be most appropriate?
9. What are the costs for design and production of product packaging?
 10. Work with financial director to develop the sales income part of the financial
model, including estimation of budget needed to cover marketing costs.

Engineering, (identify the critical factors for the product design specification, initial design
concept sketches, final design annotated to identify the relevant design features, suitable
component materials selected, appropriate manufacturing methods identified, 3D graphical
representation of the final design.) As an appendix, you might include the product
specification, or estimated costings for components.

Consider all the aspects described in roles and responsibilities, ie

1. Development of design concept.

2. Product specification.
3. Proposed solution to meet functional, aesthetic, environmental, cost and
production volume requirements.
4. Sketches / CAD models / prototypes as appropriate.
5. Produce drawings suitable for use in a patent application or design
registration.
6. What materials are appropriate for the component parts?
7. What budget is needed to cover product development costs?
8. Work with manufacturing director to resolve manufacturing related issues,
including choice of in-house manufacture or bought-out sourcing strategies.
9. Obtain quotations, or develop estimates for bought-out parts.
10. Work with financial director to develop product costing part of the financial
model.

Intellectual Property, (competitor product search, patent search and review of prior art,
draft patent application and patent strategy. Generation of brand identity, trademark search
and draft application, consideration of relevance of other IP right protection design rights,
copyright, confidentiality agreements) As an appendix, you might include a copy of a
proposed patent application.

Consider all the aspects described in roles and responsibilities, ie

1. Search for and critically review competitor products

2. Search for prior art patents
3. What are the inventive and protectable features in the new product?
4. What other opportunities are there for protection of intellectual property
rights? (eg brand, trademark, design registration)
5. Produce a registerable trademark
6. Prepare a draft patent specification including drawings prepared by
engineering director.
7. Review potential for product licensing.
8. Consider strategy for exclusivity of selling or distribution rights.
9. What strategies for protection of international intellectual property rights are
most appropriate for this new product?
10. What budget, over what timescale, is needed for protection of intellectual
property rights?
Finance, (project costing estimated costs for bought-in parts, estimated variable costs that
relate directly to quantity produced, estimated development and engineering costs,
estimated selling and marketing costs, estimated management cost and overhead. Develop
spreadsheet for project monthly cashflow and calculate project financials capital
investment required, maximum funding requirement, payback term, NPV, IRR and sensitivity
analysis etc.). As an appendix, you might include alternative variations of the financial
model for different assumptions, ie a sensitivity analysis.

Consider all the aspects described in roles and responsibilities, ie

1. Build a project cost model taking into account the considerations listed below.
2. Consider indirect costs, ie management, engineering, sales and
administration staff and budgeted spend.
3. Work with manufacturing director to develop the manufacturing cost part of
the model.
4. Work with engineering director to develop the product costing part of the
model.
5. Work with marketing director to develop the sales income part of the model.
6. Consider sales revenues received and timing of payments.
7. Use project cost model to compare alternative assumptions and sensitivities
to product price, sales volume.
8. Present results for project cashflow, funding needed, payback term etc..
9. Consider alternative ways to fund the project, ie borrowings, shareholder
investment.
10. What financial proposal can be justified to Dragons Den type investors?

Manufacturing (if included as a separate section) , (description of manufacturing

strategy, ie what operations carried out in-house or bought-in. For in-house operations,
describe the space and resources needed during each phase of the business development,
justify the manufacturing costing). As an appendix, you might include floor plan layouts,
copies of quotations from suppliers.

Consider all the aspects described in roles and responsibilities, ie

1. What manufacturing methods are to be used for the component parts,

appropriate to the target volumes during each phase of business
development?
2. Work with engineering director to resolve product related issues, including
choice of in-house manufacture or bought-out sourcing strategies.
3. What production equipment, space and resources will be required for in-
house operations?
4. How much will the production equipment and assembly / packing / office
space required for the business cost?
5. How many people are going to be employed during each phase of growth?
6. What budget is needed to cover tooling investment costs?
7. Consider factory space costs and apportioned overheads.
8. Consider direct costs, ie production/assembly staff and materials.
9. What is the factory gate cost of the product?
10. Work with financial director to develop the manufacturing cost part of the
financial model.