objective 2.13. students will employ entrepreneurial discovery strategies (feasibility study) to...
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Objective 2.13
• Students will employ entrepreneurial discovery strategies (Feasibility Study) to generate feasible ideas for business ventures/products.
ESSENTIAL QUESTIONS1.What is a feasibility study?2.What are the benefits of conducting the study?3.What possible causes of action could be taken
following a feasibility study?
• Provides an overview of the primary issues related to a business/venture idea. It determines if the business venture is feasible or “doable”.
• Determines whether the business/venture idea makes sense.
• Are there any make or break issues that would prevent your business from being successful in the marketplace?
• Identifies roadblocks facing your business/venture BEFORE you make an investment.
• To answer the question: Should I proceed with this project?
• Provides a lot of information necessary for the business/venture plan.• Good market analysis is a necessary in order to
determine the business/venture feasibility.• Identifies reasons NOT to proceed• Provides documentation that the business was
thoroughly investigated (will help with getting financing, as well as help to attract equity investment)
• Identifies new opportunities through the investigative process.
• Already know it is feasible (another business is already doing it and is successful).
• Why do one when one was done a few years ago?• Just a way for consultants to make money.• Market analysis has already been done by the
business that sold us the equipment.• A feasibility study is a waste of time.
These may sound like good answers but remember... you may need to live with these
decisions for a long time.
• Market Considerations...• Technical Considerations...• Financial Considerations...• Organizational/Managerial Considerations...• Competitive Considerations...
• Current or projected demand for your proposed product or service(s)?
• What are the target markets for your product or service?
• What competition exists in this market?• Is the location of your proposed business
location likely to affect the success of your business?
• What is the projected supply in your area of the products or services needed for your project?
• Technology may or may not be of critical importance or it may not. Compare a daycare center to a manufacturing enterprise.
• If Technology is a consideration:• What are the needs for the business/venture?• What other equipment does your business need?
Where will you get it? When will you get it? What does it cost?
• Start-up Costs• Operating Costs• Revenue Projections• Sources of Financing• Profitability Analysis
• What organizational Structure is the right one for your business/venture?
• Who will serve on the Board of Directors and what are their qualifications?
• What qualifications are needed to manage this business?
• Who will manage the business?• What are the staffing needs?
• What competition exists in this market?• Can you establish a market niche which will
enable you to compete effectively with others providing this product or service?
• How much is your competition charging for similar product?
• In order for a feasibility to be useful it must be COMPLETE and include (at a minimum) the following elements:1. Project Scope
• Defines the business problem and/or opportunity to be addressed. 2. Current Analysis
• Define and understand the current method of implementation, such as a system, a product, etc.
3. Requirements• Financial, Human Resources, Material, Equipment• Depends on the project
4. Approach• Recommended solution or course of action to satisfy the
requirements.5. Evaluation
• Examines the cost effectiveness of the Approach selected.6. Review
• All of the preceding elements are then assembled into a Feasibility Study and a formal review is conducted with all parties involved.
Source: http://it.toolbox.com/blogs/irm-blog/the-elements-of-a-good-feasibility-study-23199
Strategic plan used to evaluate your business
• Strengths – characteristics of business that gives it an advantage on other businesses of the like.
• Weaknesses - disadvantages• Opportunities – chances to improve
product/service within the market• Threats – elements that could cause trouble
(competitors)
Strengths Weaknesses
Opportunities Threats
Unique ideaCost
Manpower
Expansion
LiabilityNeed
Car ride