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References - Business Development Tools

Many companies have opportunities to introduce new products or process by the use of innovation. Within the UK there is a standard way to analyse innovations – this is used by funding agencies when assessing programmes for funding. It can also be used to compare different opportunities or to prepare information for external funding. The following sections cover different aspects of an innovation.

Description of the business project

A project should be broken down into the following areas:

Business Proposition

  • Challenge/Opportunity
  • Market Size
  • Exploitation/Dissemination
  • Benefits

Project Details

  • Technical Approach
  • Innovation
  • Risks
  • Skills


  • Required Finances
  • Added Value

The business proposition

Define the business proposition for the innovation. The first part explains the challenge being addressed, the second part covers the value of the market and the final section describes the project benefits.

What is the business challenge/opportunity that this project addresses?

From a user perspective describe the nature of the problems or issues that need to be solved by yourself and/or your potential customers. Detail how the intended outputs of the project will address these problems and issues.

With the outline of the challenge/opportunity being addressed what does the project team need to do to successfully overcome it within the desired timeframe and cost.

What is the size of the market opportunity that this project might open up?

Describe the size of the market opportunities that this project might open up, include details of:

  • current nature of the specific market(s) at which the project is targeted (e.g. is it characterised by price competition amongst commoditised suppliers? Is it dominated by a single leading firm?)
  • the dynamics of the market including quantifying its current size, actual and predicted growth rates
  • the projected market share for the project outcome, with justification in the light of potential competitors
  • the potential to create value-add for the local country and/or the European Economic Area (EEA).

Describe and clearly quantify the return on investment that the project could achieve and provide relevant source data references. 

Where possible, provide evidence for your statements about the addressable market for project outcomes and outline your strategy for developing market share. 

For highly innovative projects, where the market may be unexplored, explain:

  • what is the route to market that could be used?
  • what is the potential market size?
  • how the project will seek to explore the market potential?

How will the results of the project be exploited and disseminated?

List or describe the potential exploitable outputs of the project such as:

  • products or services
  • process changes
  • new applications

Then describe how these outputs will be exploited. This might be via product sales to end users, sales through distributors or by licence deals. Include details of the route to market; protection of intellectual property rights; reconfiguration of the value system; changes to business models and business processes and other methods of exploitation and protection.

It is essential to attract customers to achieve sales, so you should outline the marketing/dissemination strategy. Will presentations at technical conferences, marketing literature, web marketing, reference customers or case studies be used to contact potential customers.

What economic, social and environmental benefits is the project expected to deliver?

Obviously the main output from the project should be increased turnover/profitability but there is also interest in social and environmental benefits. Truly sustainable development balances economic growth with social impacts and benefits and the protection of the environment.

Economic benefits – This is the real impact the organisation has on its economic environment. This is not simply traditional corporate accounting profit, and can include cost avoidance, so you should highlight any expected ‘spill over’ benefits external to the project, e.g., benefits to users (intermediaries and end users), suppliers, the broader industrial markets and the economy. 

Social benefits - Quantify any expected social impacts, either positive or negative, on, for example, the quality of life, social inclusion/exclusion, education, public empowerment, health and safety, regulation, diversity, and any expected impact on Government priorities. 

Environmental benefits – Demonstrate how your project will benefit the natural environment as much as possible or at the least do no harm and curtail environmental impact. For example, this could include careful management of energy consumption and reductions in carbon emissions whilst reducing manufacturing and materials waste, rendering waste less toxic before disposing of it in a safe and legal manner (cradle to grave) or re-manufacturing (cradle to cradle).

The project details

What technical approach will be adopted and how will the project be managed?

Provide an overview of the project. Describe the main areas of work, together with their resource and management requirements. This is usually a breakdown of the project into work packages with milestones and a GANTT chart.

There should be a description of the technical approach and methodologies being used. What are the know development areas and what are the unknown areas. Describe rival technologies and alternative R&D strategies and describe why your proposed approach will offer a better outcome.

There should be a clear description of the project management and project reporting lines identified. How will the project be managed, how will progress be communicated, who is in charge when things go wrong.

What is innovative about this project?

Identify the extent to which the project is innovative: both commercially and technically.

Technical innovations push boundaries over and beyond current leading-edge world science and technology. Highlight and explain the timeliness and novelty of the research aspects of the project in an industrial and/or academic context.

Commercial innovations apply existing technologies in new areas or allow new commercial models to be implemented.

Describe any evidence you have to substantiate your belief that the intended work is innovative. This could include the results of patent searches, competitor analyses, literature surveys etc. If applicable, you should also outline your own background intellectual property rights, as related to the project.

What are the risks (technical, commercial and environmental) to project success? 

Projects of this type are inherently risky so it is necessary to have adequate arrangements for managing this risk. Focus, therefore, on the arrangements for managing and mitigating risk as follows:

  • identify the key risks and uncertainties of the project and provide a detailed risk analysis for the project content and approach, including the technical, commercial, managerial and environmental risks as well as other uncertainties (eg, ethical issues) associated with the project. The main risks should then be rated as High/Medium/Low (H/M/L)
  • state how the project would mitigate these key risks. You should address all significant and relevant risks and their mitigation
  • identify key project management tools and mechanisms that will be implemented to provide confidence that sufficient control will be in place to minimise operational risk and, therefore, promote successful project delivery.  This should include the arrangements for managing the project team and its partners.

Does the project team have the right skills and experience?

Describe the track record of the project team members in undertaking and exploiting the results of research and development projects, to show your capability to develop and exploit the technology. 

Key points:

  • the project team should have the right available mix of skills and experience to deliver the project successfully
  • the project team’s formation objectives should be clear expressed
  • if there is a consortium is the consortium greater than the sum of its parts – how will the organisations working together and achieve more than if they were working individually

Funding and added value

Generally, a project will need additional finance to undertake the developments. This make come from internal funds, bank loan, informal finance or a funding round.

What is the financial commitment required for the project?

Indicate the anticipated project cost making clear the level of contribution from any project participants and the level of funding required from external sources. 

Ensure that:

  • The budget realistic for the scale and complexity of the project?
  • Is a financial commitment from other sources demonstrated for the balance of the project costs?
  • Has a realistic budget breakdown been provided?
  • Have any work package breakdowns been described and justified adequately?

Looking for too little finance is as bad as overestimating the required finance.

How does financial support from funders add value?

You will need to provide evidence that:

  • successful delivery of your project will increase the total amount of money the project team spends on Research & Development
  • funding is required for the project to be able to proceed
  • funding will allow you to undertake the project differently (more quickly, on a larger scale etc)