Professional Documents
Culture Documents
FEASIBILITY ANALYSIS
timely
Attractive
Opportunity
(rather than
just an idea)
Durable
Anchored in a
product,
service or
business that
creates or adds
value for its
buyer and end
user
opportunity.
Many entrepreneurial ventures fail not because
most
important
trends
to
follow
are
Economic forces
State of the
economy
Level of disposable
income
Consumer
spending patterns
Social forces
Social and cultural
trends
Demographic
changes
What people think is
Technological
in
advances
New technologies
Emerging
technologies
New uses of old
technologies
Political and
regulatory changes
New changes in
political arena
New laws and
regulations
Environmental
trends
suggesting business or product
opportunity gaps
Business,
product, or
service
opportunity
gap
Difference
between whats
available and
what's possible
New
business,
product
and
service
ideas
B) Solving a problem
The second approach- recognize problems and find ways
to solve them.
These problems can be recognized by observing the
sorensen-
cup
sleeves-java
jacket,
Arlene
market-
PopCap
games,
kathryn
Technical knowledge
No criticism
Freewheeling
Move quickly
Leapfrogging is encouraged
Focus group
A focus group is a gathering of 5 to 10 people
storming.
advisory
boards,
day-in-the-life
Preliminary research
While researching the biz opportunity, one should be
market,
association.
Technology
Recent change in technology
HR issues
Adequate safety measures
Also
be
able
clearly
state
and
describe
the
business addresses
Think about the value the customer stands to gain
Focus on the need rather than on the attributes of the
product/service
business,
such
as
operational
processes,
marketing
Feasibility analysis:
It is the process of determining if a business idea
is viable
The most effective business emerge from the
to
the
feedback
from
conducting
focus
industry
experts,
prospective
group,
and
obtaining
customers,
administrating
surveys
Secondary
research:
probes
that
already
Role of feasibility
analysis in developing
successful business
plan
Spending
Proposed
business
venture
Product/
service
feasibilit
y
Industry
/ market
feasibilit
y
Organiz
ational
feasibilit
y
Financia
l
feasibilit
y
Yes in
all areas
Proceed
with
business
plan
No in
one or
more
areas
Drop or
rethink
business
idea
Product/ Service
feasibility Analysis
1. Product/ Service desirability
2. Product/ Service demand
marketplace
1. Does it make sense? Is it reasonable? Is it
Concept test:
It involves showing a preliminary description of a
to
the
industry
experts
and
intended
target
market-
lists
the
be
positioned
relative
to
competitors.
brief
description
management team
of
the
companys
short
survey
should
be
attached
to
the
statement
The information collected from the survey should
or service
There
are
two
techniques
for
making
this
determination
1. Administering a buying intention survey
2. Conducting library, internet and gumshoe
research
One
statement
is
to
contact
trade
research:
investigator
that
is
detective
scrounges
or
around
an
for
analysis.
1. Industry attractiveness
2. Target market attractiveness
1. Industry attractiveness
.You should gain a sense of whether the industry
a new product
Generally
target within an industry is tougher- if the startup is pioneering the target market
Information from more than one industry and/or
1. Management prowess
Management prowess:
A
proposed
business
should
evaluate
the
Managers
with
extensive
professional
and
social
to colleagues
are compatible
Make
sure
you
and
your
partner
have
Resource sufficiency:
Is to determine whether the proposed venture
has
or
is
capable
of
obtaining
sufficient
objective
is
to
identify
non
financial
best
early
on
preparing
detailed
financial
forecasts
The most important issues to consider at this
stage
1.Total start-up cash needed,
lists
the
anticipated
capital
purchases
and
proposed
start-ups
potential
offers
detailed
financial
reports
on
comparable firms
projected sales and rate of return(profitability)the projected sales and rate of return is a
judgment call.
Estimation
projected
can
be
financial
computed
statements-
by
preparing
cash
flow,
Factors
to
assess
whether
the
venture
is
financial feasible
The amount of capital invested
The risks assumed in launching the business
The existing alternatives for the money being
invested
The existing alternatives for the entrepreneurs'
End of module 2