Section 4: THE BUSINESS MODEL
This section describes in detail exactly how you expect to make money selling your particular product. Discuss pricing of the product, the customers/partners, and how much capital the company will need to operate. Break down costs associated with making and selling the product. Taken all together, the information that you provide in this section should allow you to estimate revenues and expenses for the first year or two, which can be detailed in the Financial Section (discussed below). When calculating how much startup capital you need, estimate your expenses for the first year or two and then add a safety margin (50-100%).
- How much will the product be priced and why?
- How and when will the customers or partners pay for the product (up-front, milestones, royalties)?
- How much will development cost?
- What will the company need to operate (cash, etc)? • How will the company attract customers/partners?
- How will manufacturing be handled?