From lab to market – part 2: writing a business plan

A business plan without a robust market analysis is not a business plan, it is a wish list! Investors will want to understand the size of the opportunity, who else is operating in the space and why your solution has a defensible advantage.

When we talk about market, it really depends on which market you are referring to. There are two markets you will be focusing on, because these are the ones that the investors will be waiting to see. 

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The Total Addressable Market (TAM) is the potential market that accounts for every single customer in that sector. It measures the total demand, disregarding competition, capacity or geographic constraints. For example, the global TAM for antimicrobial resistance had a value of £6bn in 2025, and is expected to grow at an annual rate of 5.5 per cent. 

The Serviceable Available Market (SAM) is realistically what portion of the market your company can aim for, based on its geography, product, competition and connections. For example, the UK SAM for antimicrobial resistance diagnostic kits with specialisation on mycobacteria had a value of £34m in 2025. Investors would be more interested to see what you can potentially get in the short and long term, and they will be impressed that you have done your background research and you are aware of your surroundings. 

Map the competition. Knowing your enemy is the first technique they teach you in the art of war. Identify direct competitors (doing what you do), indirect competitors (solving the same problem differently) and potential future competitors. In some cases, you can find potential collaborations from a thorough analysis. For each, assess their strengths, weaknesses, pricing and market position.

Then clearly articulate your competitive advantage. What is the difference? Is your technology faster? More accurate? Significantly cheaper at scale? Do they have a weakness that you already have a solution for? These are the questions that turn a scientific breakthrough into a compelling commercial proposition.

A business plan for a scientific spin-out does not need to be a 100-page document. It needs to be clear, concise, evidence-based and honest about risk. Apart from the market and competitor analysis that we mentioned above, the key components to every business plan can be found below.

The core components

Executive summary: A clear description of the problem you are solving and why it matters.

The technology: Your Technology Readiness Level (as outlined in part one), the evidence base and the innovation’s mechanism of action.

The market opportunity: Total Addressable Market, Serviceable Available Market, customer segments and validated pain points from your customer discovery.

Intellectual property and protection: IP ownership, licensing arrangements and any freedom to operate analysis.

Competitive landscape: A clear assessment of the competitive landscape and your differentiated position.

Business model: How you will reach customers, generate revenue and at what margin.

The team: Founders, advisers, key hires and, critically, any gaps and how you will fill them.

Financials: How much you need, what you will spend it on and what milestones it will deliver.

Lastly, investors will be waiting to see some predictions regarding your financial viability, so they can assess the return of investment that they can potentially have in the future. Most early-stage investors know that financial projections for a pre-revenue company are largely speculative. 

Build your projections from the bottom up: how many customers could you realistically acquire in year one? How many products can you develop and promote within that year? At what price? With what cost to serve? Deploy your competitor analysis to provide a guideline of what to expect. This is far more credible than top-down projections that apply a percentage to a global market figure.

A business plan is a sequence of data that portrays the story of your business in the current market. Markets shift, the economy changes and so will the evidence that you have used to build it, so a successful business plan is the one that doesn’t stop evolving. It doesn’t matter if you were right to anticipate the future. What matters is that you gave it enough thought to be able to adjust as circumstances change.